More on Compliance & Legal

CVS Health issues report to prove it kept get drug price inflation nearly flat

Company releases new report about costs of medications on the heels of a lawsuit.

Susan Morse, Senior Editor

While CVS Health's pharmacy benefit manager is facing accusations of keeping prescription spread pricing profits, the company has announced that it has held drug price inflation nearly flat for its pharmacy benefit management clients.

Drug price growth was a minimal 0.2 percent, despite manufacturer price inflation near 10 percent, CVS Health said.

[Also: Aetna whistleblower accuses CVS Health's Caremark of fraud in Medicare Part D drug prices]

Much of this has been accomplished through the promotion of generic alternatives to members, providers and pharmacists. 

The generic dispensing rate for CVS Health PBM clients was above 86 percent in 2017. 

But CVS Health was also able to rein in price inflation for specialty drugs, it said. Manufacturer-driven price inflation for specialty drugs measured 8.3 percent in 2017, while it kept specialty drug cost growth to 3.7 percent for clients. This was achieved through effective formulary strategies, indication- and outcomes-based contracting and cost-cap based rebates, according to the 2017 Drug Trend Report.  For clients aligned with the company's managed formularies, drug price growth actually declined by 0.1 percent in 2017.

These efforts combined with low drug utilization growth of 1.7 percent, reduced the drug trend for commercial clients to 1.9 percent, the lowest level in five years, according to CVS Health. 

For members, out-of-pocket costs declined even as adherence improved. Forty-two percent of CVS Health commercial PBM clients spent less on their pharmacy benefit plan in 2017 than they had in 2016.

PBM strategies include having preventive drug lists with zero dollar copays for generics that help reduce costs for high utilization categories, such as antihypertensives and cholesterol-reducing drugs. 

"At CVS Health, we always encourage the use of clinically appropriate therapeutic alternatives including generics, which can lower cost for payers and members, leverage competition within drug classes where applicable, and develop innovative strategies to keep prescriptions affordable," said Jon Roberts, executive vice president and chief operating officer, CVS Health.

CVS Caremark provides to physicians real-time, member-specific drug costs and lower-cost alternatives through the electronic health record system and to patients through a member portal and newly updated app. 

A CVS pharmacy Rx savings finder enables the company's retail pharmacists to evaluate a member's prescription regimen, the medication history and insurance plan information. 

The ExtraCare loyalty program allows members to sign up to receive $5 in ExtraBucks for every 10 prescriptions filled, earning up to $50 in ExtraBucks annually.

A point of sale rebate program has been in place since 2013.

"Until now, patients haven't had the appropriate tools available to help them manage these costs," said Thomas Moriarty, chief policy and external affairs officer for CVS Health. "To address this, CVS Health is giving expanded tools to patients, prescribers and pharmacists so they can evaluate prescription drug coverage in real-time and identify lower-cost alternatives."

In the lawsuit against CVS Health's Caremark, filed in 2014 but only recently unsealed, an Aetna actuary accused the PBM of billing the government for prescription drugs at a higher price than it pays to pharmacies. 

Caremark also did not disclose to Aetna how much it was being paid by the pharmacies, nor that it was pocketing the difference in a practice known as spread-pricing, according to the lawsuit.

Caremark responded that it had negotiated lower prices on Aetna's behalf but was not required under the contract to provide these prices to Aetna, according to the complaint. 

CVS Health has denied any allegations of wrongdoing and said it believes the complaint is without merit. CVS Health complies with all applicable laws and regulations of Medicare Part D, the company said.

Twitter: @SusanJMorse
Email the writer:

Show All Comments