Pod Insights Pharmacy Podcast Network Easing Prior Auth Pain Points for Specialty Pharmacies with Develop Health | NASP Specialty Pharmacy Podcast About this episode In this episode of the NASP Podcast, host Sheila Arquette, President & CEO of NASP, speaks with Nico Kernick, Head of Growth and Operations at Develop Health. They discuss the ways AI is reducing friction and increasing transparency in the prior authorization process for providers and specialty pharmacies. Nico shares how Develop Health's AI-native workflows now support over 3 million patients, boosting submission and first-pass approval rates while keeping providers in control every step of the way. Listeners can expect to learn how pharmacies can get started overnight, plus a special offer for NASP members.
Transcript 0:05 Speaker 00 You are listening to the global network of podcasters dedicated to the pharmacy profession. Welcome to the pharmacy podcast network.
0:25 Speaker 01 You're listening to the NASP Specialty Pharmacy Podcast, a collaboration between the National Association of Specialty Pharmacy and the Pharmacy Podcast Network. Each episode dives deep into trends, challenges, innovations, and patient centric practices, shaping the future of this dynamic and rapidly evolving industry. Whether you're a pharmacist or healthcare provider, patient advocate, or industry leader, you'll hear expert insights, real world evidence, and thought provoking discussion that highlights all that makes specialty pharmacy special.
0:59 Speaker 02 In support of NASP's mission to empower specialty pharmacy stakeholders to advance the standard of patient care, NASP supports a free market healthcare system in which all specialty pharmacies compete on the same fair and level playing field, because that is in the best interest of the patients we collectively serve. NASP is committed to working with all stakeholders and policymakers to ensure that all patients have access to the life-saving medications they need and the high-touch patient care and support services they deserve from the pharmacy of their choosing.
1:30 Speaker 03 Hello, my name is Sheila Arquette, and I am the President and CEO of the National Association of Specialty Pharmacy. I am delighted to welcome my special guest, Nico Kernick, to this episode of the NASP Podcast. Nico leads growth and operations at Develop Health. A theoretical physicist by training, he moved from the UK to the US for his MBA at Harvard Business School, where he graduated as a Baker Scholar. He has spent the last few years in healthcare, building AI workflows that span pharmacy providers, manufacturers, PBMs, and patients. He lives in Seattle with his wife and three kids, with a fourth on the way. Nico, you're a busy guy. Thanks so much for joining us today.
2:12 Speaker 04 Sheila, thank you for having me. I'm very excited to chat and to be part of your network.
2:18 Speaker 03 So tell me a little bit about the history of Develop Health. How did you get it all started?
2:24 Speaker 04 Yeah, so Develop Health was started about three years ago. Initially, the founders, Mel and Ben, were kind of researching what pain points were the most acute for providers. And the problem that they just kept on being pointed back to was what you do once you have a script and how you actually get the medication that you prescribe to patients. And so they really set to solve that. And at first, they kind of built on existing tools and existing workflows that existed that were in the market. And then they just decided to rip it all out and build our own workflows. So since then, we've served over 3 million patients, automating their prior authorizations,
3:06 Speaker 04 helping understand benefit coverage and eligibility, and generally just trying to reduce the friction and the lack of transparency that exists in the world that we live in between prescribers and what they might prescribe for a patient and how that patient can actually pick it up in pharmacy.
3:25 Speaker 03 That's awesome. So I think I shared with you before, I was pharmacy director for a health plan for about 14 years. And prior authorization was definitely something that we heard an awful lot about. And even, you know, how the prior authorization requirements could be different with the same insurance company, right? Or the same managed care provider, just it was dependent upon the line of business and how, you know, crazy that used to make the office staff, which you can totally understand because we were just one insurer.
3:55 Speaker 04 Totally, yeah. There's such variety, and it's really hard to keep on top of all of it, especially when you think about, you know, a traditional provider office or pharmacy and the fact that they're seeing so many different patients on so many different plans with so many different medications. We handle thousands of different medications a day across hundreds of different plans, and their requirements are constantly changing. So you need to have a way to be sure about what is going to be covered for a patient, and then to make sure that if that patient should be eligible, that you get the right information in the right place to get them the authorization that they deserve.
4:37 Speaker 04 And so the way I think about it is that, you know, there is a certain set of rules that exists, and that, I think, is a design of the US healthcare system, which is going to hang around for a while. Prior authorizations aren't going anywhere. But there's two key elements that I think we can really improve. One is the friction that's caused by those rules. So, you know, there's no magic reason why it should take 20 minutes to fill in a form. There's no magic reason why sometimes you need to put a form in through a portal or send a fax or even call a PBM, right? That's just kind of unnecessary friction to check if a patient should be authorized or not. So one piece is friction, and the other piece is that transparency and the lack of transparency.
