The Role of Brokers in Healthcare Savings & Drug Pricing with Bill Hepscher

In this episode of the Insurtech Building Blocs podcast, host Cory Schmidt welcomes Bill Hepscher, founder of the Canadian Medstore. They discuss Bill's unique journey into the healthcare industry, the challenges of navigating prescription drug costs, and the logistics of importing medications from countries like Canada.

Insurtech Building Blocs is presented by AgencyBloc, the #1 Recommended Insurance Industry Growth Platform serving the benefits and senior market space with 6,500+ customers across multiple solutions within the platform. With a range of insurance-specific solutions for sales enablement, client and policy management, compliance management, quoting and proposals, and commissions management — all with highly recommended customer support — we've got you covered.

Learn more at https://www.agencybloc.com

LinkedIn: https://www.linkedin.com/company/agencybloc
YouTube: https://www.youtube.com/c/agencybloc
Facebook: https://www.facebook.com/agencybloc
Instagram: https://www.instagram.com/agencyblocams
X: https://twitter.com/agencybloc

Chapters

• 0:00 Introduction to the Podcast & Guest
• 4:12 Bill's Journey to Founding Canadian Medstore
• 10:09 Navigating Prescription Drug Costs & Logistics
• 16:12 Understanding Drug Pricing in the U.S. vs. Other Countries
• 22:05 Engaging with Brokers & Employer Groups
• 23:00 Understanding Prescription Drug Costs
• 27:00 Navigating Medicare & Individual Markets
• 32:10 Educating Agents & Brokers
• 39:01 The Impact of Tariffs on Prescription Drugs

Transcript

Cory Schmidt (00:02.168)
Hello everyone. Welcome to another episode of the Insurtech Building Blocs podcast. Glad you're here. My name is Cory Schmidt and I'm your host for the day. Really excited to have the guest on that we have today. Actually was able to spend time with Bill very recently at our user conference, the BlocBuilder Conference in Scottsdale, Arizona. And really got a chance to spend time with him and understand kind of his

his background and what he brings to the table and some really things that are interesting from an industry perspective that I think our viewers are going to be interested in learning about. So welcome to the podcast, Bill. Glad you're here.

Bill Hepscher (00:46.363)
Thanks for having me, Cory. Great seeing you again virtually this time, but it was great meeting you in person in Scottsdale, and now it's great to see you again a couple of weeks later.

Cory Schmidt (00:55.286)
Yeah, same. Have you been home in the time between, between Arizona and now?

Bill Hepscher (01:00.463)
You know what, I think I've been home for three days since then. And as you know, I was on the road for about three weeks prior to that. and I'm heading out, heading out again on Monday, going to the, benefit pro event out in Boston. And then from there, I'm flying to Winnipeg to meet with one of our pharmacy partners and then to British Columbia. And then I'll, I'll be back home again. So, I told you last time I was a little concerned that the dog was going to bite me when I walked in the door. She didn't bite me, but she definitely was sniffing around wondering who the.

Cory Schmidt (01:21.367)
man.

Bill Hepscher (01:29.979)
who the strange old guy walking around the house was for a few days.

Cory Schmidt (01:34.24)
Yeah, it does seem like all of the events and travel like are particularly compressed in this time of the year, you know, in the late spring timeframe. I've been traveling a lot as well, but it's interesting that you mentioned benefit pro that was, think it was probably the very first conference that Adam, my co-founder and I actually exhibited at. And the team has lots of jokes about, you know, what we look like and how unprofessional our booth setup was.

But man, we still have a lot of really awesome customers from that event. And this is probably going on probably a decade ago, but it seems like a lot of really strong employer benefits brokers attend that conference based on my experience.

Bill Hepscher (02:19.237)
I think it's a great event. can tell you, Casey and I, my business partner talk about our evolution all the time too, when we set our first booth up, trying to go after the employer market and tell our story in that spot. And, know, looking back to that a decade ago and that where we are now and kind of the evolution, you you talk about the booth and you just think, man, what were we thinking? And I think the story was a little bit, you know, same story, but kind of presented differently. And for me, what I've noticed is,

Events like your BlocBuilder event, like Benefit Pro, the consultants are coming in and they're really people that are thinking differently now. You know what mean? It's not just that typical, hey, we just do it this way, this is way we've always done it, don't shake up the Apple cart. People are really having those conversations. The vendors that you see now are just, there's so much innovation happening in the industry. And unfortunately in the benefits world and insurance in general,

We're always kind of behind the curve, I think, but it seems like there's some really innovative folks. And I can tell you that I'm noticing, again, as a gray hair in the room, I'm seeing more and more young faces, which is exciting to me because I know these people have ideas that I didn't even think about. I know I was an innovator a decade ago and 20 years ago, but now I think we're still innovators, but I see some these young people thinking about things that we just, doesn't even cross my mind. And I'm excited.

Cory Schmidt (03:43.734)
Yeah, that's great. I love, yeah, to your point, I love the new perspectives coming into the market and you know, some of the questions, you know, I think it's a good opportunity for people to question assumptions that we've had along the way, like the way we've always done business, the way we've always thought things should work or needed to work and I love when there's new perspectives in that realm. So I think that's a great segue to talk a little bit about your story, Bill, as founder of Canadian Medstore, like how do you become to

run and manage a company that imports prescription drugs from foreign countries. That's pretty fascinating.

