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CVS’ Merlo talks health care with governors

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CVS Health president and CEO Larry Merlo recently shared his insights on health care with the nation’s governors.

At the National Governors Association 2017 summer meeting in Providence, R.I., Merlo explained how elements of CVS’ integrated model — with retail/long-term care pharmacy, pharmacy benefits management and walk-in clinic unit — could be applied within states to enable more accessible, cost-effective health care. He spoke with more than 30 governors at the event.

Larry Merlo_CVS Health

CVS Health’s Larry Merlo

“We know the difficulties you face in delivering more value to patients and taxpayers,” Merlo said.

He outlined three ways that pharmacy management could help improve care and mitigate health care spending in states, starting with reining in prescription drug costs. Pointing to the impact of rising drug prices on Medicaid and state budgets, he cited a recent Menges Group report finding that greater use of PBM tools in Medicaid could save federal and state governments $51 billion over 10 years.

“Because pharmacy management and medication utilization play such important roles in reducing prescription drug costs and the total cost of care,” “pharmacy benefit management programs should be included in all state-managed care programs,” Merlo explained.

Improved management of chronic diseases would go a long way in controlling health care costs as well, according to Merlo. He noted that almost half of all Americans have one or more chronic conditions, accounting for 86% of health care spending. As a result, better coordination of care and medication management for chronic patients could pare spending by about $300 billion per year, he said.

“Pharmacy care plays a critical role in managing chronic disease in a more affordable and effective way,” Merlo said. “Think about it: Most patients interact far more frequently with their pharmacist than their physician, and research published in Health Affairs has shown that one-on-one counseling between a patient and a pharmacist results in improved medication adherence and cost savings of $3 for every $1 invested.”

Encouraging patients to choose alternatives to the emergency room for primary care presents another cost reduction opportunity, Merlo said, explaining that retail clinics like CVS MinuteClinic provide the same or better health outcomes and cost 80% less than the emergency room.

And continued efforts to fight the opioid epidemic can help lessen drug abuse’s economic and social impact, Merlo noted. The Centers for Disease Control and Prevention estimates the health and social costs from opioid abuse at $55 billion annually, he said, adding that the issue has no simple fixes.

CVS’ efforts to battle opioid abuse include education and awareness programs, working with states to broaden access to the opioid overdose antidote naloxone, and partnering with local law enforcement on safe disposal of unwanted medications.

“Pharmacies can also play an important role in helping ensure appropriate access to pain medications while assuring patient safety. Electronic prescribing, or e-prescribing, for controlled substances has proven to be effective in reducing drug diversion and fraud,” Merlo said.

Earlier this month, CVS partnered with Rhode Island Gov. Gina Raimondo to establish a new Opioid Center of Excellence providing medication-assisted treatment and outpatient services, Merlo said. And at the National Governors Association meeting, he met with Richard Baum, acting director of the Office of National Drug Control Policy, to discuss how CVS is helping prevent opioid abuse.


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