Formulary Management

Helping Lower Client Cost While Ensuring Members Have Access to Clinically Appropriate Medications.

Formulary management is the cornerstone of cost containment. Payors who are currently aligned to a broad formulary without exclusions could find significant savings opportunities by adopting a narrower formulary.

We have been a leader in formulary management with a rich history of innovations ranging from drug removals to new-to-market blocks to indication-based strategies, all of which have become the standard for PBMs. Since then, we have used formulary management and preferred placement to negotiate better pricing and greater discounts to reduce costs for payors when clinically equivalent alternatives are available.

Clients aligned to our template formularies are expected to save $4.3 billion in 2023.

Optionality means clients can choose what works for them

Our innovative formulary strategy offers clients choices that help achieve comparable lower net cost while balancing member experience.

  • Clients who prefer to achieve lower net cost driven primarily through rebates when appropriate and applicable can choose "Choice Formularies," a new formulary strategy retaining a higher rebated product approach in certain classes. See how Choice Formularies provides lower net cost while balancing
    member experience.
  • Alternatively, by remaining aligned to one of our existing core template formularies, clients can achieve lower net cost through lower list price product strategies when appropriate and applicable. This approach helps increase affordability for members who have deductibles and coinsurance. These strategies have lower available manufacturer rebates and will lead to adjustments to rebate guarantees.

Core template formularies

Clients aligned to our Standard Control Formulary (SCF) have realized much greater savings than clients who have opted for a broad formulary with no drug exclusions, as SCF covers all generics and most brand drugs. However, moving beyond SCF and aligning to a more tightly managed formulary, such as Advanced Control Formulary (ACF) or Value Formulary (VF), could help deliver significantly greater savings.

Want to learn how our solutions can help amplify your cost management? Contact us
Want to learn how our solutions can help amplify your cost management?
Contact us

Standard Control Formulary

Our Standard Control Formulary offers the broadest coverage of generics and most brands, including specialty medications. Updates are made at the beginning of the year with potential quarterly removals for hyperinflation and specialty products.

Advanced Control Formulary

Advanced Control Formulary delivers greater savings while promoting cost-effective care and generic utilization driven by tighter controls. It covers select generics and brands. Utilization management (UM) programs for specialty treatments are included along with the appropriate plan design for greater savings.

Advanced Control Specialty Formulary

Advanced Control Specialty Formulary (ACSF) incorporates multiple strategies for a proactive approach to managing specialty costs. This includes Specialty Guideline Management (SGM) to help ensure clinical appropriateness, drug safety, and effectiveness. It targets specialty drug classes that may be experiencing significant growth in number of drugs available or drug cost; and utilizes quarterly auto-updates to address shifts in the rapidly changing market, including tier changes and new-to-market products. ACSF promotes generics first to increase utilization of lower-cost, clinically appropriate options where available.

Value Formulary

Value Formulary covers most generics and select brands across all disease states. It represents our most progressive approach to drug coverage for our commercial clients and delivers significant savings by prioritizing generic utilization across all disease states. It combines a closely managed drug list and an array of utilization management strategies — including step therapy, prior authorization, and quantity limits — across therapeutic classes, including classes largely managed with specialty medications. The components that make up VF will continue to be mandatory, including UM, SGM, and a medical exceptions process.

Effective formulary management strategies help clients manage costs and ensure members have coverage for clinically appropriate medications.

Introducing Choice Formularies

  • Standard Control Choice is an option for clients who prefer to achieve lower net cost, driven primarily through rebates when appropriate and applicable. Standard Control Choice utilizes drug removals, focuses on clinically appropriate medications through targeted drug class evaluation; and retains a higher rebated product approach in certain classes.
  • Advanced Control Choice enables clients to manage costs through aggressive clinical controls and restrictive plan design requirements. Advanced Control Specialty Formulary is integrated into the Advanced Control Choice Formulary to help clients manage this high-focus area of spend. This includes exclusion strategies, SGM with our Generics First program, and indication-based coverage in specific drug classes.

Want to learn how our formulary strategies can help manage costs? Ask Us

Projections based on CVS Caremark data. Savings results will vary based on a variety of factors including demographics, plan design and other programs implemented by the client. Client-specific modeling available upon request.

All our formulary offerings are based on careful clinical evaluation of therapeutic options and are designed to help deliver lowest net cost while helping ensure that members have access to the medications they need.

Unless otherwise noted, all data is sourced from CVS Health Enterprise Analytics.

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