Bill Hepscher (04:20.591)
Yeah, you my story is, and I've told this before, I think you and I talked about this when we were in Scottsdale. I didn't come from an insurance background. I didn't come from a pharmacy background. I actually was drawn to looking for lower cost prescription medications because my brother was diagnosed with non-Hodgkin's lymphoma when he was 27 years old, went through a bone marrow transplant. And I can tell you even 25 years ago, his anti-rejection medication that he needed was costing

know, thousands of dollars here in the U.S. And we were hearing stories at the time about families, you know, that were driving over to Canada, little old ladies that lived in Detroit that were going to Windsor to buy their, you know, their cholesterol medication or something like that. So we looked into sourcing my brother's medications and we found that the same medication, same active ingredient, often manufactured by the exact same company.

was being sold in Canada for a few hundred bucks. We're here, we are spending tens of thousands of dollars on the same thing. So I came back to Tampa, told a physician friend of mine that story and he said, you know, Bill, I write prescriptions every single day and my senior patients are not taking their medications because they can't afford them or they're cutting their pills in half or using their inhaler every third day. So I said, well, heck, if you can do it in Detroit, Michigan, we know.

You can't just jump in your car if you live in Tampa, Florida. How do we open that up to these folks? So we created relationships with pharmacies in Canada and we allowed for those pharmacies to be mailed directly to our clients here in Tampa. We expanded from that and now we have clients in all 50 states helping them get medications from licensed pharmacies in Canada, Australia, New Zealand for a lot less expensive.

Cory Schmidt (06:02.518)
Yeah, interesting. And you were explaining that you actually have a team of pharmacists that helps navigate that process. that, cause that seems like, you know, impossible. Like my, my doc gives me a prescription. Like I feel like I need to drive to the pharmacy down the street. Like how does this work practically? Like I've got a prescription in my hand. I know it's going to be really expensive. I need to save some money. Like how would that work logistically with, with Canadian Methadone?

Bill Hepscher (06:28.441)
Yeah, so interestingly, our number one referral source is actually primary care physicians because they want their patients to be compliant on their medication. They know that when they write that prescription, that piece of paper or that e-scribe that they send doesn't do anybody any good unless they can take the medication. So our number one referral source is actually physicians. Our number two referral source is a very, very close second is...

is health insurance agents, agents who are working with these people, looking at that every single day. So in general, somebody comes across that expensive medication, something that they can't afford. They go back to a doctor and say, hey, I can't afford this. Or they talk to their health insurance agent and say, hey, this isn't covered by the plan or it's covered, but I haven't hit my deductible yet. They're referred over to us. And what we do is we look through our database, through our database of pharmacies, whether they be Canada, which is how we started, or it could be a pharmacy in the UK or in...

in Australia and New Zealand. We then provide them with a price quote, hey, this drug costs $1,000 here in the United States, but it's only $200 in the UK. At that point, we take that prescription from a US doctor. We send it over to our pharmacy partner. Our pharmacy partner, obviously they're a licensed pharmacy. They have their pharmacists on staff review the prescription, package up the medication, and then mail it directly to the individual here in the United States.

So the easiest way to think about it is if you lived in Detroit, Michigan, you could drive 10 minutes away to a pharmacy in Windsor, walk in, provide your prescription, walk out with your medication. We're doing the same thing except we're utilizing mail order and having those medications mailed from that pharmacy, whether it be in Winnipeg, Canada or London, England, directly to the individual here in the United States.

Cory Schmidt (08:09.89)
Wow, really interesting. And I frankly didn't realize that you could still just drive across the border and buy a prescription, you know, with a farm, sorry, buy a drug with a prescription and bring it back over. what's the, I imagine there's a fair amount of logistics as it relates to like the safety and the, you know, some of the controls that are in place when you're importing drugs from a foreign country, like.

Is that just as simple as, know, they mail them directly? what's the, I think the countries you've partnered with have similar protections for patients, is that right?

Bill Hepscher (08:41.699)
Yeah, there's-

Bill Hepscher (08:46.029)
Yeah, mean, you know, again, I can only speak for my company's Canadian med store and RX manage. But yeah, all the pharmacies we work with are actually brick and mortar pharmacies. So if you were a Canadian citizen and you were going to go fill your your, you know, your eloquence prescription or fill an EpiPen for your kid, you'd walk into that pharmacy, fill that prescription and walk right out, just like we would walk into our neighborhood pharmacies. So the pharmacies we partner with are actually brick and mortar.

actual licensed pharmacies right there. Let's use Canada as the example. So yes, the industry actually started by individuals that lived in those northern states that recognized they could drive over to Canada by their prescriptions. 23 years ago when I started our company, that was kind of the evolution of the internet and people becoming more worldly, I think, and recognizing that we were a world economy now.

