CVS Health PBM Solutions Blunted the Impact of Drug Price Inflation, Helped Reduce Member Cost, and Improved Medication Adherence in 2018

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Over the past three years, CVS Caremark delivered $141B in prescription drug savings along with $18.3B in savings in avoided medical costs due to improved adherence

WOONSOCKET, R.I., April 11, 2019 /PRNewswire/ -- CVS Health (NYSE: CVS) today announced that, in 2018, the company's pharmacy benefit management (PBM) solutions blunted the impact of drug price inflation achieving a negative -4.2 percent price growth for non-specialty drugs and a 1.7 percent price growth for specialty drugs. Furthermore, 44 percent of CVS Caremark's commercial PBM clients saw their net prescription drug prices decline from 2017 to 2018. In addition, in 2018, CVS Caremark's focus on drug affordability, simplifying prescription management and applying interventions to improve medication adherence have helped increase the percentage of optimally adherent members in key chronic diseases such as diabetes, high cholesterol, and depression, which can result in reductions of nearly $2,000 in the overall cost of care per member.

"Over the last three years, even as drug prices have increased by 25 percent, CVS Caremark has helped our clients save more than $141 billion by blunting drug price inflation, prioritizing the use of effective, lower-cost drugs and reducing the member's out-of-pocket spend," said Derica Rice, president, CVS Caremark, the PBM business of CVS Health. "Moreover, our focused adherence efforts have helped more members take their drugs as prescribed, which we estimate has saved our clients an additional $18.3 billion in avoided medical costs since 2016."

Impact of Formulary Management

Managed formularies enable CVS Caremark to take advantage of market competition on behalf of its PBM clients and promote the use of effective, lower cost drugs. In fact, in 2018, clients that adopted the managed formularies offered by the Company saw savings of nearly 14 percent per 30-day prescription, even as drug price inflation, while slightly moderated, grew four times faster than overall inflation.

Managing Overall Spend for Diabetes and Making Insulin More Affordable

Rising costs for the treatment of diabetes continue to challenge payors and patients, but strategic management of the antidiabetic category helped CVS Caremark control overall spend. In 2018, trend for antidiabetic drugs was negative -1.7 percent, despite increasing utilization and brand price inflation of 5.6 percent.

Formulary management strategies also played a key role in helping keep insulin costs affordable for payors and consumers. In 2017, CVS Caremark led the market in taking steps to blunt the impact of branded insulin price increases by making the less expensive long-acting insulin Basaglar, the preferred drug on the formulary. This formulary change resulted in member out-of-pocket costs declining by nine percent, improved A1C levels, and savings for payors.

Improving Medication Adherence and Reducing Consumers Out-of-Pocket Costs

Despite the growth of high deductible plan designs, CVS Caremark's programs and solutions helped reduce out-of-pocket costs for consumers for the sixth straight year. In fact, two out of every three CVS Caremark members who used their prescription benefit in 2018 spent less than $100 on their prescriptions and more than 85 percent spent less than $300. In addition, although medical costs have grown 14 percent since 2013, over that time period CVS Caremark members paid 8.4 percent less for a 30 day prescription.

Containing Ever Increasing Costs for Specialty Drugs

The utilization and share of gross cost for specialty drugs continues to grow -- reaching 45 percent of total pharmacy spend in 2018, as compared to 42 percent in 2017 -- despite comprising only one percent of prescription claims overall. In 2018, although manufacturer-driven price inflation for specialty drugs measured 7.6 percent, CVS Caremark was able to keep specialty drug price growth at just 1.7 percent for clients. This was achieved through a tightly managed approach including effective formulary strategies, indication- and outcomes-based contracting, and utilization management to guide safe and appropriate use for patients dealing with complex and often debilitating conditions.

Prescription drug trend is the measure of growth in prescription spending per member per month. Trend calculations take into account the effects of drug price, drug utilization, and the mix of branded versus generic drugs as well as the positive effect of negotiated discounts and rebates on overall trend. The 2018 trend performance is based on a cohort of CVS Health commercial PBM clients employers and health plans.

To learn more about the CVS Caremark 2018 drug trend.

