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CVS Health Responds to Request for Information on Trump Administration's Blueprint to Lower Drug Prices

July 16, 2018 | Prescription Savings

Company underscores support for the Trump administration's goal and outlines steps it has taken to hold down drug costs for consumers

WOONSOCKET, R.I., July 16, 2018 /PRNewswire/ -- CVS Health (NYSE: CVS) today submitted its comments in response to the Request for Information (RFI) on the Trump administration's Blueprint to Lower Drug Prices. In a cover letter to Secretary of Health and Human Services (HHS) Alex Azar summarizing the full comments submitted to HHS, the company underscored support for the Trump administration's goals and emphasized the industry-leading steps it has taken to hold down drug costs and bring innovative solutions to market to help consumers.

"Until drug manufacturers reduce the high price they set for these drugs, we know this problem is not going away," the company said in the letter. "We support the [Trump] Administration's goal to lower drug prices and reduce out-of-pocket costs for consumers and we are using every innovative tool possible to bring down the cost of drugs ourselves."

The full text of CVS Health's cover letter to Secretary Azar follows here:

Secretary Alex M. Azar II
Department of Health and Human Services
200 Independence Ave. SW, Room 600E
Washington, DC 20201

Re: Response to the Health and Human Services Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs

Dear Secretary Azar:

CVS Health appreciates the opportunity to comment on the request for information included in the Health and Human Services (HHS) Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs published in the Federal Register, vol. 83, no. 95 (May 16, 2018).

CVS Health is a pharmacy innovation company helping people on their path to better health. Caremark, our pharmacy benefit manager (PBM) company, provides services to plans covering 12 million Medicare Part D beneficiaries, including SilverScript, our national Medicare Part D plan, which covers approximately 6 million beneficiaries. Through our more than 9,800 retail pharmacies, more than 1,100 walk-in medical clinics, dedicated senior pharmacy care business servicing more than one million patients per year, and expanding specialty pharmacy services, we enable people, businesses, and communities to manage health care in a more affordable, effective ways. Our unique integrated model increases access to quality care, delivers better health outcomes, and helps to lowers overall health care costs.

We see the impact rising drug prices have on our patients every day. Our pharmacists witness the sticker shock first hand as patients question the price of brand-name drugs, especially as prices have grown 10 times faster than inflation over the last five years. And until drug manufacturers reduce the high price they set for these drugs, we know this problem is not going away. We support the Trump administration's goal to lower drug prices and reduce out-of-pocket costs for consumers and we are using every innovative tool possible to bring down the cost of drugs ourselves.

Throughout our response to this request for information (RFI), it is clear that policy solutions that lower drug prices for health plans and consumers and reduce out-of-pocket costs are aligned with our goal of reducing healthcare costs and helping improve healthcare outcomes. One of the key roles of government is to provide a regulatory framework in which the private sector can innovate and bring cost-saving solutions to the marketplace. This means creating an environment that allows private sector tools to be used more effectively. The government's vision for the future should encourage modern tools and innovation from the private sector and CVS Health is proud to be a leader in this space.

As a pharmacy benefit manager, CVS Health negotiates the lowest possible cost from drug manufacturers for our clients, which are health plans, employers, unions, government programs like Medicare Part D and Medicaid, and ultimately for the millions of Americans who pick up their prescriptions at pharmacy counters every day. Even in an environment where the list prices of drugs are continually rising, we kept drug price growth at a minimal 0.2% in 2017, the lowest in five years, despite manufacturer brand list prices increases on drugs near 10%. Further, over 30% of our clients spent less per member in 2017 than they did in 2016 on prescription drug costs. We return over 95% of rebates to commercial clients and their members. For Medicare Part D plans, effectively 100% of the rebates are passed through to help lower premiums, which reduce costs for both the beneficiary and the government. The tools used by pharmacy benefit managers to remove costs from the health care system are projected to save $654 billion on drug costs over the next decade.Visante Inc., "Pharmacy Benefit Managers (PBMs): Generating Savings for Plan Sponsors and Consumers," Prepared for PCMA, February 2016,

Today, CVS Health provides availability of rebates at the point-of-sale as an option for all clients. In addition to helping consumers reduce out of pocket costs, this approach demonstrates the true cause of rising drug prices for consumers, which is the price set by pharmaceutical manufacturers. For consumers in high deductible health plans, the availability of point of sale rebates on their medications before their deductible is met, can be a key solution to help consumers stay adherent on their essential medications by making them affordable.