So we utilize the same provisions that are created through what's called the personal importation regulations, which allows for an individual to order up to a 90 day supply of medications for personal use. There are certain medications that can't be ordered internationally, things like controlled substances, so narcotics, certain type of human growth hormones, sleep aids, things like that. Anything that would be a controlled narcotic type of medication. Number one, we wouldn't touch that. That's not something that you really wanna do through mail order.

we focus on maintenance medications. So the medications that people use to treat their COPD or their high blood pressure or diabetes medications, things like that, a maintenance drug that someone's taking. The other thing that's important to know is that no one's coming to us to fill a generic medication. If you can get that generic drug for $2 or $4 or $10 at your local drug store, or if you can go onto GoodRx or...

Mark Cuban's Cost Plus or something like that for those generic drugs. Those are the drugs that people don't need to go to Canada for. The joke in our office is if you see it advertised on TV or if you open up a magazine and see it or if it pops up on your screen when you're searching the internet, those are the drugs that we know we're going to be able to help you save money for through Canada because those are the brand name drugs that don't have a generic equivalent here in the United States, which means that those drug companies can really charge whatever they want. And we're paying literally

Bill Hepscher (11:05.509)
two, three, four, five times what other countries are paying for those same medications. So those are the drugs that would want to be ordered from Canada. So a very small percentage of the overall prescriptions, people are going to benefit from getting it internationally, but they're the typical ones that are driving either an individual crazy because the costs are so high or even larger than that, these self-funded employer groups who are paying massive amounts of money. You probably know that, you know, four or 5 % of the employee population is often driving

80 or even 90 % of the overall healthcare costs because those are the high utilizers.

Cory Schmidt (11:40.556)
Yeah. And why are these prescriptions so much cheaper in those countries that you're sourcing them from?

Bill Hepscher (11:47.088)
People often ask me, why are the drugs so much less expensive in the United States? And I say, you know, the question is really why is it so much more expensive here in the U.S. than why is it so much, they ask why is it so much less expensive in Canada? Let's say I say, why is it so more expensive here in the U.S.? And the real reason is because, you know, the drug companies here can charge whatever they want until the Inflation Reduction Act, which created the ability for the federal government to negotiate drug prices. And as we all know, that's only impacting a very, very small amount of medications.

Cory Schmidt (11:59.702)
Yeah, sorry. Yeah, that's what I mean.

Bill Hepscher (12:16.857)
Most of those medications are already coming off patent anyway, so it's a little bit of a shell game in optical political play. But the truth is here in the United States, we don't have any way to actually regulate what pharmaceutical companies can charge for prescription medications, where in most other industrialized countries, they negotiate a price. They say, hey, listen, through our socialized medicine system, we're going to buy a whole heck of a lot of X drug. We want a better price than somebody who's walking in and buying just one medication and negotiate the price.

We don't do that here in the United States. As a matter of fact, the Medicare Modernization Act made it illegal for the federal government to negotiate drug prices. So that's the main reason why. The other reason is obviously now when the US dollar is so strong, we get the benefit of being able to utilize that US dollar strength of buying a medication from an international pharmacy. And I think the other thing that's the big one that a lot of people forget about is the drug companies here are so powerful that they can protect.

They can continue to extend patents over and over and over again. We've heard about that where they make, this is a whole nother three hour conversation, but all kinds of ways that they can play games with the patents, where often a drug will go generic overseas prior to it being generic here in the United States, which obviously that competition then drives the price of the medication down. So those are really the main reasons why going internationally helps people save a lot of money on their prescriptions.

Cory Schmidt (13:39.532)
Yeah, and if those drugs go generic overseas before they've gone generic here, can you get access to those drugs as well?

Bill Hepscher (13:46.64)
We often can, yeah. As a matter of fact, that's one of the ways that we can help people save even more money by accessing the generic drug. I will tell you though about half of our customers though say, you know what, I'd like to save a few more dollars by going generic, but if I can get the brand name drug that I'm used to getting here in the United States and I'm already going to be saving $500, you know what, I'm going to stick with that brand name. So we always give folks both options. If it is available as a generic, we can offer that to them. But I would tell you that probably at least half of our customers say, you know what, we're going to just stick with that brand name.

but we always give them that option, especially for people that are very, very cost sensitive. You have to remember some of these self-employed individuals that are really paying for their own prescriptions, a lot of seniors that are on prescription drug plans that maybe don't cover a certain drug or they have a high deductible, those are the folks that are gonna be very, very cost sensitive. So sometimes that generic drug, those few dollars more worth of savings can make a big difference to that individual.

Cory Schmidt (14:41.838)
Yeah, it's interesting how we have benefited from socialized medicine in other countries, you know, and the power of negotiation. Here, I always blamed it on, you know, all the TV commercials and ads in the magazines, which I'm sure also contributes to some of that as well. But I don't know this is really going to happen, but I've heard that, you know, maybe the...

The administration is going to try to push for outlawing certain kinds of commercials for prescription drugs, at least maybe on television. But maybe that will.

