The PBM side of CVS
By Clive Riddle, April 6, 2018
Assuming the
CVS acquisition of Aetna clears all final hurdles, perhaps the
most attention given to the merged company is in respect to the retail
synergies. But the CVS Caremark PBM also deserves considerable
attention. After all,
Cigna’s big merger recently announced with Express Scripts
was purely a PBM play.
With that in mind, its interesting to poke through the just released
14-page
CVS Health Drug Trend Report 2017. Similar to
Express Scripts previously released 2017 report, the CVS Health
report was certainly positive, and they touted that drug prices for
clients rose “at a minimal
0.2 percent, despite manufacturer price inflation near 10 percent.”
But it must be noted that the touted 0.2 percent increase was just for
prices. There was 1.7% cost growth due to utilization, yielding a total
pmpy drug trend in 2017 of 1.9%, still quite a positive trend.
Here is additional data CVS shared about their client experience in
2017:
·
While CVS drug price growth was 0.2%,
the manufacturer AWP inflation rates were 9.2& for traditional brands,
8.3% for specialty brands, and 0.4% for generics.
·
The CVS generic dispensing rate was
86.1%.
·
CVS traditional and specialty brands
accounted for 14% of prescriptions dispensed, but 69% of pharmaceutical
spend.
·
The CVS specialty trend consisted of
3.7% price growth plus 9.2% utilization cost growth for a total 12.9%
2017 specialty trend.
·
CVS gross client costs pmpm were
108.42 pmpm in 2017 compared to $104.10 in 2016.
·
For CVS Clients with managed
formularies, costs were $88.94 pmpm compared to $87.43 pmpm in 2016.
·
The managed formulary differential in
overall drug trend for 2017 resulted in a 1.7% trend with managed
formulary clients compared to 4.2% trend for other clients.
·
42 percent of CVS Health commercial
PBM clients spent less on their pharmacy benefit plan in 2017 than they
had in 2016.
·
For clients aligned with the company's
managed formularies, drug price declined by 0.1 percent, in 2017, as
compared to the overall 0.2 percent drug price growth.
·
Member out of pocket costs pmpm
declined from $11.99 in 2016 to $11.89 in 2017.
·
In 2017 24% of members had zero out of
pocket costs (no claims), 49.4% of members had out of pocket costs under
$100, 14.6% had out of pocket costs between $100-$299, 5% had out of
pocket costs between $300 - $499, 4.3% between $500-$599 and 2.7% above
$1,000. |
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