Cost Management

Prescription drug sales are expected to reach $1.4 trillion in 2026.https://www.evaluate.com/thought-leadership/pharma/evaluatepharma-world-preview-2020-outlook-2026 Given the impact of the COVID-19 pandemic on many businesses, payors are looking for ways to control health care costs and effective prescription cost management has never been more critical. We know that the pharmaceutical marketplace is increasingly complex and managing spend can be a challenge for payors seeking to continue offering sustainable health benefits to their employees while keeping costs low, especially as availability of specialty medications expands.

Our comprehensive approach helps contain cost at every step of the process by ensuring appropriate utilization.

We continue to actively monitor the growing pipeline of new specialty drugs and expanding indications, as well as ongoing drug price inflation. For the most effective way to manage prescription drug spend, there are two big areas of opportunity: when plan members begin therapy and across the duration of therapy for members already on a prescription treatment. We bring the integrated resources, including our reach, experience and expertise to helping deliver the lowest unit cost.

In 2021, CVS Health pharmacy benefit management (PBM) strategies helped keep payor trend in the low single digits — 3.6 percent — and 35 percent of our PBM clients had negative trend, below zero percent. Specialty pharmaceuticals remain the key management challenge, dominating the pipeline and spurring utilization growth, yet we kept specialty trend in the single digits through a number of focused strategies, including holding unit price growth to 1.2 percent.

Our integrated approach to delivering cost savings for clients comprises of strategies that complement each other, and are the highest level of clinical integrity to:

	Make sure members get coverage for appropriate medications from the start to protect you against the high costs of therapy.
	Eliminate waste throughout by ensuring appropriate utilization.
	Proactively intervene when needed and appropriate.

Start therapy with certainty

Effective formulary management is the cornerstone of cost control and this begins with using our expertise and scale to deliver lowest unit cost. Our industry-leading formulary strategies include drug removals and new-to-market evaluations for recently launched drugs allowing for careful assessment of the drug’s potential value in the context of the overall category and market.

Our template formularies are designed to maximize cost savings for clients. With chronic conditions, they have helped drive negative trend. Our strategies continued to help blunt the impact of price inflation as evidenced by the significant difference in trend and per member per month costs for managed clients compared to unmanaged ones. 

We help enable clients to eliminate wasteful spend on high-cost drugs that did not demonstrate a clear clinical benefit by developing and implementing strategies to ensure the appropriate use of drugs through utilization management (UM).

In addition to negotiating discounts from manufacturers on behalf of our clients, we use our industry-leading formulary strategies — including preferred placement and drug exclusions — to encourage use of lower-cost and generic options. Through UM options such as drug utilization review, new-to-market strategy, and specialty guideline management, we help ensure that members are getting the right drug at the right time.

As more high-cost gene therapies come to market, and with many more in the pipeline, we have also designed and implemented programs for our clients that can help mitigate the cost impact of gene therapies and ensure better access to appropriate ones. Our various approaches help payors mitigate what could be a detrimental impact from a large one-time cost for gene therapy treatment for one or a few members.

Eliminate waste throughout therapy

Our focus continues to be on developing — and evolving — strategies that help our PBM clients stay ahead of the changes. Hyperinflated drug removals, ongoing monitoring of data, and utilization and specialty guideline management are some of the flexible strategies to help blunt the impact of drugs that are significantly more expensive than available alternatives in the category. 

Managed networks can help both lower costs and improve outcomes, eliminate waste throughout and maintain high rates of member satisfaction.

The latest enhancements to network strategies can offer payors a range of benefits. Networks designed to meet the specific geographic location and access needs of a plan’s population can help maximize cost savings while maintaining the right level of access. Nearly 37 million CVS Health commercial pharmacy benefit members are in plans that have adopted a managed network. Such pharmacy networks help ensure members have access to the medications they need to stay healthy, while helping control costs for clients and minimizing disruption.

Intervene when needed 

Initiating specific, timely interventions can improve medication therapies while controlling client costs. Drug Savings Review uses evidence-based clinical standards to identify member-specific interventions that lead to improved drug therapies and client savings. Our clinical guidelines are reviewed and updated quarterly. We conduct regular retrospective reviews and send recommendations to prescribers with supporting rationale to enable any appropriate therapy change prior to members obtaining their first refill, to avoid disruption.

Clients that adopt Drug Savings Review may save up to 1.24 percent annually and a guaranteed 3:1 return on their investment.

Later this year new interventions will be added to Drug Savings Review with a particular focus on specialty drugs to generate additional savings for clients. 

Our cost management strategies work to keep costs in check while helping ensure members maintain access to clinically appropriate medications to stay on their path to better health.

Want to learn more about how we can help manage cost for members? Ask Us