Bill Hepscher (15:12.667)
Yeah, there was a lot of talk. In the first Trump administration actually tried to do that and it was challenged by the pharmaceutical industry and they basically shut it down under, you know, freedom of speech laws and things like that. I tell you too that I actually, I agree, Cory, I mean, us and New Zealand are the only two countries that allow for direct to consumer advertising of prescription drugs. So it makes a big difference. I mean, if like me, you're a sports fan and you're watching a football game or a baseball game, you'll know that, you know, every other commercial is.

is a drug commercial, you know? I will tell you though that I think that's again, that's one of the ways that yes, would we impact the cost a little bit? I think doctors are super frustrated with that because people walk in and say, hey, I saw this commercial and this is what I need. But whether or not that's really the reason that we're spending so much more than the rest of the world on the prescriptions, I don't think so. I think it's the simple fact that the drug companies in their defense, they need to recuperate the research and development costs of what it costs to take a drug to market. You've probably heard that

You know, the estimate is it's about a billion dollars to take a drug from concept to market, a billion with a B. So the drug companies need to recoup those dollars, understandably. And as a business person, I certainly don't want to see any type of, you know, controls, meaning that somebody's dictating to you what you can charge and what you can't charge. The argument that we've always made is that when do we stop making the Americans be the only ones that are paying that high cost? When do we start shifting those costs?

to the Canucks and to the Aussies and to the Kiwis and to the Brits. These other first world countries that are basically riding on the coattails of the US. And let's face it, the drug companies are making money when they're selling the drugs to the Brits or they wouldn't be doing it. They're just not making as much money as they're making on through us because they know that they can charge that much here. I think the other thing to remember and we get, really get into the weeds, but.

Our system here is based on an employer-sponsored health system. So that means that the average person is getting their coverage through their employer or they're on Medicaid or VA coverage. So because of that, the average American never really sees the true cost of the prescriptions. They go in and they pay their co-payment. So you and I as taxpayers, paying for Medicare, either paying for that, or the employer who's paying for the cost of the prescriptions are paying that.

Cory Schmidt (17:23.608)
Mm-hmm.

Bill Hepscher (17:35.132)
the average individual doesn't really see that that medication they just filled is costing, know, that Eloquist is costing $650 every time it's filled, because all they know is they're paying a $50 copayment. And they're upset about the $50 copayment because a year ago it was 35, if you know what I mean, but not recognizing what the true cost of care is. And that's the big difference. Here in the United States, the average consumer, consumer of healthcare doesn't really know what the real cost of care is, because their insurance is paying for it, and they're paying the,

know, the copayment to pick up that medication.

Cory Schmidt (18:07.926)
Right. Yeah. I know. I think our, we're with United healthcare, I think as a company, and I know that they've really, tried to provide tools online to get insights into the true cost of care of certain like procedures and things like that, which is it's nice to see the transparency, but like there's very little motivation really to, to, to leverage that or utilize that as an employee of a company, just because to your point, Bill, like I'm just going to pay the copay. I'm going to pay the, you know, I got to my deductible, whatever the case may be on a high deductible. then.

It doesn't really matter what it costs, right? I'm either paying zero or I'm meeting my deductible.

Bill Hepscher (18:43.373)
And Cory, remember when the average American goes to seek care? You know, they go to seek care because something bad has happened or the baby got an earache, you know what mean? And at that time, you're not looking when the baby's got an earache and you need to get ear drops, you're not going, you know what, let me log on and see where I can fill the medication for a little less expensive and save my employer a couple bucks. That's not the mindset. Or your spouse has been sick and they want you to go to get all these tests. We're not typically going, you know what, let me look and see if those tests are really...

worthwhile, you know, if we know that we can hit the share of cost or hit our deductible and then it's all covered 100 % after that, there's really not a motivation to do that. So the system is different here in the US than it is in the rest of the world. And Cory, I'm to be the first to tell you, with all the speaking I do, I'm not an anti-pharma guy. I know that my brother wouldn't have been able to fight the fight that he fought, you know, even 20 years ago, if it hadn't been for the advancements in pharmacology.

I think even if you just look at COVID and of course we can debate whether or not that was handled correctly. But the fact is when we put the American pharmaceutical industry at work and you have really good people working in that world, really smart people, a whole heck of a lot smarter than me, we can do amazing things. It's not pharma's fault. The system is just set up that it is the way it is. You know what I mean? And I'm certainly not arguing for a socialized medicine system. I can tell you that

I told you that we work with pharmacists and physicians from throughout the world. And every one of them to a person would tell me that if they got sick or if a family member of theirs got sick, they would want to be here in the United States to get treatment. Because us as Americans have access to treatments that don't exist in other countries. We have access to pharmacology that don't exist simply because some of the other countries say it's not financially viable for us to pay for that product.

We're going give you an older product that maybe isn't as good, but it's more affordable. Here in the United States, we get the best care. We have access to the best care in the world. The issue is how do we pay for that care? And so I want to be very, very cautious not to make anybody think that I'm arguing for a socialized system. All I'm arguing for is that the drugs are less expensive in Canada. If an individual has access to those drugs, that's true free market. We're saying, listen, if we can get access to those prescriptions in Canada,

Cory Schmidt (21:00.142)
Mm-hmm.

Bill Hepscher (21:03.163)
Let that individual have that opportunity to do that. If you choose to your prescription locally and you want to pay more for it, no one's telling you you have to fill your medication in Canada, but understand that it is an option for you and that for decades, Americans that live on those northern border states have literally been driving over to Canada to fill their prescriptions and doing it on a regular basis. So much so that the FDA and Border and Customs has created those guidance that we talked about, 90-day supplies, non-controlled substances, care of a US doctor.

those regulations and those guidance are in place so that people can do that and do it compliance.

