New Jersey and Mark Cuban take on high drug costs

And tonight we are talking to Michael Diamond from the Asbury Park Press, of course, the home of Mr., the one, the only Mr. Bruce Springsteen, and of course, Mr. Michael Diamond. Hi, Michael. Thanks for being with us. We appreciate it. Thanks. Thanks for having me. Can you work at the Asbury Park Press and not be a Springsteen fan? It's not allowed. That's the first question you get. So. Do they check your badge? Do they ask you your favorite album, favorite song? They check your badge and they just opened a new Springsteen Center in West Long Branch and Long Branch at Monmouth University that is really neat and definitely worth a trip. I haven't been yet, but I actually keep hearing about it. I, as a born and raised Jersey girl, it's also in my blood as well. So it's, you know, it's part of my calling card here. I did want to, before I get into your reporting, when we take you behind the headline, because we think this is. Your reporting is so interesting that you have done, and honestly, it affects so many people in the state of New Jersey. I did want to just start by asking you a little bit about the Asbury Park Press. I'm so familiar with it, in part, I think, because it is upheld as one of the greatest newspapers in New Jersey. It's a place that people look to, I think, for your quality reporting. But if people have been living under a rock and are not familiar with the Asbury Park Press, can you tell us a little bit about the paper? Yeah, so we're a general interest newspaper, been around probably 120, 130 years. We cover Monmouth and Ocean County. You know, 80 towns, two counties, the state, and, yeah, kind of try to cover the whole region, high school sports, entertainment, restaurants, and, you know, municipal government, all sorts of things, housing, health care, where I get involved with a lot, so it keeps us busy. There's, you know, 1.2 million people in our coverage area, so we've got a lot to cover. Yeah, and it's obviously, I mean, I would think. Just even like the post-Sandy world, it's been such an exciting and eventful decade plus down the shore, as people say. So there's no shortage of news for you guys to report. No, and it's changed so much since Sandy and then again in the pandemic. We had so many people sort of migrate down here during the pandemic from New York and northern New Jersey for more space. The housing market got really tight and we're still working through that. So, um... You know, you sort of see things like, you know, his rumps in the New Hamptons, stuff like that. So it's it's pretty hot now. Yeah. Have you noticed a sort of a noticeable shift in the coverage or in the way that people consume their news? Again, now that you've seen such an influx from especially North Jersey or I'd imagine actually even from the Philly area up. Amen. It's it's kind of. Yes. Yes, you know, it used to be. Pre-Sandy, the Jersey Shore was a middle-class, working-class place where people had homes for generations. And that's changing fairly quickly if you think about it in the last 10 years. And now we're getting million-dollar homes that are seasonal along the shore. And then there's also more affordable places in Ocean County. And Monmouth County, its housing market is really It's really tight. It's sort of like the same types of issues, you know, schools. you know, affordable housing, affordability is kind of the buzzword today. What people are looking for, taxes, you know, perennial New Jersey stories. I've been here for 25 years now, and sometimes it feels like we sort of retread the same issues over and over again. I hear you on that one. I've been here for 15. Yeah, sometimes the same stories come back up around again. Yeah, but I'm sure you feel the same way as a local journalist. You find a new way to tell them based on the environment that you're in. And I think that's actually a great way to pivot to the story that you're bringing us tonight as we go behind the headline, talking about the the challenge or I should say the desire in New Jersey to make prescription drug costs more affordable for. For those who are state employees who rely on the state coverage plan. Right. And you have the governor touting this. You've got billionaires like Mark Cuban stepping into the mix. But I guess the question is, can it actually happen? So let me turn the floor over to you. Just give us a little bit of a back story here. This is everybody's always talking about rising drug prices from the federal level, state level, local level in our own families, at our own dinner tables. So how did this story become your story? Well, I've covered health care now really since the Affordable Care Act in 2010 and sort of following the changes that have been going on with the industry here in New Jersey. And it seems like we're going into another phase where health care costs are rising faster than inflation again since the pandemic. And you're seeing it with prescription drugs as well. So this story kind of Came up on the radar because, you know, Governor Sherrill in September came out and said, you know, that state health workers and state school employees, they're about 690,000 members who get their coverage through these plans. They're going to see their premiums increase for medical costs like 15 percent for drug costs, some as high as 40 percent. And she reached an agreement with the unions, 17 unions that represent state workers, and said, we'll waive the costs, we'll waive the premium increase for now, but we're going to put together a working group that's going to get to the bottom of this and put the plans on a more sustainable path. And I sort of saw that. I was like, okay, another committee is going to look at this. Great. It's not the first time that's happened. But then a month later, Mark Cuban jumps in on X and tweets out that he's ready to volunteer to help New Jersey lower its drug costs. And I was like, I wonder why Mark Cuban cares so much about New Jersey's drug prices. So that's kind of where the whole ball got rolling. Governor Sherrill tweeted back that, yeah, let's do this. We're done kicking the ball down the—we're done kicking the can down the road. My team will be in touch. And then Mark Cuban, you know, tweeted back, let's get ready to tick some people off. And then that was it. So he just stopped tweeting? The tweets have stopped. And then there was some—so then— You know, around that time, Governor Sherrill introduces the members of the working group. And it's like, you know, all the stakeholders, the 25 unions are represented there and the hospital association and the insurance companies, including the insurance company, the company that represents New Jersey's pharmaceutical drugs, OptumRx. They're also involved. And I'm going to make sure I heard you right. Right, because I, ooh. The very entity that is in charge of the program also has a seat at the table