PBM stifles Rx drug cost growth


: Proactive pharma tools help CVS manage pharmacy costs and focus on ensuring patients have access to the right drugs at the lowest cost.

One PBM is tempering the impact of rising drug costs in today’s unsettled prescription drug market, pointing to what it calls “unique” approaches to managing costs as the key driver of its success.

Although trend drivers-including brand, specialty and generic price inflation-were similar to what was seen in 2014, CVS Health PBM prescription drug trend dropped greatly to 5% in 2015 from a high of 11.8% in 2014.

Rising prices for brand-name, specialty and generic drugs continued to drive trend in 2015, but price inflation for non-specialty, brand-name drugs outweighed all other trend drivers, including specialty drugs, according to CVS Caremark

This inflation impact is largely because of double-digit price increases for high-volume drugs in categories such as the antidiabetics, according CVS Caremark. In addition, dermatological drugs, anti-diabetics and anti-inflammatories were substantial contributors to rising pharmacy costs overall.

Specialty pharmacy continued to be an important driver of pharmacy spending in 2015 due to ongoing launches of new products and increasing utilization and prices for existing products.

Despite trend drivers similar to those seen in 2014, CVS Caremark was able to manage costs for its PBM clients.

Managed care executives should be aware of these approaches applied by CVS Caremark, including:

• Industry-leading purchasing strategies that leverage CVS’ scale to negotiate discounts and rebates from drug manufacturers to ensure that clients can provide their members with access to the medications they need at a price they can afford.

• Encouraging use of medically equivalent, but significantly less-expensive, generics over costly brand-name drugs. Today, 85% of the drugs CVS Caremark dispenses are highly effective and less-expensive generic medications, according to the company. 

• Offering a variety of formulary options (standard, advanced, value) that help deliver lower costs for clients while ensuring their members have access to the medications they need. On average, CVS Caremark clients utilizing the company’s value formulary in 2015 saved $20 million or more depending on the number of plan members they support.

Next: A different take



Medical Economist Robert Goldberg, PhD, vice president and cofounder, Center for Medicine in the Public Interest, has a different take on what might be helping CVS manage drug costs.


“The decline in drug costs is a result of the increased success of PBMs extracting rebates and denying access,” Goldberg says. 

Goldberg points to a Credit Suisse analyst report that says: “For 2014, our 20 company universe has shown net U.S. drug sales of $202 billion and reported total rebates of $98 billion. We conclude that in 2014 U.S. rebates rose 24% against just a 7% increase in net sales, reflecting continued formulary pressures.”

“This means that 2015 was a great year for PBMs because it was worse for patients,” Goldberg says.

Moving forward, CVS Health will offer additional integrated solutions and real-time data analytics on drug trend drivers to offer the best solutions to manage healthcare costs and ensure patients have access to appropriate affordable medications, according to the company.

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