About CVS Health

CVS Health is the nation's premier health innovation company helping people on their path to better health. Whether in one of its pharmacies or through its health services and plans, CVS Health is pioneering a bold new approach to total health by making quality care more affordable, accessible, simple and seamless. CVS Health is community-based and locally focused, engaging consumers with the care they need when and where they need it. The Company has more than 9,900 retail locations, approximately 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 92 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year, expanding specialty pharmacy services, and a leading stand-alone Medicare Part D prescription drug plan. CVS Health also serves an estimated 38 million people through traditional, voluntary and consumer-directed health insurance products and related services, including rapidly expanding Medicare Advantage offerings. This innovative health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs. Find more information about how CVS Health is shaping the future of health at https://www.cvshealth.com.

Media Contact:

Christine Cramer
CVS Health
(401) 770-3317
christine.cramer@cvshealth.com

SOURCE CVS Health

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Moriarty Addresses Prescription Drug Affordability at Roll Call Live

Moriarty Addresses Prescription Drug Affordability at Roll Call Live
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In the midst of a very important discussion around prescription drug pricing in Washington, DC, CVS Health sponsored an event with CQ Roll Call titled “Empowering Patients as Partners in Health Care” to focus on the issue and the consumer experience in health care today. At the event, policymakers and health care policy experts discussed the progress being made to make the health care system work better and identified areas where more solutions are needed. Tom Moriarty, Chief Policy and External Affairs Officer, and General Counsel for CVS Health, addressed the affordability of prescription drugs – one of the most critical issues impacting patients today.

Moriarty emphasized how high drug prices can have an adverse effect on patients’ health. For example, when medications are above $200 in out-of-pocket costs per prescription, more than 40 percent of patients do not pick up their prescriptions. To ensure patients can afford their medicines and take them as directed, Moriarty outlined the importance of the pharmacy benefit management (PBM) tools and solutions CVS Health is pioneering to improve medication adherence and reduce patients’ out-of-pocket costs. He also highlighted policy ideas that can increase market competition and provide the transparency that consumers, providers and pharmacists need to get the most effective drug at the lowest cost.

Innovative Solutions to Address Rising Drug Costs

The status quo of rising drug prices is not acceptable. Moriarty highlighted how CVS Health is implementing solutions to mitigate the effects of manufacturer-driven price increases. We are:

  • Pioneering the use of point-of-sale rebates and started by offering them to our CVS Health colleagues. As a result, we’ve seen adherence improvements of four to six percent. Additionally, we offer point-of-sale rebates to our clients – making this benefit available to 10 million people covered by CVS Caremark plans.

  • Utilizing preventive drug lists for colleagues to make medications for common chronic conditions, including diabetes, hypertension and asthma, available at a zero-dollar copay. Data show that this can lead to better adherence and provide medical cost savings and productivity gains.

  • Expanding visibility into prescription drug costs – starting at the doctor’s office and culminating at the pharmacy counter. At the doctors’ office, we provide real-time benefits to ensure prescribers have information on patients’ covered benefits and what patients will pay out-of-pocket under their plan for a specific drug. At the pharmacy counter, our retail pharmacists are using the Rx Savings Finder to help members save, in some instances, an average of $420 per year.

Rebates are Discounts that Help Lower Costs for Patients and the Government

There has been a lot of discussion about the role of rebates in the drug pricing system, which are discounts used to reduce costs for patients and government programs. Moriarty debunked the myth that drug companies increase prices as a result of having to pay rebates, pointing to the fact that there is no correlation between manufacturer-driven price increases and these rebates and discounts. In fact, list price is increasing faster for drugs with little competition than it is for medications with competition and substantial rebates and discounts.

Despite the fact that brand drug manufacturers increased list prices by an average of 9.2 percent annually between 2008 and 2016,QuintilesIMS Institute, Medicines Use and Spending in the U.S. (May 2017). https://structurecms-staging-psyclone.netdna-ssl.com/client_assets/dwonk/media/attachments/590c/6aa0/6970/2d2d/4182/0000/590c6aa069702d2d41820000.pdf?1493985952 CVS Caremark has been able to keep drug price growth nearly flat at 0.2 percent by negotiating rebates and discounts and encouraging the use of lower cost, clinically appropriate medicines.

