CVS, one of the biggest pharmacy chains in the U.S., is planning to overhaul how it prices prescription drugs.
CVS said Tuesday that it’s changing the way it reimburses its pharmacies for prescription medicine, which could simplify pricing and change the way you pay for your medicine.
CVS said its new model will bring more transparency to drug pricing, by using a simpler formula that includes the drug cost, a markup and a fee to determine the drug’s price and reimbursement with pharmacy benefit managers. Currently, the price you pay is heavily dependent on “pharmacy benefit managers,” which negotiate rebates from drug makers to health insurers, not factoring in what pharmacies spend to buy the drugs.
The new model is expected to launch for commercial payors in 2025.
“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,” said Prem Shah, PharmD, executive vice president, Chief Pharmacy Officer and President, Pharmacy and Consumer Wellness, CVS Health. “It provides our PBM and payor clients a foundational step towards more pricing clarity for consumers.”
The new models could alter the cost of prescription drugs for some people, but it’s hard to say which ones will increase and which ones will be cheaper. CVS said more should be cheaper than pricier for consumers, employers and insurance companies.
“Simplified pricing will help consumers be confident that their pharmacy benefit is providing the best possible price and will allow members to have stable access to our national pharmacy network,” CVS said in a statement.