But we do not stop there. We are also using an innovative technology solution to bring real-time benefits information to the point of prescribing. Through their electronic health record system, prescribers are able to see member-specific out of pocket costs for a selected drug based on where they are at that moment in their deductible and up to five lowest-cost clinically appropriate therapeutic alternatives, specific to the member's formulary.

We have also brought this technology to the pharmacy counter. Our nearly 30,000 pharmacists utilize the Rx Savings Finder tool to quickly identify available savings opportunities when beneficiaries present their prescriptions. This tool is expected to produce an average of $420 in additional annual savings for the patient.

Our pharmacists are committed to helping patients find the most affordable options, and we ensure that pharmacists in our Caremark networks do the same. Accordingly, CVS Health does not engage in gag clauses, and we support efforts to ban them.

Despite our efforts to lower costs for consumers, we are working within a system where competition has been stalled, which hurts the consumer most. As you will see in our response, we believe increasing market competition by making more generics available is absolutely necessary to make a real impact. We are proud to have offered a generic epinephrine auto-injector at the lowest cash price in the market as a way to combat the exorbitant price increases in the brand drug, EpiPen. We are pleased to see the Food and Drug Administration's (FDA) efforts to speed approval of generic drug applications and to prioritize review of drugs with only one manufacturer to encourage competition. A fair playing field is not just about generics though, we must expand the use of biosimilars and eliminate the tactics that stall competition.

While we have provided responses to many of the questions posed in the RFI, there are four main areas we wish to highlight where the Trump administration can take immediate steps to help reduce costs for consumers. They include:

1) With more Americans now covered through a high deductible health plans with an associated health savings account (HSA), millions of consumers are seeing higher-out-of-pocket costs on the part of the benefit they use most their prescription drug coverage because they often do not have full prescription coverage until they have met their deductible. Under current Internal Revenue Service guidance for HSAs, only certain preventive products and services may be covered by a high deductible health plan prior to satisfaction of the minimum deductible. We urge you to expand coverage of preventive products and services to include products for managing chronic conditions, or to allow a high deductible health plan to cover drugs prior to satisfaction of the deductible. This would help these plans provide more first dollar coverage at the pharmacy counter, improve medication adherence and health outcomes and reduce sticker shock when consumers are filling their prescriptions. You can accomplish this immediately through the regulatory or guidance process.

2) As mentioned above, we have seen great results from prescribers accessing the real-time benefits information to the point of prescribing. Through the electronic health records system, providers are able to see the member-specific cost for a selected drug, based on a member's coverage, along with alternative options based on the patient's formulary. For prescriptions written by physicians using real time benefits and filled by the member; when a lower-cost preferred alternative is presented, physicians are switching to the lower cost alternative 40% of the time. In these cases the member cost was $130 lower per fill, compared to the original non-preferred drug selected. Physicians who are using real time benefits are switching to a covered drug 75% of the time when the original drug is not covered. We would encourage the Trump administration to use every regulatory tool at your disposal to incentivize the adoption of point of prescribing real time benefit information. This would save patients a significant amount of money.

3) Competition among brand drugs and generics are important in lowering drug costs. The increasing use of biosimilars will bring competition into biopharmaceutical market. The Trump administration should seek to increase competition in the drug marketplace through FDA's actions as soon as possible. More must be done to make generics available, including expanding the use of biosimilars, and eliminating tactics that stall competition. To increase the availability of biosimilars, we believe the Trump administration should support shortening the exclusivity period for biologics from twelve to seven years, and finalize interchangeability guidance, which is key to expanding adoption of these lower cost alternatives. By prohibiting pay-for-delay agreements, the Trump administration can curb anti-competitive practices and help bring lower cost, clinically-equivalent generic medications to market more quickly. CVS Health also firmly supports the bipartisan CREATES Act to stop the abuse of Risk Evaluation and Mitigation Strategies, which costs the health care system $5.4 billion annually by keeping generics from entering the market. We would encourage the Trump administration to also support the CREATES Act.

4) Finally, we support the Trump administration's proposals to strengthen negotiating tools in Part D, including by providing greater formulary flexibility, which will help build upon the program's successful record of delivering affordable drug benefits to seniors at a cost far less than originally projected.

We appreciate the opportunity to provide comments on the HHS Blueprint, and we welcome opportunities to work with the Trump administration to lower drug prices and reduce out-of-pocket costs for consumers.

Media Contact:

Erin Shields Britt, Corporate Communications
(401) 770-9237