to determine how ineffective the programs are? Did I get that right? That's when we put it. Yeah. Did I hear you right, Michael? Yeah, that's kind of what, yeah, and we sort of thought, well, you know, it's the same old thing. A Republican senator who's on the committee, Declan O'Scanlan, who's from down here, said You know, if they're just going to have the same folks involved, what's going to happen? And. And if you follow health care long enough, you know, every entity in there is pointing the finger at the other guy. It's their fault that prices are so high. So I don't know what would happen once you get all those folks in the room. There's a lot of money at stake. The unions want to keep their benefits. The question is who's going to give ground. Um, And that's where Mark Cuban came in and said, hey, you need an outside voice here to shake things up. So he and Mikey Sherrill have something in common in that they've both been pretty vociferous pointing out the perils of pharmacy benefit managers. It's a type of company in the health care system in the industry that negotiates drug plans for employers. You know, negotiates with manufacturers, it sets up the formularies, which are the drugs that it sort of steers the members to and the pharmacies themselves. So, yeah, yeah, no, no, no. I mean, you know, and as I was reading through your reporting, I thought it was interesting that you kind of highlighted what would what is sort of being called this two billion dollar problem at this point. I mean, this is not a cheap one or an easy one to fix. But it's not. If it was, it would have been fixed by now. We are We, you know, the argument, pharmacy benefit managers will say we're really important to keep prices under control and to make sure that your members are getting the best deal possible. But there are a ton of critics, you know, from academics to both sides, both political parties who say they are Sort of like the way they negotiate deals, it sort of can make drugs more expensive. So, um, And the way that works is that they'll negotiate rebates with manufacturers, and the drug makers will give them rebates so that they'll be included in the formulary. Their drug will be sold to members. Thank And the question is, do they pass that rebate on to the employer? make things less expensive for the employer or do they pocket it to make more money? And in some cases they pocket it. In New Jersey, they, in the contract that the pharmacy benefit managers, you. OptumRx, they're owned by United Health Group, an insurance company, and they signed a contract with the state. It calls for them to pass through all the rebates to the state. But what we don't know is how much the state pays for them to administer the plan. And will they not report that or will they not tell us that or has it's redacted in the contract? I think for competitive reasons, I've asked both state and an Optum and didn't get a response from them. And. And there are lawmakers there who say, you know, trying to figure out how much we're paying for drugs is almost impossible. Yeah. The question that keeps coming into my mind is who wins and who loses with this winner would be. You know, the pharmacy benefit managers, assuming they're, you know, you know, getting paid for the contract and the loser could be the taxpayers, because ultimately we pay health care costs for for state employees. And those, as you mentioned, those costs are just going to continue to go up, especially if something's not done. That's, yeah, that's the risk, and that's, you know, where does it end? Right now it's being driven by some of the GLP-1 drugs, you know, Ozempic and Wegovy. Those are really popular, and costs there are up 60% for state employees from the past year or so. But Cuban's model doesn't handle that, right? Cuban's model doesn't deal with the GLPs. Cuban founded Cost Plus Drugs. This was in 2022, and it's an online site that sells. His argument is, let's just get rid of the middleman altogether, and we'll negotiate with the drug companies. We'll sell it online to the members, and we'll charge you 15%, and you know how much everything costs. He has a couple issues. One is that he only sells generic drugs. Uh, and not brand names, name drugs. And it would be really interesting if he could figure out a way to get involved in New Jersey for, you know, manufacturers to sell their drugs through Cost Plus Drugs. And the other issue is that, you know, you can go to, if you're an employee and you have a plan, you can go to cost plus drugs and buy the drug, but it won't count toward your deductible. So, um, you know, you have to do a lot of math. Yeah. I don't like that. A lot of people don't, really, frankly. All right, Michael, thank you so much for all of this. What's the next step here? What should we keep our eye on when it comes to this story? What's the next hurdle here? Well, the next step is for the working group to break down into subgroups and talk to experts and come up with recommendations to give to the governor, which is going to go into next year. So it's going to be around for a little while. All right, so you're on this story until it's done, huh? Yeah, I think so. It'll be really it's an interesting one to see to see, you know, how much Paul Mark Cuban has one question to ask you, which has absolutely nothing to do with drug prices. If you'll indulge me before we go. I understand the Asbury Park Press has a Springsteen reporter, and I was just wondering what the qualifications of that person are and how one might apply. You have to be Chris Jordan. And, uh, he's been doing this for a really long time and, um, has it down. He does have to, he seems to work around the clock. Uh, so I don't know if that's okay with you. Um, we do that anyway, so I'm good with that. Yeah, I don't know. I'll, um, I'll see what he thinks we can. I'm sorry. Does he hang with Bruce? He's had a couple interviews with Bruce, and, you know, Bruce's legacy runs really—his tentacles run far here, and, you know, it's an industry in itself, and we're really lucky that he just gives so much back to the shore, and, you know, he always seems to come back here, and I've heard he has a subscription to the press. He hasn't written me yet, but... It's coming. But maybe he can join forces with Mark Cuban and help kind of fix the situation that we're in and it'll all come right back around and then you can get the breaking story. Yeah, he can only do so much, but maybe. Yeah, he's got his own life to live. All right, Michael, where can people find you? Of course, at the Asbury Park Press. But if they want to get in touch with you, how do they do that? By email. I'm at [email protected] and my stories run on app.com. Thank you. We know people will be talking about it tomorrow, especially since they heard it here first. We really appreciate it, Michael. Thank you. Come back and join us. Thanks for having me. All right.