Policy Solutions to Lower Drug Costs for Patients

PBMs are very effective at lowering drug prices when there is competition, but there is still a substantial number of products that face limited to no competition. In addition, due to the increased enrollment in high-deductible health plans, the deep discounts being driven by PBMs are not being seen at the pharmacy counter by patients when they are in their deductible phase. To address these challenges, Moriarty presented four patient-centric solutions:

  • Medicare should drive the adoption of real-time benefits to give patients and their physicians visibility into lower costs and offer an option for a point-of-sale rebate Part D plan.

  • For plans associated with health savings accounts, policymakers can take immediate action to change Internal Revenue Service (IRS) rules to allow those plans to provide first-dollar coverage for drugs outside of the deductible, even for maintenance medications intended to treat an existing chronic condition.

  • By prohibiting pay-for-delay agreements and passing the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act to stop Risk Evaluation and Mitigation Strategy (REMs) abuse, we can curb anti-competitive practices and help bring lower cost, clinically equivalent generic medications to market more quickly.

  • Lastly, we must accelerate the pathway to bringing biosimilar drugs to market. Biosimilar drugs have the potential to save the health system $54 billion dollars over ten years, but our country is far behind in accessing these medicines. In Europe, 53 biosimilar medicines have been approved. In contrast, only seven are on the market in the U.S. today.

CVS Health will continue to innovate and use every tool at our disposal to bring down the costs of drugs while also advocating for effective policies that increase access to affordable medications.

For more information on how CVS Health is working to expand access to more affordable and effective health care, check out our Cost of Care information center and the CVS Health Impact Dashboard. To stay informed about the latest updates and innovations from CVS Health, register for content alerts and our bi-weekly health care newsletter.

Tom Moriarty speaks at a recent CQ Roll Call event
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CVS Health Statement on Trump Administration Initiative to Reduce Drug Costs

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Company highlights support for several new policies to address rising prices

WOONSOCKET, R.I., May 11, 2018 /PRNewswire/ -- In response to President Trump's special address on the high cost of prescription drugs, CVS Health (NYSE: CVS) today issued the following statement:

"At CVS Health we see every day the impact rising drug costs have on our patients. That's why we have developed and supported innovative solutions to lower health care costs and we look forward to partnering with leaders to continue to do so. We commend the Trump Administration's focus on reducing the cost of prescription drugs, and we agree more can and needs to be done.

"CVS Health is already well positioned to implement many of the key proposals outlined by the Administration. Today, CVS Health provides universal availability of rebates at the point of sale as an option for all clients to help their members save on out of pocket costs. We believe this approach leads to greater transparency in drug prices, and unquestionably demonstrates the true cause of rising drug costs for consumers: high list prices set by pharmaceutical manufacturers.

"CVS Health also provides patients with information on what they will pay out-of-pocket under their insurance plan for their prescription drugs and can also provide therapeutic alternatives that may be less expensive. This information reaches prescribers through an innovative e-prescribing system that can be utilized at the point of prescribing and at the pharmacy counter to quickly and seamlessly evaluate individual prescription savings opportunities in real time, saving patients up to $75 per prescription.

"CVS Health also supports several new initiatives that will help patients save money on their prescriptions, including reforms to Medicare Part D rebates that provide savings for seniors, not a windfall for drug manufacturers, and establishing an out-of-pocket cap for beneficiaries in Medicare Part D, which would meaningfully benefit seniors with extremely high drug costs. And as we have previously said, CVS Health does not engage in gag clauses and we support efforts to ban them. We believe that, working together with the Administration and Congress, we can advance effective solutions that meet our shared goals."

Policy solutions that lower drug prices for consumers and reduce out-of-pocket costs are aligned with CVS Health's business model and would not be expected to have a negative impact on profitability. The company has long been committed to utilizing all possible tools to reduce the cost of prescription drugs. These tools, combined with increasing competition in the marketplace by making more generics available, increasing the use of biosimilars, and advocating for eliminating tactics that stall competition, are essential in tackling the problem of high cost drugs.

As a pharmacy benefit manager, CVS Health negotiates the lowest possible net price from drug manufacturers for clients, which are health plans, employers, unions, government programs like Medicare Part D and Medicaid, and ultimately for the millions of Americans who pick up their prescriptions at pharmacy counters every day. CVS Health returns approximately 95 percent of discounts and other price concessions like rebates to commercial clients and their members, while at the same time keeping drug price growth at a minimal 0.2 percent, the lowest level in five years, despite manufacturer brand list price increases on drugs near 10 percent. For Medicare Part D plans, 100 percent of the rebates are passed through to lower premiums, which reduces costs for both the beneficiary and the government. The tools used by pharmacy benefit managers to remove costs from the health care system are projected to save $654 billion on drug costs over the next decade.