5:22 Speaker 04 It's just hard for someone, even if they're extremely motivated, to figure out what the requirements are and to really truly understand whether they're going to be covered or not. And so those two points are really where we're trying to help within the ecosystem to improve the process, reduce the friction, reduce the unnecessary workload that gets created for providers, for pharmacists, and increase the transparency so that more often we are getting the right medications into the hands of the patients that need them the most.
5:51 Speaker 03 Right, and I think people will debate this, and I mean, I think prior authorization has a role, right? And if there could be more communication between the physicians or the providers, and I guess the insurance companies, so that they understand why they're doing. I would find if I would call a provider and explain, well, this is why we're asking this, this is, you know, the reason for this, this is where it fits in the standard of care or the clinical guidelines, and they were so much more agreeable, as would anybody, right? If we collaborate, that's one thing. If you tell me what I'm going to do and you aren't the doctor, I'm not going to be happy with you, right?
6:25 Speaker 04 Totally. Or even worse, Sheila, if you tell me what's going to happen without any collaboration, and you tell me two weeks later, and you do it in a very encrypted way that's very hard for me to decipher, and that changes all the time, like, you know, there's just layers and layers of complexity that aren't necessary, even if we can agree that, you know, some kind of prior authorization process is required in some place.
6:51 Speaker 03 Right, absolutely. So how did specialty pharmacy end up being such a natural fit for what you built?
6:58 Speaker 04 Yeah, well, we started off by serving digital health providers. So one of our biggest customers, for example, is Ro. And we really built a very high-performing product with very good latency, very good performance, very good explainability, very good transparency, et cetera, because ultimately the patients that go to digital health are very demanding. They're, you know, young, very internet savvy, very LLM-enabled patients that expect to get things very fast and expect to have clear communication and transparency through it. And so we built all of these workflows from the inside out in a digitally and AI-native
7:42 Speaker 04 way, and have had them going at full scale now for a couple of years. And we started to look around and saying, okay, so we can either deploy this to more and more providers, which we started doing to a certain extent, right? So we're in providers that are, you know, small specialty clinics all the way up to large health systems. And we also see it as a massive pain point here when pharmacies are getting blocked by the same issues. Specialty pharmacies are kind of renowned for having a really tough spot in between providers, PBMs, and manufacturers, right? They want to keep providers, they want to make providers' lives as easy as possible. They want to, you know, help serve them, and they want to get, give patients the best
8:27 Speaker 04 experience possible. And they also need to convince manufacturers that they are good stewards of their brand, good stewards of their medication. And we just found that that was matching up really well with what our product was delivering in terms of higher submission rates, higher approval rates, and lower turnaround times. And so we started speaking to a few specialty pharmacies, started integrating into our first couple of pharmacy management systems, and have been really pleased with the interest and the demand that we've seen from SPs around the country.
9:00 Speaker 03 So when you talk to specialty pharmacy teams right now, what's the feedback that you're hearing?
9:06 Speaker 04 I think number one is that they, they lack visibility into the process, right? I think the biggest relief that we hear is like, oh, there is a way that I can stay in the loop here, because up until now, it's been a bit of a black box. A specialty pharmacy will receive a script, and if they need to go and do a prior auth, they send it out, and they don't hear about it. They don't know if the prescriber's receiving that notification, they don't know if they're providing clinical info, they don't know if it's been filled to the, you know, highest level of quality, et cetera. And a lot of places, those SPs are trying to help the providers with a lot of manual work and trying to, you know, help them through collaborative practice agreements or prior authorization agreements to take some of the workload off the provider's shoulders.
9:50 Speaker 04 And so what we're seeing is, you know, some pharmacies aren't yet helping providers, and they have a bit of a realization of like, oh, wow, there's a way that I can do this really well and, you know, be a differentiated partner for the providers that are prescribing to my pharmacy. And for the ones that are already having some of these relationships with providers, they could be local providers, they could be providers that are using those pharmacies for mail order, they're saying like, well, actually, I can do this, and I can do it in a much more cost-effective way. I can get AI to actually find the right form, AI to reach out to the providers, I can get all of the answers automatically filled, I can have AI figure out if there are any gaps in the clinical info that we have to make sure that we don't wait for a PBM to
10:35 Speaker 04 respond. And so I think, you know, our product just naturally solves a lot of the kind of head scratches that SPs have had for many years when they've been thinking about, how can I possibly help my providers as much as possible with these authorizations?
