- Programs & Services
Innovative Formulary Design
Regardless of what managed formulary payors are currently aligned with, there may be opportunity to build upon it to help maximize savings. A well designed formulary strategy helps ensure members have access to clinically appropriate products while providing clients financial value and savings through preferred placement for generics, rebates and price protection.
In 2012, we were the first pharmacy benefit manager (PBM) to remove certain high-cost drugs from our Standard Formulary and give preference to lower-cost, clinically appropriate alternatives leading to cost savings for clients. New-to-market drug evaluations introduced in 2015 provide day-one control and further helped reduce costs by adding clinical review of the drug to determine whether it delivers value over existing alternatives. Our Hyperinflation Management Program, introduced in 2017, targets specific drugs with excessive year-over-year price increases when there are clinically appropriate, cost-effective alternatives available. We were first in market to move to prioritize biosimilars on our formulary for categories where these lower-cost alternatives are available. To help control rising specialty drug costs, we have also introduced indication-based formularies that tie a drug’s pricing and rebates to the value it delivers.
Our managed formularies are designed to minimize member disruption. 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.
For 2018, we expect 99.76 percent of members will be able to stay on their current therapy. Our research shows that less than 1.5 percent of affected members dropped off therapy after implementation of a managed formulary.1 By contrast, there was a 2 percent improvement in adherence.
Managed Formulary Options
Our Standard Control Formulary offers the broadest coverage of generic, brand and specialty medications of our three formularies. Updates are made at the beginning of the year with potential quarterly exclusions for hyperinflation and specialty products. It offers savings of 1 to 2 percent on pharmacy spending.
Advanced Control Formulary covers select generics and brands and includes controls for specialty medications. Product and trend management strategies are updated quarterly. This formulary offers savings of up to 5 percent on pharmacy spending and an increase in generic dispensing of up to 1 percent.
Value Formulary covers most generics, and select brands, including specialty medications, with tier exceptions or higher copays for non-formulary brands. Drug list and management strategies are updated quarterly. Value Formulary can deliver pharmacy spend savings of up to 8 percent and an increase in generic dispensing of up to 5 percent or more.
In addition to our formulary management strategies, we are also announcing our new Transform Value program, which are designed to offer incremental benefit based on specific outcomes and cost cap-based management in key trend categories, including weight loss, oncology and respiratory conditions. The program will launch with oncology, obesity and respiratory conditions.
Considerations for your business
Are your current formulary strategies helping you control cost?
Are you effectively managing the impact of new high-cost drug launches and maximizing savings from lower cost generics?
Could you save more by refining your formulary strategy?
Have a question about our Formulary Management programs?
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. 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.
1. CVS Health Trade Finance, 2012 – 2017E