In 2013, CVS Health introduced the first Point of Sale (POS) rebate program for clients that today passes the savings from the rebates negotiated directly to approximately 10 million members. CVS Health also offers clients other savings opportunities such as preventive drug lists that make medications for many common chronic conditions available at a $0 copay.

About CVS Health

CVS Health is a pharmacy innovation company helping people on their path to better health. Through its more than 9,800 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 94 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year, expanding specialty pharmacy services, and a leading stand-alone Medicare Part D prescription drug plan, the company enables people, businesses and communities to manage health in more affordable and effective ways. This unique integrated model increases access to quality care, delivers better health outcomes and lowers overall health care costs. Find more information about how CVS Health is shaping the future of health at https://www.cvshealth.com.

Media Contact:

Erin Shields Britt
(401) 770-9237
Erin.Britt@CVSHealth.com

Investor Contact:

Mike McGuire
401-770-4050
michael.mcguire@cvshealth.com

SOURCE CVS Health

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A New Approach to Pricing of Pharmacy Benefit Management Services

A New Approach to Pricing of Pharmacy Benefit Management Services
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Across our CVS Health enterprise, we are transforming the way we deliver care to help more people on their path to better health. As part of this, our pharmacy benefit management (PBM) company, CVS Caremark, today introduced the new Guaranteed Net Cost pricing model, which will help redefine the industry by offering drug cost predictability and pricing simplicity for our clients.

We sat down with CVS Caremark President Derica Rice to learn more about the company’s innovative new PBM pricing model and how it will deliver value to the health care system.

Why is CVS Health introducing the Guaranteed Net Cost pricing model?

The pharmaceutical market continues to be highly dynamic and managing costs effectively can be challenging for payors, patients and the entire health care system. PBM strategies such as preferred formulary placement and drug exclusions have helped create, and keep up, the pressure on pharmaceutical manufacturers and have been successful in keeping drug prices in check.

However, as the marketplace has continued to change at a rapid pace, it is clear that the PBM model must also evolve to continue to deliver value to the health care system, while also optimizing the quality of care. And, the time is right for change.

We believe the Guaranteed Net Cost pricing model will better serve our payor clients by providing them cost predictability and to help them clearly see the net cost of their pharmacy benefit, ultimately enabling them to select their PBM provider based on who can deliver lowest net cost. This also helps plan sponsors continue to provide an affordable benefit.

How is this new model different than what is currently in the market?

While current pricing models offer discounts and rebates, they do not provide net cost predictability, and the variability between PBMs can make it difficult for plan sponsors and PBM consultants to draw direct comparisons.

Our new model more closely aligns PBM incentives with plan sponsors’ objectives by focusing on a simple concept – net cost per drug claim. It simplifies the financial arrangements underlying PBM contracts by guaranteeing the average net spend, after discounts and rebates, per prescription for each distribution channel. Overall this model will help provide our clients more predictability related to their drug spend and eliminates the need for clients and consultants to project drug price inflation, shifts in drug mix and the total value of rebates.

In addition, under this new model, we will also pass through 100 percent of the rebates to clients. Clients also continue to have the option to implement point-of-sale rebates for their members, as CVS Health does for its own employees. In turn, this can help to lower out-of-pocket costs for consumers.

How will Guaranteed Net Cost change the PBM industry?

At CVS Health, we are working to help redefine the PBM industry in a way that better serves payors, patients and the entire health care system by helping to lower prescription drug costs and maximize payor cost savings.

We believe guaranteeing the net cost is in the best interest of the client, and we are confident clients and consultants will also see it that way. We think this model is the right choice for any PBM that wants to demonstrate the value of its cost-control strategies and alignment with clients’ objectives. As such, we believe that other PBMs will also want to adopt this model, which will help to collectively deliver even greater value to the entire health care system over time.

We are confident that this new model is the right thing to do and the right approach for the future and believe that payors, consultants and other PBMs will agree that a simpler approach to PBM pricing can deliver better drug cost predictability and ultimately, help better show the value of a PBM.

