Plumlee: Definitely. My mom is a pharmacist, so I spent a lot of time as a kid going to see her at work. And my dad is general counsel for an orthopedic company. My hometown is Warsaw, Ind. Some people refer to it as the “Orthopedic Capital of the World.” Zimmer Biomet is headquartered there. DePuy Synthes is there. Medtronic has offices there, as well as a lot of cottage businesses that support the orthopedic industry. In my hometown, the rock star was Dane Miller, who founded Biomet. I have no formal education in medicine or health care, but I’ve seen the impact of it. From my parents and some cousins, uncles who are doctors and surgeons, it’s been interesting to see their work and learn about what’s the latest and greatest in health care.
Henry: What’s so nice about you in particular is, with that background of interests from your family and your celebrity and accomplishments in professional basketball, you have used that to explore and promote ways to make progress in health care and help others who are less fortunate. For example, you’re involved in a telehealth platform for all-in-one practice management; affordable telehealth for pediatrics; health benefits for small businesses; prior authorization—if you can help with prior authorization, we will be in the stands for you at every game because it’s the bane of our existence; radiotherapy; and probably from mom’s background, pharmacy benefit management. Pick any of those you’d like to talk about, and tell us about your involvement and how it’s going.
Plumlee: My ticket into the arena is investment. Nobody’s calling me, asking for my expertise. But a lot of these visionary founders need financial support, and that’s where I get involved. Then also, with the celebrity angle from being an athlete, sometimes you can open doors for a start-up founder that they may not be able to open themselves.
I’m happy to speak about any of those companies. I am excited about the relaxed regulation that’s come from the pandemic; not that it’s like the Wild West out here, but I think it has allowed companies to implement solutions or think about problems in a way that they couldn’t before the pandemic. Take the prior authorization play, for example, and a company called Banjo Health, with one of my favorite founders, a guy named Saar Mahna. Medicare mandates that you turn around prior authorizations within three days. This company has an artificial intelligence and machine-learning play on prior authorizations that can deliver on that.
So efficiencies, things that increase access or affordability, better outcomes, those are the things that attract me. I lean on other people for the due diligence. The pediatric play that you referenced is a company called Blueberry Pediatrics. You have a monthly subscription for $15 that can be reimbursed by Medicaid. They send two devices to your home—an otoscope and an oximeter. The company is live in Florida right now, and it’s diverting a ton of emergency room (ER) visits. From home, for $15 a month, a mom has an otoscope and an oximeter, and she can chat or video conference with a pediatrician. There’s no additional fee. So that’s saving everyone time and saving the system money. Those are the kinds of things I’m attracted to.
Henry: You’ve touched on a couple of hot button issues for us. In oncology, unfortunately, most of our patients have pain. I am mystified every time I try to get a narcotic or a strong painkiller for a patient on a Friday night and I’m told it requires prior authorization and they’ll open up again on Monday. Well, that’s insane. These patients need something right away. So if you have a special interest in helping all of us with prior authorization, the artificial intelligence is a no brainer. If this kind of computer algorithm could happen overnight, that would be wonderful.
You mentioned the ER. Many people go to the ER as a default. They don’t know what else to do. In the COVID era, we’re trying to dial that down because we want to be able to see the sickest and have the non-sick get care elsewhere. If this particular person or people don’t know what to do, they go to the ER, it costs money, takes a lot of time, and others who may be sick are diverted from care. Families worry terribly about their children, so a device for mom and access to a pediatrician for $15 a month is another wonderful idea. These are both very interesting. Another company is in the pharmacy benefit management (PBM) space. Anything you could say about how that works?
Plumlee: I can give an overview of how I look at this as an investor in the PBM space. Three companies control about 75% of a multibillion dollar market. Several initiatives have been pursued politically to provide transparent pricing between these PBMs and pharmaceutical companies, and a lot of people are pointing fingers, but ultimately, drug prices just keep going up. Everybody knows it.
A couple of start-up founders are really set on bringing a competitive marketplace back to the pharmacy benefit manager. As an investor, when you see three people controlling a market, and you have small or medium PBMs that depend on aggregators to get competitive pricing with those big three, you get interested. It’s an interesting industry. My feeling is that somebody is going to disrupt it and bring competition back to that space. Ultimately, drug prices will come down because it’s not sustainable. The insurance companies just accommodate whatever the drug pricing is. If the drug prices go up, your premiums go up. I think these new companies will be level-setting.
Henry: In my world of oncology, we’re just a little more than halfway through 2020 and we’ve had five, six, seven new drugs approved. They all will be very expensive. One of the nicer things that’s happening and may help to tamp this down involves biosimilars. When you go to CVS or Rite Aid, you go down the aspirin aisle and see the generics, and they’re identical to the brand name aspirin. Well, these very complex molecules we used to treat cancer are antibodies or proteins, and they’re made in nature’s factories called cells. They’re not identical to the brand name drugs, but they’re called biosimilars. They work exactly the same as the branded drugs with exactly the same safety–our U.S. FDA has done a nice job of vetting that, to be sure. X, Y, Z Company has copied the brand drug after the patent expires. They were hoping for about a 30% discount in price but we’re seeing more like 15%. Nothing’s ever easy. So you make a very good point. This is not sustainable and the competition will be wonderful to tamp down these prices.