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Top Trends: Learn What is Impacting How Americans Consume and Pay for Health Care
In our rapidly changing and dynamic health care marketplace a major question persists: how can we increase access to care and improve quality while lowering overall costs? At the 2016 CVS Health Forum, where the company’s pharmacy benefit management (PBM) clients learn about advanced solutions for managing their pharmacy benefit, CVS Caremark President Jon Roberts discussed how the company is addressing this cost-quality-access dilemma.
Roberts discussed the following top trends as major market drivers that are impacting payers’ budgets and changing the way that Americans consume health care. In addition, he outlined how our enterprise-wide innovations bend the cost curve in a meaningful and sustainable way for our PBM clients while improving quality and access for their members.
Slowing of the generic drug pipeline
While generics have been a key lever in helping to control prescription drug costs, there are now fewer new generics being introduced and, as a result, we are seeing generic drug price inflation. We are working to address this through our Red Oak Sourcing collaboration with Cardinal Health. This collaboration has helped improve the cost margin of generics, drive our generic dispensing rate to more than 80 percent across our book of business, and help reduce payer spend by four percent.
Higher drug prices
Rising costs of prescription drugs grabbed headlines this year as manufacturers set increasingly higher prices on new and existing products. Our CVS Health 2015 drug trend results also showed that inflation on traditional non-specialty branded products is the single largest contributor to pharmacy spend. Despite these cost pressures, we helped cut our PBM clients’ drug trend, a measure of growth in prescription spending, to five percent in 2015 from a high of 11.8 percent in 2014.
Cost, however, continues to be a top concern for payers, and we are implementing an aggressive approach to help anticipate and mitigate its impact on already strained health care budgets. And although cost containment is a major focus, we must also balance quality and access for the PBM members we serve. Several studies from the CVS Health Research Institute show that many of the cost management strategies that PBMs employ – including narrow pharmacy networks and formulary management – also increase member access to care and improve health outcomes.
Growth of specialty
The specialty market continues to experience tremendous growth, with many new and expensive therapies in the pipeline. With new drugs, rising prices and growing utilization, it’s predicted that specialty will account for 50 percent of total drug spend by 2018. We are focused on ensuring that members access the right drug at the right time and for the right price. In addition, we provide holistic clinical care and support to help those on specialty medications start and stay on their treatment regimens. Together, this improves quality of care, leads to better health outcomes and helps control overall costs.
Growth of value-based model
As payers move away from fee-for-service models, providers have more responsibility for population health. We see this as a tremendous opportunity and are already working to share valuable data and analytics from our PBM, pharmacies and retail clinics about patients’ conditions, risk profiles and behaviors with providers to help better support them, improve patient outcomes and close gaps in care.
More consumer accountability
Consumers are becoming much more involved in making decisions about their health care and this “retailization” of health care is poised to accelerate in the coming years. Through our recent acquisitions of Target and Omnicare, our consumer touchpoints are growing, offering increased opportunities to help members on their path to better health throughout their lifespan.
Digital tools will also play a transformational role in educating, empowering and engaging consumers. In addition to our retail pharmacy tools, we recently launched several tools for our PBM members to help them order and manage prescriptions online; check prescription costs and plan coverage; and track their individual or family’s drug-related expenses for the year.
“CVS Health is committed to ongoing innovation aimed at improving cost, quality and access for all those we serve,” Roberts concluded. “Our one-of-a-kind, connected health care model enables us to leverage our scale and enterprise assets to lower costs and improve health outcomes.”