10:51 Speaker 03 What do you think surprises them the most once they're using your workflow?
10:56 Speaker 03 Is it like how much the tool can do? Is it the use of AI? Is it how much simpler it makes it, or reduction in time and take?
11:04 Speaker 04 I think the breadth of the applicability of this tool is very surprising. And it's not a tool that, you know, has a partnership with one or two PBMs. It's not a tool that's been written with code in a deterministic manner for one or two medications. It's a tool that can handle 100% of medications under the pharmacy benefit for 100% of PBMs through any submission channel. And that's really game changing to know that, you know, you're not using a tool that's going to pass you the difficult edge cases. You're using a tool that's going to handle 100% of volume and really take that workload off the pharmacy's shoulders and off the provider's shoulders. And that's, you know, that's a big relief because a lot of the existing tools out there
11:49 Speaker 04 will help with some of the easy ones. But then when there's, you know, a local Medicare plan that needs a different flow, and the tool's going to fall short and, and the pharmacist or the provider is going to be left to their own devices. And so the fact that you can actually get AI to be sufficiently broadly applicable to help with all of those cases is a, is a huge relief.
12:15 Speaker 03 So we've already mentioned, right, that most folks complain and specialty pharmacy is no different, that prior authorization just has to be painful, right? It is painful, it has to be painful. When you look at a pharmacy's PA process today, where do you actually see the scripts are falling through the cracks? And how much of that can be recovered?
12:37 Speaker 04 Oh, I think, I think there's a lot. I've met providers and I've met pharmacies that tell me that those, that those providers will not categorically submit a PA. They will not lift a finger to do it. And so I think there are some providers for whom like, you know, pharmacies lose entire scripts because there's just no way to communicate with them and get them to collaborate on a PA. That's the most extreme example. And we see that really in submission rate uplift. So we're up, we're lifting up submission rates by 10 to 20% versus baseline. That's a huge one. I, I think that the second one where there's just a lot of failed scripts is, or failed
13:17 Speaker 04 PAs, is in not having the right intelligence and the right filling of the PA upfront. So I think once, when you have a tool that's effectively doing thousands of PAs a day, you can think about it as like, you know, a really wise nurse that has learnt over decades how to fill in a particular PA and what the PBM requirements are and what they're going to ask for down the road. And the fact that we know that, the fact that we can draw attention to gaps that there might be and do that upfront, means that we're going to get a lot more approvals from the get go. That just brings more scripts that can be filled.
13:56 Speaker 04 And it also just avoids the scenario where you have to ask a prescriber to write an appeal or to do a resubmission because you're sort of taking care of a lot of those issues upfront. So I think, you know, we're submitting more, we're getting more first pass approvals, and we're also making the appeal process very easy if we do have to go there. So that if it's a good idea, more providers are actually going to do it rather than just say like, ah, no thanks, this is, this is too difficult, I'm just going to give up.
14:30 Speaker 03 I can't believe that though, that they say, I'm not going to submit that.
14:33 Speaker 04 Totally, yeah. I, I distinctly remember a CEMEA meeting a pharmacy. They said, I have, I have three or four providers who will not touch a script if I tell them it needs a PA.
14:45 Speaker 03 Oh my gosh, that's crazy. Yeah, yeah, yeah. So a lot of pharmacies would love to fix that friction we talked about, right? That PA friction with their prescribers. But they are worried about who's allowed to touch the submission and then how does the prescriber retain control? How do you handle that fine line between helping the pharmacy and keeping the provider where they need to be?
15:10 Speaker 04 Yeah. And so we, we first off focus on making sure there's enough transparency throughout the whole process. So we're always keeping the prescriber in the loop about what's happening. They've always got full visibility into what gets used from their EHR, how things are filled in, they can always edit anything. They get the final submission rights. Now, they can also sign a prior auth agreement directly with the pharmacy and that's between the provider and the pharmacy in the same way as if it wasn't using our tool to allow the pharmacy to touch, to edit, to submit. That's up to them. But I think what we're doing is that whoever, you know, in that relationship, whoever's
15:53 Speaker 04 comfortable taking which step of the process, we're enabling that and we're letting the other party have full visibility and see exactly what's going on there.
16:02 Speaker 03 I think transparency, right, seems to be the solution to every problem, or at least part of it.
16:07 Speaker 04 Honestly, I think it's, I think it's a big part of it, setting expectations and making sure there's transparency. It sounds very simple, but it's something that's hard to do at scale because there are so many moving parts. Like when we run a PA, right, we're contacting the PBM, we're contacting the provider, we're contacting the pharmacy, we're going into an EHR, we're going to into a PMS. And just getting all of that data into a place where it can be communicated to the different parties in a streamlined, useful way is difficult. You want full transparency, but you don't want to, you don't also want to spam the patient with like every single useless detail about the PA, even if you might have 100 million details.
