WEBVTT - GoodRx CEO Wendy Barnes Talks Earnings, Trump Healthcare Policies

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>We also continue to monitor different things that come out

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<v Speaker 2>of the White House, and they certainly have made some

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<v Speaker 2>comments when it comes to healthcare pharmaceuticals in the United States,

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<v Speaker 2>which is one of the reasons we want to really

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<v Speaker 2>get to our next guest, good X good Rx. I

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<v Speaker 2>should say they recently reported earnings. Just a little bit

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<v Speaker 2>of background. Shares did jump after the price the drug

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<v Speaker 2>pricing comparison software company. They did boost their guidance for

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<v Speaker 2>just a Ibada for the full year, falling better than

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<v Speaker 2>expected results for the first quarter. We did see analysts saying,

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<v Speaker 2>some of them that the Ibada beat and raised as

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<v Speaker 2>a good start to twenty twenty five for the company.

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<v Speaker 2>Let's get into the business and how White House policies

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<v Speaker 2>are impacting good Rx. Wendy Barnes is president and CEO

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<v Speaker 2>of the company. She joins us from Charlotte, North Carolina.

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<v Speaker 2>The company, by the way, Marky Kaplin about one point

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<v Speaker 2>four billion shares two a year to date, or down

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<v Speaker 2>about twelve percent. They're down more than fifty percent though

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<v Speaker 2>in the past year. Wendy, good to have you here

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<v Speaker 2>with us. There's a lot going on in your space.

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<v Speaker 2>But I want to talk first and start with a

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<v Speaker 2>new initiative that you guys have actually introduced today. It's

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<v Speaker 2>called the Community Links program. Why did you do this?

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<v Speaker 2>What was the impetus for creating it?

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<v Speaker 1>Hi, Carol, thanks for having me appreciate the question. So

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<v Speaker 1>you know, I would say the company's been on a

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<v Speaker 1>multi year journey to best partner with retail pharmacies, with

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<v Speaker 1>community pharmacies really being at the top of that list,

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<v Speaker 1>and this is really the culmination of that work.

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<v Speaker 3>And so what you've referenced.

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<v Speaker 1>The good RX Community Link is a portal by which

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<v Speaker 1>community pharmacies sometimes referred to as independent pharmacies. So think

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<v Speaker 1>of those as really your non chain pharmacies. They can

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<v Speaker 1>be as small as a single pharmacy or some community

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<v Speaker 1>independent pharmacy owners have, you know, fifty seventy five or

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<v Speaker 1>one hundred locations, but largely they're run independent of broader

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<v Speaker 1>management philosophy, and this is our effort to contract directly

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<v Speaker 1>with these pharmacies in a cost plus reimbursement mechanism manner. Look,

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<v Speaker 1>it's not any new news to you or probably to

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<v Speaker 1>your listeners that pharmacies continue to be under reimbursement pressure,

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<v Speaker 1>and we believe that they are key partners in our

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<v Speaker 1>broader mission to make medications more affordable and accessible for

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<v Speaker 1>every American. And so this effort is really one in

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<v Speaker 1>which we're trying to bolster reimbursement for those independent pharmacies

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<v Speaker 1>such that they can work with us directly. And in

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<v Speaker 1>addition to that, we're giving them access to ninety plus

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<v Speaker 1>brand deals that we have secured with pharmaceutical manufacturers over

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<v Speaker 1>the last twelve to twenty four months, and those continue

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<v Speaker 1>to grow such that the reimbursement on those same drugs

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<v Speaker 1>is favorable to those pharmacies. It's really no secret that

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<v Speaker 1>pharmacies have long struggled to have a favorable margin profile

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<v Speaker 1>on many brands that they fill, and this too gives

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<v Speaker 1>access to those programs for those independent pharmacies.

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<v Speaker 4>Well, Wendy anecdotally speaking, as the large pharmacies and the

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<v Speaker 4>chains have come under pressure, whether it's over store closures

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<v Speaker 4>or different things happening just in the space, we've all

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<v Speaker 4>reported on what's happened in cities and the way that

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<v Speaker 4>some of these pharmacies have closed down in certain cities.

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<v Speaker 4>Are you seeing more people go to these independent pharmacies.

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<v Speaker 4>I mean, anecdotally speaking, I can say that certainly the

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<v Speaker 4>way my family has changed its behavior just thanks to

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<v Speaker 4>availability and what pharmacies tend to actually have what we're

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<v Speaker 4>looking for. But how have you seen that affect the

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<v Speaker 4>overall landscape.