Cory Schmidt (21:37.868)
Yeah, you're really just rebalancing who's subsidizing the cost of those drugs in terms of getting them from some of the countries that have lower rates, which I think is a really neat idea. Bill, you mentioned a little bit about employer groups. And I saw that one of the recent Kaiser Family Foundations surveys said that the number one concern for employers is drug costs, specifically specialty drugs.

I'm curious, like it sounds like that's exactly down the middle of the fairway for what Canadian Medstore does in terms of helping with some of those really expensive drugs, those specialty drugs that don't have generic alternatives. You work with brokers. What does that look like to engage with a broker and an employer group? And how does that kind of play out in terms of helping those employees maybe curb those costs from importing drugs from other countries?

Bill Hepscher (22:32.027)
Yeah, I think it's interesting that you mentioned the Kaiser survey. We've seen a bunch of those from other employer groups too. The number one concern typically for employers is healthcare and then specifically prescriptions and then specifically on top of that specialty medications. So typically the way that we engage with brokers, we don't go direct to employers. We only work through the broker and agent channel. As a matter of fact, a few times that we have had communications with a

an employer directly, I always say, listen, let's get your broker involved. They're the ones that are really handling, you you're building widgets or running a school district or, you know, selling cars. Your healthcare guy, your agent, your consultant is the one who handles that. And that's who we want to be at the table with because the agents are looking at it holistically. How do we make this plan better, more affordable and give folks access to that care? But typically what we do is we say, hey, let's look at your claims data. Let's see where you're filling those prescriptions.

And you're right, Cory, it's typically one of the big expensive medications, specialty drugs that made somebody's eyes pop out and said, hey, we need to do something about this. It's funny, I talk about a lot that when I started this business 20 years ago, those drugs that cost a few hundred dollars a month were like, man, that's really expensive. How do we help people with that? Now it's almost like consultants and employers, unless it's a thousand dollars a month, it doesn't even phase them anymore. You know what I mean?

Cory Schmidt (23:54.786)
Mm-hmm.

Bill Hepscher (23:55.356)
But they typically come to us and like I said, we scrub that data. say, listen, on these, know, 95 % of these drugs are generic. You guys are doing a great job. You're filling that where it should be filled. You're lowering your costs. But here's the 5 % or 10 % that's driving 80 % of your costs. And those are going to be those specialty medications that are running 10 or 20 or $30,000 of fill. And what we typically do is look and say, well, can we source those medications from a pharmacy in Canada? If we can.

We go back to that employer and we say, hey, you this is the cost savings that we can have. Now remember, we're not changing the medication. We're not changing the PBM. That PBM is still in place for 95 % of those fills. But on these particular drugs that we found, we can save you a bunch of money. The other interesting thing is sometimes they come to us because that $30,000 drug is what's really made them nervous.

But when we look at that, we recognize, you know what, there's a bunch of people that are taking Eloquist and Genuvia and Genumint that aren't 30,000, but they're $600 a month. And when you multiply that by your 30 employees that are taking that and filling it over a 12 month supply, you know what, just on those, on those, we call smaller ones now, which are the $600, $800 a month drugs, we can save you even more money. So by looking at that data, we can typically help that employer, you know, save a bunch of money.

And we've looked at groups, Cory, where we have just five or 10 employees that we're able to shift over to international, but we can impact sometimes 60 or 70 % of the overall spend because those are the ones that are really driving the prescription drug costs. It's not the $4 or $10 generic drugs that's getting any individual or any group in trouble. It's those specialty, really expensive medications.

Cory Schmidt (25:35.662)
Interesting. And so I imagine the next step in the process though is the broker would need to work with the individual employees to have that conversation about being willing to kind of switch over to the mail order process instead of going to their local pharmacy.

Bill Hepscher (25:49.828)
Yeah, we have to communicate that with the individual. Remember, we're always gonna wanna make sure the employee knows too, like, you know, the reason this drug is gonna be less expensive is because we are gonna source it through, you know, through an international. So the employee always has to have access to that. They always have to know that they still have the option to fill it, you know, domestically if they choose to.

But yeah, the brokers involved with that, the HR folks are really, really good with communicating with people. And we're seeing more and more PBMs coming to us and saying, hey, we want to introduce international as part of our offering. probably just a few years ago, PBMs looked at us as almost a competitor who's going to eat into the revenue stream. Once these PBMs, especially the more innovative PBMs, the true pass-through style PBM,

You know the innovators that you and I are seeing at a lot of these events They're recognizing that we're really only impacting a very small percentage of the overall fill So we're really not impacting their revenue very very badly, but they can show a massive savings to their employers So what they're saying is hey listen We're using you not only as a way to win new business, but also to retain our clients And I think brokers see it the same way Hey listen

we can go utilize this as a way to win new clients over, but also some of our clients that we've been working with for years and really struggling getting that RX spend down. Hey, this is a way that we can immediately see an ROI because we know those individuals we need to target from the claims that we have access to.

