CVS to revamp drug pricing model 

CVS Pharmacy is taking a cue from Mark Cuban Cost Plus Drugs and will launch a pharmacy reimbursement model built around a drug's cost, a pharmacy services fee and a set markup.

The new approach, CVS CostVantage, will define a drug's cost and related reimbursement for contracted pharmacy benefit managers and payers, according to a Dec. 5 news release from CVS. 

The new "cost plus" model will be available to consumers in 2024 and will incorporate PBM contracts with commercial payers in 2025, The Wall Street Journal reported Dec. 5. Government-sponsored health plans will be able to use the model in the future.

"We are leading with an approach that will shift how our retail pharmacy is compensated by implementing a more transparent and sustainable model that fairly aligns pharmacy reimbursement to the quality services we provide," Prem Shah, PharmD, executive vice president, chief pharmacy officer and president of pharmacy and consumer wellness at CVS, said in the release. "It provides our PBM and payer clients a foundational step towards more pricing clarity for consumers."

CVS Caremark is also launching TrueCost in 2025; it will be designed to offer client pricing that reflects the true net cost of prescription drugs, with visibility into administrative fees. 

The new drug pricing tools come as CVS rebrands its healthcare delivery services. The company launched CVS Healthspire, which encompasses Oak Street Health, Signify Health, MinuteClinics and PBM Caremark, on Dec. 5. CVS Healthspire will also include Cordavis, a newly created company that will support the production and commercialization of biosimilar drugs. CVS Healthspire plans to integrate services for more connected patient care along with pharmacy benefits.

In early 2024, Cigna's Express Scripts is launching ClearNetwork for Cigna members, which will price check the lowest acquisition cost of medications, and add a pharmacy dispensing fee and a markup of 15% or less. Cost Plus Drugs has a similar pricing formula, which includes a drug's manufacturing cost, a 15% markup, a $5 pharmacy labor fee and a $5 shipping fee. 

In early 2023, UnitedHealth Group's Optum Rx launched a new tool for its members to compare generic drugs' direct-to-consumer prices and receive the lowest available. In 2024, Elevance Health is launching CarelonRx Pharmacy, a digital and home delivery pharmacy subsidiary.


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