White Paper: Current and New Approaches to Making Drugs More Affordable

Pill bottle with ScriptPath prescription label
August 8, 2018
Former Executive Vice President and Chief Medical Officer, CVS Health

In recent months, the debate about drug pricing has become one about rebates negotiated by pharmacy benefit managers (PBMs) on behalf of payors to help control costs. Manufacturers claim that rising drug costs are a result of higher rebates and that PBMs profit from drug price inflation because they retain the rebates. This is simply not true. High drug prices have no correlation to rebates.
Manufacturers, and no one else, set drug prices. A new CVS Health white paper “Current and New Approaches to Making Drugs More Affordable” busts the myths behind rebates and drug prices.
The white paper also highlights the comprehensive efforts CVS Health and our PBM, CVS Caremark, have made to help keep payor costs low. While PBM techniques have helped keep costs in check, manufacturers use the exclusivity granted by patents to launch drugs at high prices. They also use coupons and direct-to-consumer advertising to build brand loyalty to high-cost brand drugs and then push list prices higher.
That’s why additional innovations are necessary to help bring escalating drug prices and costs under control. In this white paper, we provide greater details on existing cost-control tools and introduce some innovations that can further reduce costs for payors, and our health care system.

The most important thing CVS Caremark can do for PBM clients is to help ensure people take their medications — doing so improves overall health and lowers cost. But to accomplish this, medications must be affordable. The techniques we have used to this point are based on evaluating the comparative effectiveness of various medications based on clinical evidence and using market techniques to ensure the lowest possible cost. The innovations proposed in this white paper build on that base of clinical evidence and health care economics to address key aspects of the drug cost crisis including transparency, member out-of-pocket share, and high launch prices.

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Want to learn about innovative strategies that can help lower costs for your plan and members? Ask Us
August 8, 2018
Former Executive Vice President and Chief Medical Officer, CVS Health

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