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CVS Health PBM Clients Achieved Lowest Prescription Drug Trend in Four Years, Despite Rising Drug Prices

March 15, 2017 | Pbm

CVS Caremark's PBM management solutions helped reduce drug trend from 5.0 percent in 2015 to just 3.2 percent in 2016

Member out-of-pocket costs dropped 3.0 percent

WOONSOCKET, R.I., March 15, 2017 /PRNewswire/ -- CVS Health (NYSE: CVS) today announced that, in 2016, its pharmacy benefit management (PBM) clients achieved the lowest drug trend in the past four years, despite rising drug prices. CVS Caremark clients saw their prescription drug trend drop to an average of 3.2 percent compared to 5.0 percent in 2015. In addition, 38 percent of CVS Caremark commercial clients achieved a negative trend which means they actually spent less on their prescription benefit in 2016 than they did in 2015, despite rising drug prices. Out-of-pocket costs for members also dropped 3.0 percent compared to the previous year.

"No one is more concerned about the high cost of prescription drugs than CVS Health," said Troyen Brennan, M.D., Executive Vice President and Chief Medical Officer, CVS Health. "Our very favorable drug trend results for 2016 demonstrate that we have been able to deliver best-in-class value to clients and their members."

Unmanaged drug trend for 2016 was 11.0 percent, driven primarily by price inflation for branded specialty and traditional drugs, as well as increased utilization due to an aging population. CVS Caremark was able to reduce trend for clients by 7.8 percentage points to 3.2 percent through PBM management solutions that include price protection and the negotiation of rebates, of which more than 90 percent are passed back to clients. CVS Caremark also encouraged the use of less expensive generic drugs through managed formularies and applied targeted approaches to addressing high-spend drivers such as hyper-inflating drugs. On average, clients who selected the CVS Caremark standard managed formulary achieved a trend of 2.2 percent, which was less than half the trend of 4.5 percent for clients who used a custom formulary and opted out of drug removals. Additionally, clients who chose our generic-focused value formulary had the highest generic dispensing rate (GDR) at 88.2 percent and the lowest baseline cost at $81.86 per member per month.

Although overall drug price inflation was lower in 2016, it still accounted for almost 80 percent of the unmanaged trend. The relative impact of inflation on specialty branded products continued to increase relative to traditional branded medications. At the same time, overall specialty products grew to nearly 36 percent of overall gross spend. Three of the top five categories contributing to gross trend were specialty drug categories, including anti-inflammatory medications for rheumatoid arthritis and psoriasis; antineoplastics and adjunctive therapies used to treat cancer; and psychotherapeutic and neurological agents, including multiple sclerosis therapies. Meanwhile, generic utilization growth kept costs low for members as well as clients and drove a 3.5 point overall cost reduction for clients.

CVS Caremark offers a variety of solutions, including flexible formulary options based on clinical evidence, to help manage pharmacy costs while ensuring patients have access to the medications they need. In addition, CVS Caremark's strategic assessment of the pharmaceutical marketplace enables the company to negotiate aggressive rebates and help to lower costs for clients. More than 90 percent of brand manufacturer contracts also include price protection, a critical element in protecting clients in a market characterized by significant drug price increases.

Prescription drug trend is the measure of growth in prescription spending per member per month. Trend calculations take into account the effects of drug price, drug utilization and the mix of branded versus generic drugs as well as the positive effect of negotiated rebates on overall trend. The 2016 trend performance is based on a cohort of CVS Health PBM commercial clients employers and health plans.

To learn more about the CVS Caremark 2016 drug trend, click here.

About CVS Health

CVS Health is a pharmacy innovation company helping people on their path to better health. Through its more than 9,700 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with nearly 90 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year, expanding specialty pharmacy services, and a leading stand-alone Medicare Part D prescription drug plan, the company enables people, businesses and communities to manage health in more affordable and effective ways. This unique integrated model increases access to quality care, delivers better health outcomes and lowers overall health care costs. Find more information about how CVS Health is shaping the future of health at

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