At a time when the cost of prescription drugs continues to draw widespread attention and scrutiny, prescription drug trend for our CVS Caremark pharmacy benefit management (PBM) clients dropped to an average of 3.2 percent in 2016 as compared to 5.0 percent in 2015. In addition, 38 percent of our clients achieved negative trend which means they actually spent less on their prescription benefit in 2016 than they did in 2015, and 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 our clients and their members.”
In the full report, we explore the factors that helped drive down prescription drug trend, a measure of growth in prescription spending, to a four year low. In fact, 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. In addition, generic drugs continue to be a moderating force on drug trend and also help keep costs low for members.
Without these strategies in place, prescription drug trend would have risen by 11.0 percent for our clients, driven primarily by price inflation for branded specialty and traditional drugs, as well as increased utilization due to an aging population, which underscores the vital role that PBMs play in the health care system.