Cory Schmidt (27:18.476)
Right, right. Okay. So that's kind of the employer group model. I'm switching gears a little bit to kind of the individual market and specifically Medicare. know you and I were chatting, Bill, just before we maybe went on stage for the State of the Industry panel. And I was telling you about my grandmother. When I got to Arizona, she's a snowbird. So I went to see her and she pulled out her tray of prescriptions, you know, all the bottles in this kind of like plastic tray and

and so I, you know, I was intrigued. I'm like, you know, what is the, what is the cost of, of all of these, you know, bottles? And, she made the comment that like most of it's like really inexpensive to your comment, you know, a few, a few dollars here and there, but then she pointed at the one bottle and she's like, this one is really, really expensive. and, and I told you it was Eloquist and you're like, I knew it. You said, I think you, said to me, like any Medicare agent that's been in this business for like two days knows what Eloquist is, right?

Bill Hepscher (28:15.515)
That's heard of Eloquist. Yeah, you know, that's exactly, think the way I remember the conversation is I always say that if you've been in the business, if you've been in the Medicare business for more than two days, you've heard of Eloquist. And if you've been in the business for more than two weeks, you've actually had that experience of walking into a senior's home and then, you know, bringing out their tray or bag or, you know, list or whatever it happens to be and hey, here's the medications I'm taking. So welcome to the world of Medicare.

But yeah, that's exactly it. What we just talked about on the employer side is actually what we've evolved into. Our original business model and the model that still exists on the individual side is exactly that. Working with seniors who can't afford their prescription medication. You gotta remember when we started our company, there was no such thing as Medicare Part D, so we've evolved into helping people that have that Part D plan.

But under the IRA, we know that there's massive changes, some very, very good changes for individuals, but some people like your grandmother, who maybe is taking a bunch of generics, but only that one expensive drug like Eloquist, she's gonna have to hit that deductible, she's gonna have to pay a higher premium, she's gonna probably have to pay higher copayments on that drug, and that $2,000 maximum out of pocket might not benefit somebody like her.

where she can source that Eloquist from international pharmacy for $50 a month. you know, for $600 a year, the same as what her deductible would be, she can get that medication from one of our international pharmacies. So an agent or a broker who's working with us might recognize, you know what, we don't have to put, you know, Mrs. Jones into this really expensive premium plan. We can keep her on the less expensive plan that she can fill all of her generics through. And we can fill the Eloquist.

generic or brand, whatever it happens to be, through the international pharmacy for less than what our deductible is going to be anyway. So there's ways to do that. I think the biggest thing for agents and brokers to recognize is, especially after the changes with the IRA, is to know that we're not a replacement for Part D. It's not something that somebody should rely on for everything. What we are is that extra arrow in the quiver, that when you have that...

Cory Schmidt (30:08.782)
Mm-hmm.

Bill Hepscher (30:25.787)
person like your grandmother, hey, maybe this is a way to keep you on a lower cost plan and still get the coverage you need. Every agent, if you've been in the business for six months, has gotten that call that said, hey, you picked the right plan for me when I first signed up, when I was taking three generic drugs, but I just had this issue happen and now the doctor put me on Eloquist or Genuvia or Genument or Advair or Brio. I just went in to fill it. Now I've got to my deductible before it's covered. Maybe the drug isn't even going to be covered.

That's where we can step in and help that person until the enrollment period comes around again. That's the main thing for folks to think about. Last thing I want to touch on that about the Eloquist is there's an example of Eloquist has not gone generic here in the United States. It won't be generic until the end of next year, but the patent has expired in the UK and Canada. So in that situation,

We could offer your grandmother the brand name or for a little bit less expensive, she could fill the international generic as well. And that would be a, that's a perfect example of where somebody has both options, which is gonna be most, what's gonna make you feel most comfortable and what's gonna be really within your budget. You know what I mean? So that's a perfect example of a drug that can be available internationally, generically, even though it hasn't been, even though the patent hasn't expired here in the US yet.

Cory Schmidt (31:37.335)
Right.

Cory Schmidt (31:45.966)
All right. Well, I'm going to have to have her talk to her agent or her broker. So, I'm curious, you know, on that front, how can you scalably educate and inform, you know, the agent and broker market and support them Bill? Like, I mean, there's thousands of agents out there trying to navigate this. need help from a company like yours to navigate these more complex prescription drug costs.

What is that? mean, you're on the road a lot. Is it going to conferences? Is that how you're getting them educated on this?

Bill Hepscher (32:14.939)
Well, I thought I was going to be retired. I thought after this podcast, I was going to be everywhere. I thought we were going to, know, with, with all your reach, I thought we were hitting every single Medicare agent out there. So, you the story has been told, right?

Cory Schmidt (32:23.126)
I think we are for sure, yes. But maybe for the three out there who don't watch this, how would they learn about Canadian med store?

Bill Hepscher (32:32.111)
Well, number one, let me tell you that we love working with you guys because we know that you're so respected and the agents that work with you are just so devoted to the product that you guys are building, especially with the innovations that you're putting in now and some of the growth there. again, we're speaking at events all over the place. going to, we're participating obviously at your BlocBuilder event and at a bunch of different events.

