Eric Pachman

Bellbrook man’s data crunching driving big pharmacy change

A Bellbrook resident’s pharmacy data blog and consulting business is shaking up state policy — and not just in Ohio.

Eric Pachman and his partner Antonio Ciaccia, principle of 3 Axis Advisors, have been crunching pharmaceutical data and working to it make it easy to understand how the middlemen who manage pharmacy benefits are making money and spending money.

MORE: CareSource is overhauling how it manages pharmacy benefits

Their unique pharmacy research published by their non-profit 46 Brooklyn shows the often hidden ways the pharmaceutical supply chain works. A recent 46 Brooklyn post that dug into specialty drug data got 10,000 views and was followed by Ohio Medicaid working on changes to how private Medicaid plans manage specialty drug benefits.

From 2016 when they started doing research together to now, Pachman said there’s been a growing interest in the pharmacy supply chain and how pharmacy middlemen manage money.

“It’s night and day,” Pachman said. “I firmly believe we could have been doing this five years ago and no one would care. There was this confluence of factors that came together.”

One change was President Donald Trump’s administration making pharmacy benefit managers and rebates a campaign issue. There’s been a Congressional inquiry into how the companies do business and multiple states have pending legislation seeking to reshape how pharmacy benefits are managed.

Pharmacy benefit managers, which manage pharmacy benefits for public and commercial insurance companies, say they save insurers money and negotiate discounts on expensive drugs.

Pachman, through 46 Brooklyn, has been bringing big data to the discussion, but taking obscure, large files of pharmacy spending data and breaking down how the money flows through the supply chain, using charts, memes and metaphors to explain complicated concepts like “spread pricing” and drug rebates.

“Our office is familiar with their work,” said Dave O’Neil, spokesman for the Office of Ohio Attorney General Dave Yost, about Pachman and Ciaccia. “They are among the experts we’ve consulted on the PBM issue.”

The state of Ohio is making sweeping changes to how its pharmacy benefits are managed — as well as suing one of the pharmacy benefit managers, OptumRx.

When Pachman took a job as president of REM, a Dayton-based chain of pharmacies, he didn’t know pharmacies but he did know big data.

MORE: Ohio AG recommends pharmacy benefit overhaul

Pachman also had worked in the oil and gas industry, on Wall Street and for a railroad, where he worked in data analytics for the different industries, before taking a job as a president of the pharmacy chain.

Using his background in data analytics, Pachman started in his new role by looking into their business data and saw a staggering drop in their margins the month that he got there and that almost all of that drop was fueled by CVS Caremark, which managed benefits for private Ohio Medicaid plans.

“That was the start of this whole thing, digging into that and trying to understand the logic behind what was going on,” Pachman said.

After learning more about how the system worked, policy advocacy seemed like the best way to change the system, which is how he got connected with Ciaccia, who is also a lobbyist with Ohio Pharmacists Association.

National media outlets covering pharmacy issues have tapped Pachman and Ciaccia for expertise and several government agencies and trade groups, particularly pharmacist trade groups, have sought help from their consulting arm.

“He’s really great with numbers and stitching data together,” said Scott McGohan, CEO of Dayton-based benefits firm McGohan Brabender.

The employers McGohan Brabender works with spend about 20 percent of health benefits on pharmacy, so growth in pharmacy costs is a major area of concern for those clients, McGohan said.

The issue of who is responsible for high prescription drug costs is a messy political topic with different layers of the supply chain pointing fingers at each other. The pharmaceutical manufacturers have been using pharmacy benefit manager data to point the finger at the middlemen, even taking out social media ads saying Ohio patients could save up to $1,900 a year “if middlemen shared the savings with them directly.”

“I hate that,” said Pachman.

Pachman said their goal with 46 Brooklyn isn’t to push for a specific policy, but instead it is to make sure there is enough data available to have the right conversations.

MORE: Local pharmacy benefit manager growing with Kettering Health contract

Medicaid drug spending is the focus of their research because Medicaid drug spending data is more accessible than Medicare or commercial insurance, said Pachman. But they want to dig into the billions spent on Medicare and employer-sponsored prescription benefits as well.

“We’ve seen this is a commercial insurance problem. This is a Medicare part D problem. But it’s all hidden,” Pachman said.

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