What’s next for CVS Caremark and the PBM industry?

By simplifying the way we contract with our clients, we can focus on maximizing the effective PBM tools we already employ to reduce costs for the client and the consumer, and direct our energies toward developing additional innovative tools and approaches.

We anticipate that PBMs will continue to play an invaluable role in the health care system in the coming years and are working with partners and stakeholders across the industry to continue to find new ways to help improve access to care and lower overall health care costs.

Learn more.

For more information on how CVS Health is working to expand access to more affordable and effective health care, check out our Cost of Care information center and the CVS Health Impact Dashboard. To stay informed about the latest updates and innovations from CVS Health, register for content alerts and our bi-weekly health care newsletter.

12.05.18

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Proven Savings with Real-Time Prescription Benefits

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CVS Health’s real-time prescription benefits solution helps lower member out-of-pocket costs. Powered by our proprietary engine Script Intelligence™, we can offer actionable, up-to-the-minute, member-specific plan information across multiple points of care – at the doctor’s office, at the pharmacy and at the member’s fingertips – and provide visibility to lower cost, clinically appropriate brand and generic alternatives.

When members switch medications using real-time prescription benefits, they are saving an average of $120 to $130 per fill.

The solution also helps improve the member and provider experience by streamlining the prescribing process and getting more affordable medications to members faster.

For more of the actionable ideas, strategies and expertise we provide payors to help lower drug costs and improve health outcomes, visit CVS Health Payor Solutions

CVS Caremark | Drug Focus
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CVS Health PBM Clients Achieved Lowest Prescription Drug Trend in Four Years, Despite Rising Drug Prices

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CVS Caremark's PBM management solutions helped reduce drug trend from 5.0 percent in 2015 to just 3.2 percent in 2016

Member out-of-pocket costs dropped 3.0 percent

WOONSOCKET, R.I., March 15, 2017 /PRNewswire/ -- CVS Health (NYSE: CVS) today announced that, in 2016, its pharmacy benefit management (PBM) clients achieved the lowest drug trend in the past four years, despite rising drug prices. CVS Caremark clients saw their prescription drug trend drop to an average of 3.2 percent compared to 5.0 percent in 2015. In addition, 38 percent of CVS Caremark commercial clients achieved a negative trend which means they actually spent less on their prescription benefit in 2016 than they did in 2015, despite rising drug prices. Out-of-pocket costs for members also dropped 3.0 percent compared to the previous year.

"No one is more concerned about the high cost of prescription drugs than CVS Health," said Troyen Brennan, M.D., Executive Vice President and Chief Medical Officer, CVS Health. "Our very favorable drug trend results for 2016 demonstrate that we have been able to deliver best-in-class value to clients and their members."

Unmanaged drug trend for 2016 was 11.0 percent, driven primarily by price inflation for branded specialty and traditional drugs, as well as increased utilization due to an aging population. CVS Caremark was able to reduce trend for clients by 7.8 percentage points to 3.2 percent through PBM management solutions that include price protection and the negotiation of rebates, of which more than 90 percent are passed back to clients. CVS Caremark also encouraged the use of less expensive generic drugs through managed formularies and applied targeted approaches to addressing high-spend drivers such as hyper-inflating drugs. On average, clients who selected the CVS Caremark standard managed formulary achieved a trend of 2.2 percent, which was less than half the trend of 4.5 percent for clients who used a custom formulary and opted out of drug removals. Additionally, clients who chose our generic-focused value formulary had the highest generic dispensing rate (GDR) at 88.2 percent and the lowest baseline cost at $81.86 per member per month.

Although overall drug price inflation was lower in 2016, it still accounted for almost 80 percent of the unmanaged trend. The relative impact of inflation on specialty branded products continued to increase relative to traditional branded medications. At the same time, overall specialty products grew to nearly 36 percent of overall gross spend. Three of the top five categories contributing to gross trend were specialty drug categories, including anti-inflammatory medications for rheumatoid arthritis and psoriasis; antineoplastics and adjunctive therapies used to treat cancer; and psychotherapeutic and neurological agents, including multiple sclerosis therapies. Meanwhile, generic utilization growth kept costs low for members as well as clients and drove a 3.5 point overall cost reduction for clients.

