All commercial prescriptions dispensed at CVS
Pharmacy will be reimbursed through CVS CostVantage starting
this year
Innovative approach uses a transparent formula
built on the drug acquisition cost, a set markup, and a fee to
reflect the quality of pharmacy services provided
New reimbursement model supports future of
retail pharmacy and paves the way for improved PBM
transparency
WOONSOCKET, R.I.,
Jan. 6,
2025 /PRNewswire/ -- Delivering on the promise of a
simpler, more transparent, and more sustainable approach to retail
pharmacy services, CVS Health® (NYSE: CVS) today announced that all
of the commercial prescriptions dispensed through CVS Pharmacy® are
contracted through the company's innovative CVS CostVantage
reimbursement model starting this year.
"Delivering on our commitment to transform the pharmacy model,
we successfully led the way forward, contracting with pharmacy
benefit managers and other payors to advance a more transparent
approach to reimbursement for the prescriptions we dispense and the
services we provide," said Prem
Shah, group president, CVS Health. "In our discussions and
negotiations, we found common ground and a commitment to a simpler
approach to reimbursement and a more sustainable path forward for
retail pharmacy. As the leading pharmacy in America, we take our
responsibility seriously to continually improve and advocate for
community pharmacy. We will also continue to move forward in our
work to eventually expand CVS CostVantage to Medicare and Medicaid
managed prescriptions as well."
CVS CostVantage
Community pharmacies today do more than fill prescriptions.
Patients rely on pharmacists to 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, 81% of
consumers said they trust their local pharmacist, and 88% believe
their pharmacists are the most accessible and frequently visited
health care providers. Nearly 1 in 3 Americans visit their pharmacy
at least once per week—approximately twice as often as they
visit their physician(s)*.
Continuing to maintain community pharmacy is important. The way
community pharmacies have historically been reimbursed for services
has not fully reflected the value delivered or the underlying costs
of doing business.
By removing the market reliance on cross-subsidization caused by
market basket approaches to reimbursement, CVS CostVantage provides
more clarity, ensuring that CVS Pharmacy has a way of pricing and
contracting that reflects the reality of today's marketplace and
anticipates the future.
The CVS CostVantage formula is based on the underlying cost of a
drug plus a defined markup and a dispensing fee tied to the care
and value we provide. This approach helps reduce the need for
higher rates on some medicines to help subsidize losses on
others.
Beyond resetting the approach for drug reimbursement at the
pharmacy level, CVS CostVantage also helps provide greater
transparency for PBMs and payors and serves as a crucial building
block for PBMs to create simpler, more transparent models for plan
sponsors and patients.
About CVS Health
CVS Health® is a leading health solutions company building a
world of health around every consumer it serves and connecting care
so that it works for people wherever they are. As of September 30, 2024, the Company had more than
9,000 retail locations, more than 900 walk-in medical clinics, more
than 225 primary care medical clinics, a leading pharmacy benefits
manager with approximately 90 million plan members and expanding
specialty pharmacy solutions, and a dedicated senior pharmacy care
business serving more than 800,000 patients per year. The Company
also serves an estimated more than 36 million people through
traditional, voluntary and consumer-directed health insurance
products and related services, including expanding Medicare
Advantage offerings and a leading standalone Medicare Part D
prescription drug plan. The Company is creating new sources of
value through its integrated model allowing it to expand into
personalized, technology driven care delivery and health services,
increasing access to quality care, delivering better health
outcomes and lowering overall health care costs.
Media contact
Amy
Thibault
401-318-2865
Amy.Thibault@CVSHealth.com
* 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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SOURCE CVS Health