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<v Speaker 1>I don't know that we've seen a meaningful shift to

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<v Speaker 1>independent from chain. I think there's still a pretty good

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<v Speaker 1>mix of grosser versus independent versus chain, and candidly, you know,

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<v Speaker 1>mail order slash digital pharmacy. I think at the end

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<v Speaker 1>of the day, what we see is in the seventy

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<v Speaker 1>plus odd thousand pharmacy options that we have as consumers

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<v Speaker 1>in the US that as a consumer, you just really

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<v Speaker 1>want to get your drugs on your own terms, whether

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<v Speaker 1>it's mail to your home with your preferred community pharmacist

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<v Speaker 1>or at a chain or grosser. And we pride ourselves

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<v Speaker 1>on working really with all pharmacy such that you can

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<v Speaker 1>get your drugs when and where you know you desire

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<v Speaker 1>to do so.

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<v Speaker 2>Do you see it all that the independent channel is shrinking.

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<v Speaker 2>We've certainly seen it with some of the big pharmacy chains, right,

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<v Speaker 2>We've talked about it, You've seen the headlines. But I'm

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<v Speaker 2>just curious when it comes to independence, Wendy, do you

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<v Speaker 2>see any shrinkage in terms of the number of outlets

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<v Speaker 2>that are out There are no.

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<v Speaker 1>You know, I will say in the numbers that we've

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<v Speaker 1>looked at over the last couple of years, there are

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<v Speaker 1>still a good number opening in any given month. I

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<v Speaker 1>will say in our book, with the pharmacies that we

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<v Speaker 1>work with, I haven't seen significant shrinkage.

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<v Speaker 3>But I think there are certainly other data sources.

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<v Speaker 1>That would suggest that there are a numbers of independent

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<v Speaker 1>and or community pharmacies that are closing in or selling

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<v Speaker 1>their business to other owners. But in our particular book,

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<v Speaker 1>it's held pretty study.

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<v Speaker 4>How have independence traditionally reacted to the program at GoodRx,

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<v Speaker 4>because it's our understanding they've been a little skeptical about it.

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<v Speaker 4>How do you make sure that they're embracing it rather

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<v Speaker 4>than treating it with skepticism.

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<v Speaker 1>Sure, well, I think you know, Look, it's early days,

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<v Speaker 1>to be clear, and we're going to be on a

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<v Speaker 1>journey here. Communication is going to be the biggest part

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<v Speaker 1>of this program, in addition to delivering what we said

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<v Speaker 1>we intend to deliver, which is fair economics.

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<v Speaker 3>Over the course of these.

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<v Speaker 1>Contractual agreements, as pharmacies agree to contract with this directly

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<v Speaker 1>and that again can all be conveyed through that portal

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<v Speaker 1>that we stood up this morning.

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<v Speaker 3>So for me, it's really.

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<v Speaker 1>Going to be about how we deliver on the reimbursement

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<v Speaker 1>mechanism through this partnership.

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<v Speaker 3>And I think, you know, the ongoing communication.

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<v Speaker 1>Will support how the pharmacy community embraces this over time.

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<v Speaker 1>You know, we've certainly been setting out communications early on.

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<v Speaker 1>We've been in dialogue with many independent pharmacy owners to

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<v Speaker 1>speak through the program. But I think at the end

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<v Speaker 1>of the day, it's really going to be the outcome

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<v Speaker 1>of the program and the economics.

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<v Speaker 3>That we deliver that we'll prove it out over time.

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<v Speaker 2>Well, that's why I want to kind of just dig

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<v Speaker 2>a little bit deeper, Wendy. You know, for this to

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<v Speaker 2>work for you guys, this new rollout, this Community Links program,

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<v Speaker 2>the economics have to work right for the independent pharmacy.

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<v Speaker 2>So I'm just curious what you can tell us how

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<v Speaker 2>the economics are different for the pharmacy that directly contacts

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<v Speaker 2>with GoodRx versus using maybe one of the pharmacy benefit

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<v Speaker 2>managers the PBMs and their networks to dispense a prescription.

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<v Speaker 2>What can you tell us more specifically about the economic

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<v Speaker 2>advantage for independent pharmacies to use your route versus going

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<v Speaker 2>to the PBMs.

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<v Speaker 1>Sure happy to do so. So it's really the agreement

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<v Speaker 1>directly with US is rooted.

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<v Speaker 3>On a NAEDEK plus reimbursement.

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<v Speaker 1>Is one of multiple benchmarks that is effectively a cost

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<v Speaker 1>mechanism that stands for national average drug acquisition cost, and

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<v Speaker 1>we are negotiating with independent pharmacies to do this with

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<v Speaker 1>that predicated as the baseline, plus an amount that keeps

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<v Speaker 1>them profitable on filling these claims.

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<v Speaker 3>So that's really the precursor, if you.

