2018 Formulary Strategy

Targeted Management, Expanded Cost Control Options
Icon of prescription pill bottles and a dollar tag
August 1, 2017
Former Executive Vice President and Chief Medical Officer, CVS Health

From 2016 through 2025, health care spending is projected to grow 5.6 percent and prescription drug spending 6.3 percent annually — both at a rate higher than the Gross Domestic Product. Since 2012, when we first began removing certain drugs in favor of clinically appropriate, lower-cost alternatives, formulary management has been foundational to help clients mitigate the impact of rising drug costs.

Formulary Q1 2017 Post-rebate PMPM Cost

That continues today. For clients aligned with our Standard Control Formulary, first-quarter per-member-per-month (PMPM) cost was $85.90 compared to $121.12 for those with a Standard Opt-Out Formulary. Generic Dispensing Rate for Standard Control Formulary clients was 86.5 percent compared to 83.8 percent for those on Standard Opt-Out, which does not include formulary removals.*

Since 2012, when we introduced our industry-leading and rigorous approach to formulary management, through 2018, our formulary strategy is expected to deliver $13.4 billion in cumulative savings to pharmacy benefit management clients, through inclusion of lower-cost brands and transition to generics.** CVS Caremark is the largest pharmacy benefit manager in the country, in lives and claims, providing coverage to nearly 90 million plan members. Our range of managed commercial formularies, including Standard Control Formulary, cover more than 31 million members.

Formulary Q1 2017 Post-rebate PMPM Cost

Over the years, we have introduced several other innovative strategies to help mitigate the impact of brand drugs coming to market at ever higher prices and escalating costs for existing brand drugs. The latest advance in our cost management strategies are value-based initiatives, which enable much more precise and targeted formulary management by negotiating pricing for specific drugs and conditions rather than at a therapy class level. This helps ensure that reimbursement for a drug is aligned to the value and outcomes it delivers rather than a static, pre-set price.

Value-based management approaches can vary depending on the therapy class and drug. Such strategies include:

Indication-based pricing and rebates

Outcomes-based contracting

Cost cap-based contracting

Formulary Timeline
Formulary Timeline

2018 Standard Control Formulary Removals

CVS Health offers a range of formulary management options that help reduce pharmacy costs for clients and members, while ensuring clinical integrity and access. In addition to expanding our value-based initiatives, effective January 1, 2018 we expect to remove 17 products from our Standard Control Formulary in 10 drug classes.

We remove drugs only when clinically-appropriate, lower-cost (often generic) alternatives are available. Our targeted approach ensures minimum member disruption. For 2018, we estimate 99.76 percent of members will be able to stay on their current therapy. A proactive member and prescriber communication strategy helps members transition to clinically-appropriate medications, minimizing disruption. Every member’s journey is unique and that’s why we take a personalized approach to member outreach. Communications informed by data analysis and predictive modeling, enable us to concentrate our efforts where they are most needed. Our engagement strategies are grounded in research, and we know that better engagement helps improve outcomes as well as member satisfaction.

List of Removals and Updates

Below are the therapy classes with drug removals and updates for the 2018 Standard Control Formulary.

Class Products


Xtandi P


Incruse Ellipta P

Dermatology Tetracycline

Doryx/Doryx MPC, Monodox

Erectile Dysfunction

Levitra NP





Incretin Mimetics


Migraine Injectable

Sumavel Dosepro

Multi-Source Brands

Benicar/Benicar HCT, Effexor XR, Nuvigil,

Seroquel XR, Zetia

Multiple Sclerosis Agents

Avonex NP, Plegridy NP

Ophthalmic Allergies

Lastacaft P

Ophthalmic Prostaglandins

Lumigan P

Ophthalmic Steroids

FML* P, Pred Mild P

Opioid Dependence

Zubsolv P

PAH Endothelin Receptor Antagonishs

Opsumit P

Post-Herpetic Neuralgia


Sodium-Glucose Co-transporter 2 (SGLT2) Inhibitors and

Combination Products

Jardiance, Synjardy/Synjardy XR, Invokana P,

Invokamet/Invokamet XR P

Steroid Beta Agonists Combos

Dulera, Symbicort P

Transmucosal IR Fentanyl

Abstral NP

Testosterone Replacements

Androgel 1.62% P

Urinary Antispasmodics

Gelnique NP


Hyalgan, Synvisc/Synvisc One

Future Updates

The autoimmune class is a leading trend driver for commercial clients, due primarily to utilization and price. Many drugs are also obtaining a growing number of supplemental indications, making careful management of this therapeutic class critical to helping payors manage the financial impact. In addition, consistent with our policy, as a new specialty product launches all existing products in the class will be re-evaluated to determine appropriate formulary placement and potentially removed or added to formulary. New entrants are expected in the hepatitis C class.

We are in the process of finalizing changes for autoimmune and hepatitis C categories, which will be communicated mid-September.

Prescription drugs accounted for $323 billion in spending last year.1 In an era of increasing utilization, an aging population, and a trend of ever-growing brand drug prices, we are focused on developing solutions that help our clients control costs and stay ahead of market trends.
Prescription drugs accounted for $323 billion in spending last year.1 In an era of increasing utilization, an aging population, and a trend of ever-growing brand drug prices, we are focused on developing solutions that help our clients control costs and stay ahead of market trends.
Want to learn more about our 2018 formulary strategy or Transform Value Programs? Ask Us
August 1, 2017
Former Executive Vice President and Chief Medical Officer, CVS Health

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*CVS Health Enterprise Analytics, 2017. Trend data based on a CVS Health commercial PBM client - employer and health plan - cohort. Data not age-adjusted.
Savings and trend will vary based on a variety of factors, including demographics, plan design and programs adopted by the client. Client-specific modeling available upon request.

**CVS Health Finance, 2012 – 2018E. Projections based on CVS Caremark data. Individual results will vary based on plan design, formulary status, demographic characteristics and other factors. Client-specific modeling available upon request.

1. QuintilesIMS Institute Study: U.S. Drug Spending Growth of 4.8 Percent in 2016: https://www.quintilesims.com/press-releases/quintilesims-institute-study-us-drugspending-growth-of-48-percent-in-2016.

This document contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health.