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      Helping enable a more transparent, simple health care system

      October 9, 2024 |3 minute read time

      At CVS Health®, we are building a world of health around consumers. As part of our commitment, we are reshaping the future of drug pricing, bringing greater transparency to the system while assuring important access to pharmacy services for Americans with our CVS CostVantage and TrueCost solutions. 

      CVS CostVantage

      Community pharmacies today do more than fill prescriptions. Patients rely on them now more than ever, and pharmacists can help fill the gap between provider visits.

      Pharmacists are local, accessible and one of the most trusted health care providers. In fact, in a recent survey, 90% of consumers said they trust their local pharmacist and pharmacy team, and nearly 1 in 3 Americans visit their pharmacy at least once per week—approximately twice as often as they visit their physician(s)*. The need for local, convenient care will only increase, especially as the U.S. population ages.

      Maintaining community pharmacy is critical. Specifically, the way community pharmacy is currently reimbursed for services doesn’t align to the underlying costs of doing business or the value delivered.

      It's time for a change. With CVS CostVantage, CVS Pharmacy® is helping to create a new sustainable community pharmacy model, bringing much needed transparency and simplicity to the system. CostVantage shifts how our pharmacy is compensated by payors by aligning pharmacy reimbursement to the quality services we provide and the prescriptions we dispense. Learn more about how it works and why it matters from Prem Shah, executive vice president and chief pharmacy officer, CVS Health® and president, Pharmacy and Consumer Wellness, in a piece published in Fierce Healthcare.

      This tool provides greater transparency for PBMs and payors and serve as a crucial building block for PBMs to create a more transparent model — like TrueCost.

      Learn more about CVS CostVantage


      Pharmacists are some of the most trusted health care providers, and Americans increasingly rely on the convenient and timely care they provide.


      That’s why it’s more critical than ever to keep our industry thriving.


      In the past, our pharmacy reimbursement model made sense.


      But health care is complex, and prices are rising.


      Pressures we face today outpace business growth, operational efficiencies, and improvements we’ve made in the costs of goods.


      It’s resulted in unprecedent declines in reimbursement for the prescriptions we fill.


      And today, as a health care provider, community pharmacy does more than fill prescriptions, and patients are increasingly turning to them to help fill gaps in care.


      Reimbursement is disconnected from the actual cost of goods and services.


      Simply put, the current model is unsustainable.


      The way pharmacies have historically been reimbursed for medications no longer supports the cost of doing business.


      It’s time for change.


      That’s why we introduced a simple, new reimbursement model leading the way to help improve long term viability of the pharmacy industry.


      CVS CostVantage™ will bring much needed transparency and sustainability to our pharmacy business and to the marketplace overall.


      Beginning in January 2025, CVS Pharmacy will use a transparent formula to define drug costs and related reimbursement with every PBM and payors we work with.


      We’ll base this formula on the underlying cost of the drug, plus a defined markup and a dispensing fee tied to the care and value we provide, helping to combat the need for higher rates on some medicines to help subsidize losses on others.


      The new model aims to support continued consumer access to affordable health care at our locations, help us continue to invest in our stores and colleagues, and accelerate the work being done by PBMs and their payors to create greater simplicity and transparency in their work with pharmacies.


      Because Americans in every community need a local pharmacy they can rely on.


      With more than 9,000 CVS Pharmacy locations, no one is better positioned to tackle one of the biggest challenges our nation faces while creating a more vibrant future for our business and industry.


      Together, we’re building a world of health around every consumer.

      TrueCost

      TrueCost is our PBM’s response to a rapidly changing landscape in the marketplace. We heard the call from our clients, from lawmakers, and from pharmacies — for greater pricing transparency, predictability and sustainability and we answered it.

      TrueCost is a breakthrough step forward for our PBM clients and members and will further supports affordability. Specifically:

      • Greater pricing transparency with drug level, multi-year net cost guarantees across all drugs
      • Continued reassurance that the price that members pay is more reflective of the pharmacies acquisition cost of the drug, when plan design allows
      • Keeping members on their benefit when they fill their prescriptions so they realize the value of their pharmacy benefit

      We’re excited about what TrueCost means for our customers, and most importantly the nearly 90 million Americans who get their pharmacy benefits through CVS Caremark®.

      Specifically, client pricing better reflects the net cost of prescription drugs, with a new level to drug specific rebate values — something clients asked for. And TrueCost enables a pharmacy reimbursement structure in which CVS Caremark is better positioned to reimburse pharmacies for drugs based on their acquisition costs, with dispensing fees that reflect the services they provide to their patients.

      Together, both CVS CostVantage and TrueCost bring greater transparency and clarity to a complex health care system and help pharmacy on the pathway to a more sustainable, transformative future that supports important access to pharmacy care.

      Learn more about TrueCost

       

      [Instrumental background music plays. Text description follows.]

      CVS Caremark.

      Bold new thinking about pharmacy pricing with CVS Caremark TrueCost

      For years, generics were used to offset the cost of more expensive brand-name drugs

      Today the marketplace is ready for 

      industry-shifting change

      TrueCost is reshaping the future of pricing

      for every drug

      every condition

      every plan member

      Providing deeper pricing transparency with drug level, multi-year net cost guarantees across all drugs

      Delivering simplicity that helps sustain economic predictability for clients 

      Bringing value that keeps members on benefit when filling their  prescriptions – without shopping around

      TrueCost brings transparency, simplicity, and value

      so members get the full value from their pharmacy benefit that you intend.

      CVS Caremark

      [Music fades, video ends.]

      • * FOR TWICE AS OFTEN AS THEY VISIT THEIR PHYSICIAN SOURCE: Berenbrok LA, Gabriel N, Coley KC, et. al. Evaluation of Frequency of Encounters With Primary Care Physicians vs Visits to Community Pharmacies Among Medicare Beneficiaries. JAMA Netw Open. 2020 Jul 1; 3(7):e209132.

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