The NABIB chapters have been reaching out to us a lot because the number one conversation, going back to your Kaiser comment, whether you work in the individual world or you work in that group world, RX is something that people want knowledge for and really are looking for true ROI. How can we really help people save money? They can do that. And agents can go right to our website, CanadianMedStore.com. They can sign up on our agent concierge.

link and what that'll do interesting that we do differently than some competitors that are out there is number one agents know that they're talking to real people located here in Tampa, Florida and what we do is we assign every agent whether they're in the group world or in the individual Medicare world with one of our agent concierge and what that concierge does is they become the agents rep they become their their person so when an agent is referring a client they're handing them off to a real

They're not just saying here's a website or here's a phone number somewhere. They're gonna be able to say hey listen Amber over at the Canadian med store is my person I want you to talk to Cory is the person Pam is the person they're gonna hand them off to that person and then our our team is gonna hand hold that client through the process make sure they know what the cost is make sure where it's come they know where it's coming from helping them get their prescriptions helping them track their packages and helping them refill their medications ultimately after their 90-day supply is is running low so

We do that because what we found is that the agents, especially the guys that I met at your events, they've worked so hard to build their book of business that the last thing they want to do is work with a group who's going to not service their clients properly or sending them to just go Google it type thing. This gives them an opportunity to talk to real people and to a person agents have told us that's the best thing that they can do because that's the way they built their business through relationships and through referrals and that's how we're looking.

Bill Hepscher (34:55.483)
So folks can go to the Canadian medstore.com or I'd love to be able to share a link with you that you can put out as part of the pod or at bottom of the podcast so people can click right on that sign up and be introduced to one of our concierge

Cory Schmidt (35:08.75)
Yeah, absolutely. It's interesting that you mentioned the, I love how you referenced, you know, the customer base that we have at AgencyBloc. I've always felt like they're some of the most sophisticated, high-performing agents in the market. And it's really cool to see, you know, folks like you, Bill, come to our event and like recognize the same thing. Like these are people that really care about how they're running their business. They want to run it really effectively and efficiently so that they can spend more time with their customers.

And I also had the realization, maybe a quick plug for one of our more recent innovations. launched, well, officially earlier this year, RxCollect, which effectively allows our customers to collect the prescription drugs from their beneficiaries in advance of AEP or in advance of a meeting. And I was just thinking, I'm like, well, when they select Eloquist, we should tell them, just FYI, you may be able to get...

this drug from Canada or other sources for less expensive than buying it at US-based pharmacies. But I think there's some interesting things we could explore there in terms of just helping them understand.

Bill Hepscher (36:15.323)
Yeah, we need to talk about that. I'm not a tech guy, so I was like, yeah, let's just do that. And then you guys tell me, oh, it's not as easy as that. But the truth is, I would tell you probably in the Medicare world, I could probably identify probably 25 drugs that are probably 85 % of the drugs that are filled for our folks are on Medicare. So quite honestly, if there's a way for us to flag those and let them know that, agents that we work with typically say, you know what, once I see Eloquist, once I see Genuvia, I know that I want to run the...

plan two different ways. I want to run it with the drug in there and I want to run it without and see what the differences are. So there's definitely ways to do that. And yeah, I want to comment on your customer base. I've been to your event, you know, I think three or four times now and the folks that we know that work with AgencyBloc, right. It's a sophisticated agent. But when I say sophisticated, I mean sophisticated that they want to run their business sophisticatedly, but they want to have access to their

to their customers, to their clients. They wanna still be able to, the reason why they're automating is really not because they wanna make their job so much easier, meaning lazy. They wanna do it so they can actually spend more time with their clients. And that's what I see is that most of them are building their agencies because they provide that service, because they do answer their phone, because they do respond to emails. And what they're looking to do is free up more time so they can do that, do a better job with that. So I gotta tell you, I've always said that the...

the people that we meet at your events are doing that. The other thing I think that's important to know is that these are folks that are willing to take time out of their busy, schedules and attend an event where they can hear about innovative strategies and talk about what can we do. That's a different type of agent, because a lot of agents want to just do the easiest thing they can do and why do I want to add any extra on there? Just like comparing a drug through Canada, an agent doesn't have to do that. They can just say, hey, here's the plan I'm going to put you on.

But I can promise you that if you take the time to do that for your client, the agent that walked in before you and the agent that's walking in after you're trying to steal your business from you, they're not doing that. They're not spending that extra time. That client's not leaving you once you're the one who figured out how to lower their prescription drug costs. And I can also promise you that the agents that we work closely with tell us all the time that a lot of their referrals come because they help their...

Bill Hepscher (38:36.955)
client have saved money on Eloquist. Well, guess what? If they're taking Eloquist, we know how many folks are taking that medication. Somebody else in that social circle that that person talks to is also taking Eloquist. So they're reaching out to that agent. It's a great way to build not only your trust, but literally your client base. It's a referral source because RX is such a concern for everybody.

The guy who walked in before you and the guy walking in after you are selling the same part D plans. What separates you from that other agent is the fact that you can service them better and that you actually care enough that you're gonna go through some other options with them and say, hey, here's something else you might wanna consider.

Cory Schmidt (39:16.527)
Yeah, our mantra has always been to connect the dots and that just doesn't mean just technology. It's like connecting the dots on ideas, best practices, how to effectively run an agency. I think it was, you know, we've gotten some validation. think already a third of the people who attended BlocBuilder this year have signed up for next year, which is crazy. I mean, we're just a few weeks out from, you know, concluding it. So it's just really awesome to see the support and I'm super excited for next year.