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<v Speaker 1>Will, and or the meat of how this agreement will work,

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<v Speaker 1>which again provides favorable economics to these pharmacies. The distinction, Carol,

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<v Speaker 1>as you called out to perhaps doing it through a

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<v Speaker 1>larger payer, when you think about how it works through

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<v Speaker 1>let's just say a larger PBM, there are multiple patient

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<v Speaker 1>pay slash cash networks through which an independent pharmacy can participate.

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<v Speaker 1>And when they're in that type of an algorithm, for

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<v Speaker 1>lack of better description, typically it's going to search for

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<v Speaker 1>not necessarily favorable margin for the pharmacy. And so there

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<v Speaker 1>would be times in their previous arrangement, whereby they may

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<v Speaker 1>not always have favorable economics to fill those prescriptions. And

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<v Speaker 1>by contracting directly, we are putting terms and conditions in

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<v Speaker 1>the agreement that allow them to have certainty around not

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<v Speaker 1>only the reimbursement, but also access to drugs that they're

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<v Speaker 1>not fulfilling today in patient pay programs. Again, that would

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<v Speaker 1>be the list of brands that I mentioned that I

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<v Speaker 1>believe are ninety plus at this point, that they're going

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<v Speaker 1>to have certainty around how they're reimbursed in this direct

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<v Speaker 1>engagement through us that they're not getting through their arrangements today.

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<v Speaker 4>Hey, Wendy, we're watching everything happening outside of Washington and

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<v Speaker 4>coming out of Washington really closely. We're expected to hear

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<v Speaker 4>from the President in just a few minutes. There's an

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<v Speaker 4>event happening in the Oval Office that's about a kid

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<v Speaker 4>account event scheduled. It was scheduled for two pm. We

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<v Speaker 4>understand the press pool has gathered. If the President starts

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<v Speaker 4>to take questions, we will certainly go there. In the meantime,

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<v Speaker 4>thinking about healthcare in the United States, it is inextricably

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<v Speaker 4>bound to politics, no question. If what the President calls

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<v Speaker 4>the big beautiful bill were to pass, we could see

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<v Speaker 4>at least, according to the CBO estimates of a dramatic

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<v Speaker 4>increase in the number of uninsured almost eight million. What

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<v Speaker 4>does that mean for your business and how much of

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<v Speaker 4>your business comes from medicaid and uninsured people today?

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<v Speaker 1>So interestingly, of the users who access our pricing on

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<v Speaker 1>any given day, roughly ninety percent actually have insurance today.

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<v Speaker 1>So I think there's a bit of a misperception that

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<v Speaker 1>the overwhelming number of consumers who use us in fact

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<v Speaker 1>don't have insurance, which is not the case.

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<v Speaker 3>Having said that, who does.

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<v Speaker 1>Come and look for pricing through our different platforms is

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<v Speaker 1>your consumer who's motivated to check for competitive pricing, whether

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<v Speaker 1>they have insurance or not. And we continue to be

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<v Speaker 1>the number one platform to look for the best price

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<v Speaker 1>deal that you can find on any particular medication. And

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<v Speaker 1>so as it pertains to what may or may not

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<v Speaker 1>pass in the bill, whether it's inclusive of Medicaid cuts

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<v Speaker 1>which continue to be advanced, and or other cuts that

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<v Speaker 1>would put pressure on your typical household income, what we

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<v Speaker 1>do know is that those should produce tailwinds for us

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<v Speaker 1>as a business. For consumers, whether they're insured or not,

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<v Speaker 1>but specifically as it relates to Medicaid cuts and the

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<v Speaker 1>number of individuals that may fall out of coverage. We

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<v Speaker 1>do believe that that presents an opportunity for us to

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<v Speaker 1>continue to support any American that really is struggling to

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<v Speaker 1>purchase their medications.

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<v Speaker 2>Wendy, just got thirty seconds. You know, the word that

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<v Speaker 2>we all use to describe the environment right now is uncertain.

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<v Speaker 2>There's a lot coming out, certainly leaders and CEOs. Just

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<v Speaker 2>in your industry too. You've got write Aid doing a bankruptcy.

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<v Speaker 2>You know, I think about the macro within your business

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<v Speaker 2>and just macro overall. Just got about twenty five seconds.

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<v Speaker 2>How do you look at the outlook?

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<v Speaker 3>Just quickly, you know the outlook?

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<v Speaker 1>You're right, turbulent is a fair description. Having said that,

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<v Speaker 1>businesses that stay the course and have a mission that

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<v Speaker 1>makes sense for the consumers in which we serve.

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<v Speaker 3>Will continue to thrive.

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<v Speaker 1>And our goal, of course is getting medication affordably and

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<v Speaker 1>effectively into the hands of every American who need it,

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<v Speaker 1>and we believe it will be in a position to

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<v Speaker 1>take advantage.

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<v Speaker 2>Wendy Barnes, President CEO OFRX