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CVS Health retains pharmacy services with Service Benefit Plan, adds specialty pharmacy care

With specialty reintegrated into the pharmacy services, the goal is to deliver cost savings for Service Benefit Plan members.

Jeff Lagasse, Associate Editor

(Photo courtesy of CVS Health)(Photo courtesy of CVS Health)

CVS Caremark, the pharmacy benefit manager of CVS, is entering into a larger PBM contract with the Government-wide Service Benefit Plan, otherwise known as the Federal Employee Program. CVS Health has been the pharmacy benefit manager for the Service Benefit Plan, which has provided benefits to the federal workforce, since 1993.

The new contract, which will be effective on January 1, 2022, allows CVS Health to regain the specialty pharmacy business it lost in 2018, and retain other services such as mail and retail. With specialty reintegrated into the pharmacy services, the goal is to deliver cost savings for Service Benefit Plan members, CVS said.

More than 700 Service Benefit Plan-dedicated colleagues in CVS Caremark are poised to leverage the agreement.


Specialty medications are a critical and growing area of pharmacy spend, and effectively managing those drug costs, while ensuring improved member outcomes, requires a comprehensive approach spanning all aspects of pharmacy management.  

Specialty conditions are complex, making patient support and clinical engagement a core component of specialty management in order to ensure a good match between patient and therapy.

In this instance, the integrated management of specialty and traditional pharmacy services essentially means CVS Health can help the Service Benefit Plan manage spend by cutting cost and waste.


Pharmacy benefit managers are a uniquely American concept, acting as third-party administrators of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans and state government employee plans. Some feel that they operate with a lack of transparency.

On the surface, PBMs are tasked with maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims.

But they've been dogged by controversy. In 2019, the Centers for Medicare and Medicaid Services took aim at PBM spread pricing practices that it said result in an upcharge to Medicaid and CHIP-managed care plans, as well as higher costs for states and taxpayers.

Spread pricing occurs when health plans contract with a pharmacy benefit manager to manage their prescription drug benefits, and PBMs keep a portion of the amount paid to them by the health plans for prescription drugs, instead of passing the full payments on to pharmacies. 

The spread is the amount between what the health plan pays the PBM and the amount the PBM reimburses the pharmacy for a beneficiary's prescription. If spread pricing is not appropriately monitored and accounted for, a PBM can profit from charging health plans an excess amount above what is paid to the pharmacy dispensing a drug, CMS said.

CVS Health has been active of late. In February, it teamed with Lyft, the YMCA and other nonprofit partners to address inequities related to COVID-19 vaccine access in vulnerable communities, with a particular focus on Black and Hispanic populations. 

In March, CVS Health expanded the number of locations that are offering COVID-19 vaccines, nearly doubling the number of states where eligible patients can receive shots through the health giant.

Through the Federal Retail Pharmacy Program, the company is now administering vaccines in roughly 1,200 stores across 29 states and Puerto Rico.

Twitter: @JELagasse
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