CVS Caremark offers a variety of solutions, including flexible formulary options based on clinical evidence, to help manage pharmacy costs while ensuring patients have access to the medications they need. In addition, CVS Caremark's strategic assessment of the pharmaceutical marketplace enables the company to negotiate aggressive rebates and help to lower costs for clients. More than 90 percent of brand manufacturer contracts also include price protection, a critical element in protecting clients in a market characterized by significant drug price increases.

Prescription drug trend is the measure of growth in prescription spending per member per month. Trend calculations take into account the effects of drug price, drug utilization and the mix of branded versus generic drugs as well as the positive effect of negotiated rebates on overall trend. The 2016 trend performance is based on a cohort of CVS Health PBM commercial clients employers and health plans.

To learn more about the CVS Caremark 2016 drug trend, click here.

About CVS Health

CVS Health is a pharmacy innovation company helping people on their path to better health. Through its more than 9,700 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with nearly 90 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year, expanding specialty pharmacy services, and a leading stand-alone Medicare Part D prescription drug plan, the company enables people, businesses and communities to manage health in more affordable and effective ways. This unique integrated model increases access to quality care, delivers better health outcomes and lowers overall health care costs. Find more information about how CVS Health is shaping the future of health at https://www.cvshealth.com.

Media Contact

Christine Cramer
CVS Health
(401) 770-3317
christine.cramer@cvshealth.com

Investor Contact

Nancy Christal
CVS Health
(914) 722-4704
nancy.christal@cvshealth.com

SOURCE CVS Health

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Health Care Decoded: Increasing Access and Affordability

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Vice President of Policy and Regulatory Affairs Donald Dempsey recently represented CVS Health at Roll Call’s Health Care Decoded on a panel titled, “Access, Affordability and Government Spending.” The session was part of a larger summit on key health care issues, such as health care costs and drug pricing.

During the discussion, Mr. Dempsey highlighted several ways CVS Health is helping people access affordable care: increasing access to lower cost drugs; providing tools to help patients take their medications; and utilizing pharmacy benefit management (PBM) strategies to drive down costs. He also offered insights into the role that public policy could play to further support these efforts across the health care system.

Increasing Visibility into Patients’ Drug Costs

Mr. Dempsey touched on how increasing transparency into patients’ drug benefits at the point of prescribing and at the pharmacy counter helps prescribers and patients better understand options before a script is written. CVS Caremark’s real-time benefits, for example, allows prescribers to view a patient’s drug coverage and identify member-specific medication costs for a specific drug, as well as potential therapeutic alternatives. This can help prescribers and patients make more informed decisions and find the lowest cost, clinically effective treatment for their care.

Helping Patients Stay Adherent to the Medications

Mr. Dempsey also noted that patients who stay adherent to medication have lower health care costs and better health outcomes. That is why CVS Health has developed a number of programs and tools to make medication management easier, including:

Part of ensuring patients remain adherent is ensuring they get the greatest value for the cost of their medications; CVS Health has been exploring how value-based drug formulary models can help patients do so. And while progress has been made, removing regulatory barriers, like anti-kickback statutes and civil money penalties, could promote more collaboration and innovation around value-based solutions for patients.

Leveraging Competition to Drive Down Costs

Mr. Dempsey underscored how CVS Health deploys several PBM strategies that use competition to drive drug price reductions for beneficiaries. Leveraging competition to negotiate discounts, identifying and including clinically appropriate drug options at reduced prices in our formulary, and working to align drug prices with their value to our beneficiaries help reduce the cost of care for our patients. Beyond our PBM strategies, we also support policy solutions that promote competition, such as the CREATES Act, which seeks to remove barriers to competition to further drive down drug costs.

Mr. Dempsey’s co-panelists included Donald May of AdvaMed and Rodney Whitlock of Campaign for Sustainable Rx Pricing, who echoed the need for increased competition and broader collaboration to drive down the cost of care and drug prices. 

For more information on how CVS Health is working to expand access to more affordable and effective health care, check out our Cost of Care information center and the CVS Health Impact Dashboard. To stay informed about the latest updates and innovations from CVS Health, register for content alerts and our bi-weekly health care newsletter.

