PBM clients see 2016 spend fall despite rising Rx prices
CVS said Wednesday that CVS Caremark clients saw their prescription drug trend fall to an average of 3.2% last year versus 5% in 2015. Of CVS Caremark commercial clients, 38% achieved a negative trend, spending less on their prescription benefit in 2016 than in 2015, despite rising drug prices, the company noted. Members’ out-of-pocket costs also declined 3% year over year.
For 2016, the unmanaged drug trend came in at 11%, fueled mainly by price inflation for branded specialty and traditional drugs along with higher utilization because of an aging population, CVS reported. The company said it reduced the CVS Caremark drug trend for clients by 7.8 percentage points to 3.2% via PBM management solutions such as price protection and the negotiation of rebates, of which more than 90% are passed back to clients.
In addition, CVS said its PBM encouraged the use of less expensive generic drugs through managed formularies and applied targeted approaches to address high-spend drivers like hyper-inflating drugs.
On average, clients who chose the CVS Caremark standard managed formulary achieved a drug trend of 2.2%, compared with 4.5% for clients who used a custom formulary and opted out of drug removals, according to the company. Clients who selected the generic-focused value formulary had the highest generic dispensing rate (GDR), at 88.2%, and the lowest baseline cost, at $81.86 per member per month.
“No one is more concerned about the high cost of prescription drugs than CVS Health,” Troyen Brennan, executive vice president and chief medical officer at CVS Health, said in a statement. “Our very favorable drug trend results for 2016 demonstrate that we have been able to deliver best-in-class value to clients and their members.”
Overall drug price inflation, despite being lower in 2016, represented nearly 80% of PBM clients’ unmanaged drug trend, CVS noted. The impact of inflation on specialty branded drugs continued to climb relative to traditional branded medications, while specialty products overall grew to almost 36% of total gross spend, the company said.
Three of the top five categories contributing to gross trend were specialty drug categories, including anti-inflammatory drugs for rheumatoid arthritis and psoriasis; antineoplastics and adjunctive therapies to treat cancer; and psychotherapeutic and neurological agents, including multiple sclerosis therapies.
Growth in generic drug use helped keep costs low for CVS Caremark members and clients, driving a 3.5 point overall cost reduction for clients, CVS added.
Prescription drug trend is the measure of growth in prescription spending per member per month. CVS said the trend calculations reflect the effects of drug price, drug utilization and the mix of branded versus generic drugs, plus the positive effect of negotiated rebates on overall trend. The company said the 2016 trend performance is based on a cohort of CVS Health PBM commercial clients, including employers and health plans.