Maybe one last topic as we wrap up, Bill. I'm very curious about the topic that maybe you can't avoid when you turn on the news, which is tariffs. so I have a pretty good handle from the mainstream media, like how bad tariffs are going to affect Chinese imports. But I'm curious on the prescription drug front from the countries that you're working with, what is the impact, if anything, from the tariffs that are rolling out?

Bill Hepscher (40:06.981)
Let me tell you this, Cory, the funny thing is I've been doing this, like I said, for 23 years, and I thought we've answered every single question about safety and quality and all kinds of, mean, everything from tracking questions, whatever. And out of all those years, I never ever had anybody say to me, know, what about a tariff? Like, it just wasn't the topic of conversation. We talked about this a little bit at AgencyBlock. I think we all knew a little bit about tariffs from our, like, an old history class or whatever, but like, no one really.

to understand it now you go to dinner and we're having like conversations and your buddy is an expert on tariffs you know what I mean so we get the question all the time whether it's from our employer groups whether it's from our clients who've been ordering from us for years our understanding from the folks that we've spoken to in DC is that tariffs will not impact individual personal importation so if a person's ordering their medication from a pharmacy in Canada for their own personal importation

that's not gonna be impacted by tariffs. But the bigger conversation about tariffs is what is going to be impacted, and the White House has already talked about this, is pharmaceutical ingredients and pharmaceuticals that are manufactured overseas are definitely gonna be impacted by tariffs. What that means is I think people are gonna even need more access to international prescriptions because the cost of prescription drugs here in the United States is going to go up because of tariffs. It's just simply the...

the way it is. We might have talked about it a little bit too. think what a lot of folks don't even think about, they think it's just a financial conversation. The current administration is very, very concerned from a national security type of conversation because you may be aware that over 80 % of the prescription medications that are filled here in the United States are not actually manufactured here in the United States. One of the largest manufacturers of

prescription medications or the ingredients that come for prescription medications is China. And we know that at the end of the day, we may work out some of this tariff stuff with everybody else, but China and the US are definitely going to be at odds on that. So there's almost no getting away from the fact that prescription drug costs here in the United States are going to rise.

Bill Hepscher (42:17.785)
And I think there is going to be a big push to bring manufacturing back to the US of prescription medications, which may be a good thing for our national security, but that is going to impact the cost of the prescriptions. One of the reasons why we're manufacturing so many medications in India and China right now is because the cost of the manufacturing is so much less expensive. So ultimately, my answer to you is I don't think that our current clients are going to be impacted by tariffs. At least that's what we're hearing.

But I do think when we talk about the industry in general, meaning prescription drug costs, not international prescription, the costs are going to go up. And even for those generic drugs that we're used to getting for $2 a fill, there's been a lot of conversations that generic drug manufacturers say, we're simply not going to be able to do it at what we're currently spending. We're going to have to increase that cost or get out of the generic drug manufacturing side of the business because there's just not a lot of margin in there.

The name brand guys are making a bunch of margin. The generic guys are making very, very tight margins and there's not a lot of wiggle room without raising prices.

Cory Schmidt (43:21.634)
Right. Those input prices go up as do the drugs they're having to import back into the U S that I never really connect the dots. It sounds to me like, Bill, you need to rapidly expand the team and prepare for a lot more demand.

Bill Hepscher (43:32.219)
Well, hey, we're building all the time. So anybody out there who is looking to help, we're looking to hire for sure. But like I've told you, Cory, our main team is really the agents and the brokers that are out there telling the story because we're bringing them real value. And hopefully they recognize that we're doing it. You heard the story about my brother, we got involved in this business.

because we were trying to do the right thing. I certainly didn't think we were going to have a 23-year run. We thought we were going to make a little bit of a difference in the prescription drug cost change. That's not the case. We had the busiest year we've ever had last year. And sometimes we talk about when the government steps in and says, oh, we're going to do all this to actually lower the cost. Are they really lowering the cost of prescriptions? Are they just shifting the cost some way? And that's how we typically see it. All the changes I've seen in my 23-year career,

when the government steps in, actual cost goes up, it doesn't actually come down.

Cory Schmidt (44:32.908)
Yeah, it's a cool story. I love how you're helping consumers. You're helping brokers and agents bring better solutions to them. Congrats on a lot of success and appreciate you taking the time to spend with this bill. It's been very insightful and look forward to crossing paths again soon on the road.

Bill Hepscher (44:50.619)
I'm sure we'll see each other again at some point. And I will tell you one thing, if we actually do succeed in lowering the cost of prescriptions, that means we're going out of business, but that'll make me pretty darn happy if I go out of business because we actually impact the cost of care here in the United States. That's a positive thing. But just know, Cory, I may be calling on you for a job, know, pitching AgencyBloc at some point, but that'll be a very happy day in my life that if we actually go out of business because we did something to lower the cost of care.

Cory Schmidt (45:13.321)
All right.

Bill Hepscher (45:19.929)
That'll be a pretty good spot. Until then, we're gonna keep motoring along, working with clients, working with agents, working with guys like you over at AgencyBloc to change the world.

Cory Schmidt (45:28.974)
That's awesome. Appreciate it, Bill. Thanks for the time.

Bill Hepscher (45:31.344)
Thanks brother.