As prescription drug list prices continue to rise, the cost burden on patients remains a significant concern. Despite this trend, CVS Caremark® members pay an average of just $7.26 out of pocket for a 30-day supply of medication — a testament to the company’s commitment to affordability.
A Strategic, Multi-Faceted Approach to Managing Drug Costs
Pharmacy benefit managers (PBMs) like CVS Caremark play a critical role in making medications accessible and affordable. As the PBM serving nearly 90 million Americans, CVS Caremark employs a comprehensive strategy to ensure that members receive the medications they need without excessive financial strain.
With the pharmaceutical pipeline now brimming with innovative treatments — some targeting rare or previously untreatable conditions — affordability becomes more essential than ever. However, high prices, especially for brand-name drugs, continue to pose challenges for many patients.
The Reality of Rising Drug Prices
Between 2019 and 2023, wholesale acquisition costs (WACs) — the list prices set by manufacturers — rose at a compounded annual growth rate (CAGR) of 7.6%. Forecasts predict continued increases of 6% to 9% annually through 2028. Notably, in 2020-2021, 47% of newly launched drugs were priced at $150,000 or more per year.
In response, CVS Caremark has taken innovative steps to counteract the impact of rising list prices and help lower out-of-pocket costs for members.
A 36.3% Decrease in Member Out-of-Pocket Costs (2016–2023)*
Over the past seven years, CVS Caremark has reduced member out-of-pocket costs by 36.3%, thanks to strategic innovations beyond traditional methods like drug manufacturer rebates. These include:
1. Addressing Hyperinflated Drugs
CVS Caremark actively monitors for drugs with unjustified price hikes. These hyperinflated medications can be removed from formularies, while ensuring that members have access to equally effective, clinically appropriate alternatives.
2. Real-Time Benefits Integration
Empowering providers with cost transparency is crucial. With Real-Time Benefits, over 50% of providers can now view their patients’ medication costs directly within their electronic health record (EHR) systems. This enables informed decision-making at the point of care and helps patients avoid unexpected costs.
3. Biosimilars: A Major Cost-Saving Opportunity
Biosimilars — clinically equivalent alternatives to expensive specialty medications — offer savings of up to 80%. CVS Caremark has led the way by removing Humira from major formularies in favor of biosimilar options. The result? A 96% adoption rate for Humira biosimilars among members, compared to a 23% market average for the top 10 biosimilars. This shift has generated $1.5 billion in savings, with 85% of members paying $0 out-of-pocket.
