Joshua Fredell, Pharm.D. | PBMI Innovator

Joshua Fredell, Pharm.D.

Joshua Fredell, Pharm.D., is passionate about helping employers and health plans develop pharmacy benefit designs that best meet the needs for affordable and accessible drugs.

As senior vice president of CVS Caremark, Fredell and his team are focused on developing strategies that help create savings for clients of CVS Caremark, the pharmacy benefit manager (PBM) of CVS Health. This includes developing targeted formulary approaches for high-cost therapy classes, better control of expenditures on specialty drugs and improving the patient/provider experience.

“My team gets to build and evolve as we see the market evolving,” he says. “We’ve been innovating on the benefit design itself, making sure clients have a lot of options to consider that fit their philosophy and needs. This can take the form of having different formulary options, different pharmacy network options, or helping clients understand the pros and cons of a three-tier design or a four-tier design.”

Fredell says his team works with clients to help them determine what type of pharmacy model best fits the organization. CVS Caremark can provide customized formulary designs that offer different pricing options and utilization management options, as well as copay tiers and amounts. “We assist them in how to think about the formulary design based on their philosophy and what benefit they want to offer their members, but also how that’s going to influence how much the benefits are going to cost.”

Managed Healthcare Executive and the PBMI selected Fredell for the inaugural Pharmacy Benefit Management Institute (PBMI) Innovators Award, which recognizes professionals in the industry who are leading innovation in pharmacy benefits.

Fredell, 47, lives in Arlington Heights, Illinois, just outside Chicago, with his wife and two children, aged 16 and 14. He grew up in western Pennsylvania and has stayed a Pittsburgh Steelers fan. He graduated from the University of Pittsburgh with a Pharm.D. degree.

Fredell says he was on the well-trodden path to work in retail pharmacy. But he had an opportunity to learn about managed care pharmacy while an intern at the University of Pittsburgh Medical Center (UPMC) Health Plan. A light went off, and he followed up with a residency there.

“I was captivated by the confluence of helping patients have access and affordability to the medications they need, but also how that has to be balanced with this larger thing: employer or a health plan costs and care and outcomes,” he says. “I started to think about healthcare from a broader population perspective.”

After his time at UPMC Health Plan, Fredell joined CVS Caremark in 2003 and moved to the Chicago area. CVS Caremark is one of the “big three” PBMs vertically integrated into larger healthcare companies. Those arrangements and their market power have drawn scrutiny and
some criticism.

At CVS Caremark, Fredell says he can focus on the bird’s-eye view afforded by population health: how to keep care affordable for an entire population and ease its navigation of healthcare and pharmacy while managing client budgets. Within that big picture, he says he works to keep up the quality and access for individual members.

“That combination of factors was important 20 years ago, and they’re still very important today,” Fredell says. “That’s one of the key things that has kept me in pharmacy benefit management and the broader space of managed care.”

Fredell says that a few years into his career, he had an opportunity to meet with clients about their pharmacy benefits, the associated expenditure and member experience.

“I gained a much deeper perspective of what our company and I get to do in terms of helping our clients provide the best pharmacy benefit they can for their members but also appreciate the many complex priorities each client has and is trying to keep well aligned.”

He said many clients are assessing their costs and how that influences their plans. He also pointed to several new CVS Health products to help clients identify savings in their pharmacy benefit.

One program, CVS CostVantage, will define the drug cost and related reimbursement using a formula built on the drug’s price, a set markup and a fee that reflects the care and value of pharmacy services. Starting this year, all prescriptions ordered by people covered by commercial insurers are dispensed through CostVantage, and company leaders have said they are working on a cost-based solution for the Medicare and Medicaid markets.

Another program, TrueCost, is a model that offers pricing that reflects the true net cost of prescription drugs, with visibility into administrative fees. Today, the company says 99% of rebates that CVS negotiates are passed through to clients, and TrueCost
will return savings to patients directly at the pharmacy counter.

“The majority of plans still want rebates if that is the only way to get to the lowest cost because at the end of the day, they are trying to provide the most affordable all-in benefit for themselves and for their members,” he says.

Technological innovation

CVS Caremark and the PBM industry, Fredell says, have led the way in advancing new technologies to make the pharmacy process more seamless. “Well over 90% of every single interaction at the pharmacy is somewhat seamless,” he says. “Someone goes in, and they get their medication at a very affordable price. In fact, today, I think the average one-month out-of-pocket cost for a medication is less than $8.”

For the remainder of transactions that include specialty or other high-cost drugs that may be subject to prior authorization or other utilization management, CVS is implementing technology to help “take the friction or the disruption out of that experience,” he says.

CVS has invested in technology to embed prior authorization and utilization management requirements from the plan into the electronic medical record (EMR). “We want a physician to know [about prior authorization] at the moment they’re thinking about prescribing therapy, and we can communicate that through the electronic medical record.”

Additionally, he says the technology can pull data from the EMR, saving physicians and their staff from the paperwork involved with prior authorization. CVS has invested in other technology that can access data from sources that assist with the prior authorization process.

“The data can already tell us whether this is an appropriate drug for the right person at the right time,” Fredell says. “Investments in technology like that can make the process more seamless and can help us know what’s going on right away, which means the patient has a better experience. And it means the pharmacy has a better experience.”

Fredell says that about 80% of the time, CVS Caremark can provide real-time information to prescribers via the EMR. And about 60% of the time, CVS Caremark has the right connectivity to pull information from the EMR to support clinical reviews of specialty medications.

Looking ahead, Fredell says artificial intelligence will help create a more seamless process, “making it easier for the average person to have an easy experience with the healthcare system and the pharmacy system. We’re seeing elements of that come into play, but you’ll see a broader sense of that in the market.”