“Over the last three years, even as drug prices have increased by 25%, CVS Caremark has helped our clients save more than $141 billion by blunting drug price inflation, prioritizing the use of effective, lower-cost drugs and reducing the member’s out-of-pocket spend,” said Derica Rice, president, CVS Caremark, the PBM business of CVS Health. “Moreover, our focused adherence efforts have helped more members take their drugs as prescribed, which we estimate has saved our clients an additional $18.3 billion in avoided medical costs since 2016.”
Impact of Formulary Management
Managed formularies enable CVS Caremark to take advantage of market competition on behalf of its PBM clients and promote the use of effective, lower cost drugs. In fact, in 2018, clients that adopted the managed formularies offered by the Company saw savings of nearly 14% per 30-day prescription, even as drug price inflation, while slightly moderated, grew four times faster than overall inflation.
Managing Overall Spend for Diabetes and Making Insulin More Affordable
Rising costs for the treatment of diabetes continue to challenge payors and patients, but strategic management of the antidiabetic category helped CVS Caremark control overall spend. In 2018, trend for antidiabetic drugs was negative -1.7%, despite increasing utilization and brand price inflation of 5.6 percent.
Formulary management strategies also played a key role in helping keep insulin costs affordable for payors and consumers. In 2017, CVS Caremark led the market in taking steps to blunt the impact of branded insulin price increases by making the less expensive long-acting insulin Basaglar, the preferred drug on the formulary. This formulary change resulted in member out-of-pocket costs declining by nine percent, improved A1C levels, and savings for payors.
Improving Medication Adherence and Reducing Consumers Out-of-Pocket Costs
Despite the growth of high deductible plan designs, CVS Caremark’s programs and solutions helped reduce out-of-pocket costs for consumers for the sixth straight year. In fact, two out of every three CVS Caremark members who used their prescription benefit in 2018 spent less than $100 on their prescriptions and more than 85 percent spent less than $300. In addition, although medical costs have grown 14 percent since 2013, over that time period CVS Caremark members paid 8.4 percent less for a 30 day prescription.
Containing Ever Increasing Costs for Specialty Drugs
The utilization and share of gross cost for specialty drugs continues to grow — reaching 45 percent of total pharmacy spend in 2018, as compared to 42% in 2017 — despite comprising only one percent of prescription claims overall. In 2018, although manufacturer-driven price inflation for specialty drugs measured 7.6%, CVS Caremark was able to keep specialty drug price growth at just 1.7 % for clients. This was achieved through a tightly managed approach including effective formulary strategies, indication- and outcomes-based contracting, and utilization management to guide safe and appropriate use for patients dealing with complex and often debilitating conditions.
Prescription drug trend is the measure of growth in prescription spending per member per month. Trend calculations take into account the effects of drug price, drug utilization, and the mix of branded versus generic drugs as well as the positive effect of negotiated discounts and rebates on overall trend. The 2018 trend performance is based on a cohort of CVS Health commercial PBM clients employers and health plans.
To learn more about the CVS Caremark 2018 drug trend.