Panelists Donald Dempsey (CVS Health), Donald May (AdvaMed), Rodney Whitlock (ML Strategies & Campaign for Sustainable RX Pricing) and moderator Andrew Siddons (CQ Roll Call)
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Greater Rx Price Transparency at the Point of Care

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Casey Leonetti, Senior Vice President of PBM Innovation recently participated in a panel at HIMSS 2018, one of the largest annual health information and technology conferences. The panel, Bringing Prescription Price Transparency to the Point of Care brought together industry experts to discuss price transparency challenges and solutions.

Moderated by Dr. Pat Salber of The Doctor Weighs In, the panel opened with some startling facts.

Did you know…

  • Medication cost can be a significant factor when a patient is deciding whether or not to fill a prescription.https://www.ncbi.nlm.nih.gov/pubmed/24687067
  • In addition, approximately 80 percent of physicians said manual prior authorization requests require extra work, rework and follow up, which can also delay the start of an important therapy or result in poor compliance.https://www.beckershospitalreview.com/healthcare-information-technology/providers-frustrated-with-prior-authorization-workflows-5-stats-to-know.html

Ms. Leonetti discussed this as the impetus for launching CVS Health’s real-time benefit capability, which provides visibility to member-specific medication costs and available lower-cost therapeutic alternatives at the point-of-prescribing and at the pharmacy. Specifically,

  • Prescribers are able to see specific benefit information for CVS Caremark PBM members integrated directly into their e-prescribing workflow, and even before they prescribe a drug, prescribers can also see the cost of the drug based on the patient’s coverage, factoring in the their remaining deductible.
  • In addition, the prescriber is able to review up to five clinically appropriate branded alternatives or therapeutically equivalent generic medications specific to the patient’s formulary coverage.
  • Prescribers also have visibility to requirements, such as prior authorization or step therapy, enabling them to immediately submit an electronic prior authorization request and in most cases, receive a near real-time decision.
  • Pharmacists at all retail pharmacies within the CVS Caremark network have visibility to the same list of clinically appropriate formulary alternatives provided to the prescriber.
  • And, CVS Caremark members are also able to find lower-cost alternatives within the Check Drug Cost tool on Caremark.com, including visibility to their remaining deductible.

Altogether, this type of transparency helps eliminate disruptive situations where the patient arrives at the pharmacy counter and is unable to fill a prescription because, for example, it is not covered on the formulary or requires additional approvals. It also helps ensure that the patient doesn’t abandon the prescription because of cost. In addition, real-time benefits help ensure that the member is accessing the most clinically effective and affordable medication, which can help keep costs low for the entire health care system.

The other panelists, including representatives from Surescripts and Aprima, also provided their perspectives on greater prescription price transparency at the point-of-care.

For more information about how CVS Health is working to ensure patients have access to affordable health care, visit our Cost of Care information center and the CVS Health Impact Dashboard. And to stay informed about the most talked-about topics in health care, register for content alerts and our bi-weekly health care newsletter.

Panelists at the HIMSS 2018 conference
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The Truth Behind Drug Rebates and How to Help Make Drugs More Affordable

The Truth Behind Drug Rebates and How to Help Make Drugs More Affordable
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Rising drug prices are having an impact on patients every day, especially those in high deductible health plans who are paying an increasing share of the cost of their prescription drugs. While the current debate about drug pricing and the role of pharmacy benefit managers (PBMs) centers on rebates and their impact on drug costs, it omits key facts and obscures the truth behind rising drug costs. At CVS Health, we are debunking the pervasive myth that rebates drive up drug prices by showing that rebate retention is not correlated with higher drug prices.

In addition, often lost in the debate is a discussion of what is working. For example, PBM cost containment strategies have a proven track record of helping improve medication adherence and promoting better patient health while keeping drug cost inflation under control in spite of continued manufacturer driven drug price increases.

At CVS Health, we are committed to using every tool possible and continuing to drive innovation to bring down the cost of drugs. We remain focused on providing the right drug to the right patient at the right time at the lowest possible cost.

Learn more.

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As a PBM and an Employer, We Know Rebates and Innovation Lower Drug Costs

As a PBM and an Employer, We Know Rebates and Innovation Lower Drug Costs
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This op-ed authored by Larry Merlo, President and CEO of CVS Health, was originally published by Morning Consult on October 3, 2018.