16:49 Speaker 04 So AI is incredibly good at that because it can understand the purpose and the intention behind each step. It can look across a huge swath of data very, very fast. It can be, you know, very intelligent consistently across thousands of submissions a day. And just like having that layer that's kind of controlling the data flow allows kind of consistent, intelligent transparency.
17:18 Speaker 03 So GLP-1s have flooded specialty and mail order pharmacies with prior auth volume that a lot of teams weren't staffed or ready for. What are you seeing on those specifically? And does the approach hold up when a pharmacy is drowning in that kind of volume?
17:34 Speaker 04 Yeah. You know, AI is best when you put it at a high volume, I would say. So absolutely. I mean, we, we cut our teeth on GLP-1s. Customers like, like Ro are obviously super focused on GLP-1s. So, so we've got a lot of experience of submitting across different GLP-1s, across different plans and, you know, government, commercial, et cetera, et cetera. So we're very much trained up to be able to do those extremely well. And I think you're absolutely right that there's a huge volume of them. Sometimes we'll hear from pharmacies, they don't get the best margins on those, which is, you know, a fair complaint. But I think what we're typically trying to do here is reduce the friction that the
18:16 Speaker 04 provider sees generally in prescribing so that they prefer a certain pharmacy and then send more scripts. So it's not really about specifically the scripts that need a PA and their margin necessarily. It's about making the overall experience easier for people so that you become a pharmacy of choice, so that you remain a pharmacy of choice. And, and, you know, helping out of GLP-1 volume is going to be the biggest burden that you can remove from any of the providers that you're working with.
18:43 Speaker 03 Sure. So like a provider satisfaction tool.
18:47 Speaker 04 Yeah, exactly. Exactly. It's like, hey, as part of our relationship working with you, Provider Clinic, we're going to be taking this workload off your shoulders.
18:56 Speaker 03 Right, right. Everybody loves that.
18:59 Speaker 04 Everybody loves that.
19:02 Speaker 03 If I'm a pharmacy leader, listening to this discussion, and I like what I'm hearing, what does getting started with Develop Health actually look like? So for example, how much has to change on my end and how quickly would my team feel the difference?
19:17 Speaker 04 Yeah, it's, it's very quick and easy to try, right? Because you don't have to rip out any systems, you don't have to even really change workflows. Like what you can do is just decide how many, you could try, you know, 10 PAs a day if you wanted, or one PA a day or 100 PAs a day and just kick those off with us. We can get you set up literally overnight and see and get feedback from your providers on how they find the experience. And if, you know, if we find that providers love it, then we can help you scale to more. Once we really want to scale, the key is to integrate with the pharmacy management system. And we've got a few of the big ones already integrated. And, and that means that we can then kick off automatically.
20:00 Speaker 04 But in terms of testing out, it's really an overnight switch on, go to our website, look a demo, we can get you on overnight and you can test out the tool. We're also actually offering for NASP members a month free of prior authorization. So there's no implementation fee, there's no build out fee, there's nothing you even need to install on your computer. It's really kind of as simple as going to a webpage and kicking off a few scripts on our tool once we've, once we've signed a BAA. And then we can show you the impact on your providers and on, on your workflows.
20:34 Speaker 03 Awesome. Nico, what's that website that they should go to request the demo?
20:39 Speaker 04 Develophealth.ai forward slash pharmacies or just DevelopHealth.ai.
20:45 Speaker 03 Awesome.
20:46 Speaker 04 We're also going to be, Sheila, as you know, at the Inspire Conference in September. So we're really looking forward to speaking to people there. And if you want to speak to us live in person, then feel free to ping me. I'm Nico at DevelopHealth.ai and we can chat and set up time to meet there in person as well.
21:07 Speaker 03 Well, awesome. I can't wait to meet you in person.
21:10 Speaker 04 Yeah, it's going to be fun. I'm looking forward to it.
21:13 Speaker 03 Well, thank you so much for chatting with me and sharing this very timely and very valuable information.
21:18 Speaker 04 Thank you, Sheila, and thanks to your team. You've all been awesome to work with.
21:22 Speaker 03 As a reminder, NASP corporate members are invited to be my guest on one complimentary podcast per year. For more information about this or other NASP membership benefits and events, please feel free to reach out to [email protected] or visit our website at www.naspnet.org. Until next time, have a great day.
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