2021 CVS Caremark Formulary Updates

Delivering Value and Quality Care

BRIEFING
October 1, 2020
Vice President, Product Development, CVS Health

An effective formulary strategy is the cornerstone of cost containment and it is more important than ever now, as payors try to save money to offset the financial impact of the COVID-19 pandemic, while also continuing to benefits to their employees.

As always, the focus of our formulary strategy remains on delivering value and quality care — helping clients save money while ensuring members have access to clinically appropriate medications. We also remain focused on keeping member costs low so they can afford their medications. We expect the changes effective January 1, 2021 to save $4.4 billion — $130 per member — for clients aligned to our template formularies.

$4.4B client savings $130 savings per member
99.6% of members will not experience any changes from formulary removals effective January 1, 2021

Legacy of Innovation

We have a long history of pioneering innovating strategies to help clients stay ahead of market trends:

  • Formulary removals
  • New-to-market evaluations
  • Indication-based strategy
  • Hyperinflation management
  • Outcomes-based strategy
  • Quarterly review and/or update
  • Formulary Removals
  • New-to-market evaluations
  • Indication-based strategy
  • Hyperinflation management
  • Outcomes-based strategy
  • Quarterly review and/or update

Industry Leading Performance

Such ongoing innovations in formulary strategies have helped keep client costs low. In 2019, we helped clients achieve the lowest overall trend in five years — an industry leading 1.4 percent — despite increasing utilization and ongoing price inflation. In fact, 41 percent of clients had negative trend. Specialty trend was reduced to single digits — 9.3 percent — and even lower — 8.9 percent — for clients that tightly managed specialty.

Our formulary strategies helped mitigate the impact of rising prices, and increases in utilization to deliver net price growth of just -0.1 percent on non-specialty medications and merely 1.6 percent on specialty. We also removed 56 drugs as part of our comprehensive hyperinflation strategy for overall savings of $390.8 million for clients aligned to our template formularies.CVS Health Book of Business, Commercial Clients enrolled in managed template formularies: Q2-Q4 2019. Enterprise Analytics, April 2020.

Not only will the formulary changes being implemented for next year save clients $4.4 billion, they will do so without having any impact on an overwhelming majority of members. Of the more than 34 million members covered through CVS Caremark template formularies, 99.6 percent will not experience any changes from the formulary removals.

2021 Standard Control Formulary Changes*

The changes we are making effective January 1, 2021 will help ensure our formulary strategies remain the most impactful tool for clients seeking to better manage costs.

Checkmark 57 drugs removed; six drugs added back**
Checkmark One drug added to Tier 1 strategy
Checkmark Tier 1 strategy expected to continue saving 39% on average per claim
Checkmark Changing covered diabetes test strips is expected to save more than 10%
Checkmark Only about 0.4% of members will be affected by formulary removals

Ensuring Member Access, Cost Savings

During this difficult time, as always, our formulary decisions are based not only on saving money for clients but helping ensure members have affordable access to clinically appropriate medications.

Only about 0.4 percent of members will experience any changes from the formulary removals for 2021. We are implementing a prior use exemption, which means the change in covered diabetes test strips will not affect any members. Members affected by the other formulary removals, as well as their prescribers, will receive advance notice of any medications they take that may no longer be covered, and provided with clinically appropriate formulary options.

Want to learn how innovative formulary strategies can help lower cost for your plan? Ask Us
BRIEFING
October 1, 2020
Vice President, Product Development, CVS Health

*Changes for Standard Control Formulary, Advanced Control Formulary, Balanced Formulary and Value Formulary, where applicable.

**Numbers may change with quarterly review and update.

All data sharing complies with applicable law, our information firewall and any applicable contractual limitations. Savings projections are based on Q1 2020 CVS Caremark data. Actual results may vary depending on benefit plan design, member demographics, programs implemented by the plan and other factors.

Removals and add backs as of January 1, 2021. Information accurate as of the production date; however, it is subject to change.

This page contains trademarks or registered trademarks of CVS Pharmacy, Inc. and/or one of its affiliates.

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

Image source: Licensed from Getty Images, 2020.

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