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Innovative Solutions to Address Rising Drug Prices
Chief Policy Officer and General Counsel Tom Moriarty recently participated in a panel at the AHIP National Health Policy Conference about drug pricing, its impact on health and financial stability, and solutions for bringing down costs and spurring innovation. Mr. Moriarty focused on the various ways CVS Health is helping to make drugs more affordable for patients and engaged in a broader discussion about policy solutions that promote the competition needed to drive down drug prices.
Rising Drug Prices and Increasing Health Care Costs
The overwhelming majority of people spend less than $500 on prescription medicines per year, but for some patients, especially those on expensive specialty therapies, annual out-of-pocket drug costs may be higher. Specialty drugs, such as biologics which are innovative and complex to develop, frequently lack the competition necessary to drive down drug prices. Though they represent a small percentage of drugs on the market, specialty drugs are the fastest growing area of drug development and constitute the largest portion of drug spend.
To help drive down the cost of specialty biologics and provide patients with more therapeutic options, Mr. Moriarty emphasized the need to clear the regulatory pathway for more biosimilars to be approved. Expanding the number of biosimilars on the market allows pharmacy benefit managers to incorporate lower cost, clinically effective medicines into their formulary strategies. Starting in 2017, CVS Caremark began including certain biosimilars and follow-on biologic drugs over higher cost biologics, saving clients and patients money.
In addition, when patients don’t take their medicines as prescribed – known as medication non-adherence – it can lead to higher costs in the health care system as a result of avoidable complications and disease progression. Addressing the impact of high cost drugs requires parallel strategies of increasing affordability for patients and providing effective support to help them adhere to their treatment plans.
Making Drugs More Affordable for Patients
Addressing the high cost of prescription drugs will help ensure that patients can access the care and treatments they need. This is why Mr. Moriarty spoke about CVS Health’s new strategies to help increase pricing transparency and lower costs while providing high-quality care for patients.
High out-of-pocket costs are shown to be a barrier to accessing needed care. Mr. Moriarty touched on the available option of applying negotiated discounts on drugs at the point-of-sale to reduce members’ out-of-pocket costs for prescriptions. This option, which is currently available to nearly 12 million people covered by CVS Caremark, can help improve adherence to medications by reducing patients’ costs at the pharmacy counter.
Additionally, CVS Health recently launched Real-Time Benefits for CVS Caremark members, increasing visibility into member-specific medication costs and lower-cost therapeutic options at the point of prescribing and at the pharmacy. This system provides drug cost transparency for prescribers, pharmacists and patients, which can help patients access the most clinically effective and affordable therapy for their condition. Early results show that the vast majority of prescribers using this capability, enabled through their electronic health record, have switched their patients’ drugs when not covered on their formulary or if there is a less expensive option available.
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.