Rebates are the latest political hot potato being thrown around in Washington as policymakers consider approaches to lowering the cost of prescription drugs. And depending on who you talk to, prescription drug rebates are either the problem or the solution to high cost drugs.  While pharmacy benefit managers (PBMs) use rebates as a tool to drive discounts and costs savings for prescription drugs, pharmaceutical manufacturers say they must set their list prices ever higher because PBMs demand and keep higher and higher rebates.  And so the circle goes…

It’s time to put to rest the mistaken belief that rebates cause prescription drug list price increases. To the contrary, the data shows no correlation between manufacturer-driven price increases and drug rebates. In fact, list prices have increased faster for drugs with small rebates than for medications with substantial rebates. 

The truth of the matter is that PBMs have been successful in negotiating rebates with drug companies and that virtually all of those rebates are passed on to clients, such as large employers, unions and health plans.  Recently, the two largest PBMs, CVS Caremark and Express Scripts, said that they keep just 2 percent and 5 percent of rebates respectively, passing along the rest to clients who use the rebates to make prescription drugs more affordable for their employees and members and to bring down their other health care expenses, like health benefit premiums.

But that still leaves the question of what actually happens to drug rebates – and if there is a better way to utilize them to make prescription drugs more affordable for consumers. At CVS Health, we have undertaken comprehensive efforts to help reduce the cost of drugs that include, amongst many other tools, making rebates available to patients when they purchase their medications. 

In fact, as both a PBM and a large employer, CVS Health sees this issue from both sides. As an employer, we spend $1.2 billion annually on health care benefits, of which $250 million is for prescription drugs. In our employee plan, we use rebates to bring down the cost of premiums and to help our employees with their out-of-pocket drug costs. 

Like many large employers, CVS Health offers a high deductible health plan with a Health Savings Account (HSA) to its employees, and we have approximately 185,000 employees and dependents currently enrolled in the plan.  In the United States, 45 percent of all covered beneficiaries are now in high deductible health plans which means they are seeing higher out-of-pocket costs on the part of the benefit they use the most – their prescription drug coverage. 

High deductible plans associated with HSAs could be more effective in improving medication adherence and health outcomes while controlling cost if they provided more first dollar coverage at the pharmacy counter for prescription drugs. The Trump Administration could take immediate action by regulation to expand the preventive products and services now allowed to be covered under high deductible health plans to include products intended to prevent the worsening of chronic diseases, or to allow a high deductible health plan to cover drugs prior to satisfaction of the deductible. 

We know firsthand that this works. CVS Health fully pays for certain drugs, including a number of generic medications, for its covered employees and dependents under the preventive drug list prior to the employee reaching the deductible. Under this coverage, our generic dispensing rate has improved, reducing costs for both CVS Health and our employees.  

Our medication adherence metrics for preventive drug regimens for conditions such as hypertension, hyperlipidemia, heart failure, diabetes, asthma/COPD and depression have also improved.  Our research shows that health care costs for patients with these conditions are reduced when they take their medications as prescribed.  For example, for patients with congestive heart failure, CVS Health found that they spend nearly $8,000 less per year by adhering to their medication.

As an additional step to managing health care costs more effectively, CVS Health also instituted point-of-sale rebates so that our covered employees have the direct benefit of the discounts our PBM negotiates from the manufacturer. And, we are so convinced that point-of-sale rebates are effective in reducing high out-of-pocket costs for those on high deductible health plans while increasing adherence, improving health outcomes and keeping costs down, that we have urged our clients to adopt this same approach.  

In fact, currently 10 million lives covered by our PBM are in point-of-sale rebate plans. It’s important to note that point-of-sale rebate plans are not an all or nothing choice. Rebates can be used to help keep premium costs lower while also being applied at the point of sale to help lower out-of-pocket costs.

CVS Health as a large employer, in addition to being a health care company, has wrestled with many of the same challenges other employers do as we seek to balance member costs and offer a sustainable benefit.  We, like our clients, use rebates as a tool to drive discounts and support the health care coverage we provide to our employees. By combining point-of-sale rebates, zero dollar co-pays for preventive drugs with a comprehensive preventive drug list, we are able to address costs both as an employer and for our employees individually – and others could certainly do the same.  

In fact, we encourage our clients to do exactly that. We would all be healthier for it.

A prescription pill bottle.
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