CVS Pharmacy achieves CVS CostVantage milestone
CVS Health has announced that all commercial prescriptions at CVS Pharmacy will now be reimbursed through their new CVS CostVantage model starting this year. This innovative reimbursement approach uses a transparent formula based on drug acquisition cost, a set markup, and a service fee reflecting pharmacy service quality.
The model aims to transform pharmacy reimbursement by removing market reliance on cross-subsidization and providing greater clarity in pricing. According to recent survey data, 81% of consumers trust their local pharmacist, and 88% view pharmacists as their most accessible healthcare providers, with nearly 1 in 3 Americans visiting pharmacies weekly—twice as often as physician visits.
The initiative represents a strategic shift towards more sustainable retail pharmacy services, with plans to eventually expand to Medicare and Medicaid managed prescriptions. This new approach helps reduce the need for higher rates on some medicines to subsidize losses on others, while providing enhanced transparency for PBMs and payors.
CVS Health ha annunciato che tutte le prescrizioni commerciali presso CVS Pharmacy saranno ora rimborsate tramite il loro nuovo modello CVS CostVantage, a partire da quest'anno. Questo approccio innovativo al rimborso utilizza una formula trasparente basata sul costo di acquisizione dei farmaci, un ricarico fisso e una tassa di servizio che riflette la qualità del servizio farmaceutico.
Il modello mira a trasformare il rimborso farmaceutico rimuovendo la dipendenza del mercato dalla sovvenzione incrociata e fornendo maggiore chiarezza nei prezzi. Secondo dati recenti di un sondaggio, l'81% dei consumatori si fida del proprio farmacista locale e l'88% considera i farmacisti come i propri fornitori di assistenza sanitaria più accessibili, con quasi 1 americano su 3 che visita le farmacie settimanalmente, il doppio rispetto alle visite dai medici.
Questa iniziativa rappresenta un cambiamento strategico verso servizi di farmacia al dettaglio più sostenibili, con l'intenzione di espandersi eventualmenta a prescrizioni gestite da Medicare e Medicaid. Questo nuovo approccio contribuisce a ridurre la necessità di tassi più elevati su alcuni farmaci per sovvenzionare le perdite su altri, fornendo al contempo maggiore trasparenza per le PBM e i pagatori.
CVS Health ha anunciado que todas las recetas comerciales en CVS Pharmacy serán reembolsadas a través de su nuevo modelo CVS CostVantage, comenzando este año. Este enfoque innovador de reembolso utiliza una fórmula transparente basada en el costo de adquisición de medicamentos, un margen establecido y una tarifa de servicio que refleja la calidad del servicio farmacéutico.
El modelo tiene como objetivo transformar el reembolso de farmacias al eliminar la dependencia del mercado en la subvención cruzada y proporcionar una mayor claridad en la fijación de precios. Según datos recientes de encuestas, el 81% de los consumidores confía en su farmacéutico local, y el 88% considera a los farmacéuticos como sus proveedores de atención médica más accesibles, con casi 1 de cada 3 estadounidenses visitando farmacias semanalmente, el doble de las visitas al médico.
La iniciativa representa un cambio estratégico hacia servicios de farmacia minorista más sostenibles, con planes de expandirse eventualmente a los medicamentos gestionados por Medicare y Medicaid. Este nuevo enfoque ayuda a reducir la necesidad de tarifas más altas en algunos medicamentos para subsidiar las pérdidas en otros, al mismo tiempo que proporciona una mayor transparencia para las PBM y los pagadores.
CVS Health는 올해부터 CVS Pharmacy에서 모든 상업 처방전이 새로운 CVS CostVantage 모델을 통해 환급된다고 발표했습니다. 이 혁신적인 환급 접근 방식은 약물 구매 비용, 일정 마진 및 약국 서비스 품질을 반영하는 서비스 요금을 기반으로 한 투명한 공식을 사용합니다.
이 모델은 시장의 교차 보조금 의존성을 제거하고 가격에 대한 더 큰 명확성을 제공함으로써 약국 환급을 혁신하는 것을 목표로 합니다. 최근 설문 조사 데이터에 따르면, 소비자의 81%가 지역 약사에게 신뢰를 느끼고, 88%는 약사를 가장 접근 가능한 의료 제공자로 여기며, 거의 3명 중 1명이 매주 약국을 방문하는 것으로 나타났습니다. 이는 의사 방문의 두 배입니다.
이 이니셔티브는 보다 지속 가능한 소매 약국 서비스로의 전략적 전환을 나타내며, 궁극적으로 Medicare와 Medicaid 관리 처방으로 확장할 계획입니다. 이 새로운 접근 방식은 일부 약물의 높은 요금이 다른 약물의 손실을 보전하는 필요성을 줄이는 데 도움을 주며, PBM 및 지급자에게 더 큰 투명성을 제공합니다.
CVS Health a annoncé que toutes les prescriptions commerciales chez CVS Pharmacy seront désormais remboursées par le biais de leur nouveau modèle CVS CostVantage à partir de cette année. Cette approche de remboursement innovante utilise une formule transparente basée sur le coût d'acquisition des médicaments, une marge fixe et une frais de service reflétant la qualité du service pharmaceutique.
Ce modèle vise à transformer le remboursement des pharmacies en supprimant la dépendance du marché à la subvention croisée et en fournissant plus de clarté dans la tarification. Selon les données récentes d'une enquête, 81 % des consommateurs font confiance à leur pharmacien local, et 88 % voient les pharmaciens comme leurs prestataires de soins de santé les plus accessibles, avec près d'1 Américain sur 3 visitant les pharmacies chaque semaine, soit deux fois plus que les visites chez le médecin.
L'initiative représente un changement stratégique vers des services pharmaceutiques de détail plus durables, avec des plans pour éventuellement s'étendre aux prescriptions gérées par Medicare et Medicaid. Cette nouvelle approche aide à réduire la nécessité de taux plus élevés sur certains médicaments pour subventionner les pertes sur d'autres, tout en offrant une transparence accrue pour les PBM et les payeurs.
CVS Health hat angekündigt, dass alle kommerziellen Rezepte in der CVS Apotheke ab diesem Jahr über ihr neues CVS CostVantage-Modell erstattet werden. Dieser innovative Erstattungsansatz verwendet eine transparente Formel, die auf den Beschaffungskosten für Medikamente, einer festgelegten Marge und einer Servicegebühr basiert, die die Qualität der Apothekendienstleistungen widerspiegelt.
Das Modell zielt darauf ab, die Erstattung für Apotheken zu transformieren, indem die Abhängigkeit des Marktes von Quersubventionierung beseitigt und mehr Klarheit in der Preisgestaltung geschaffen wird. Laut aktuellen Umfragedaten vertrauen 81 % der Verbraucher ihrem lokalen Apotheker, und 88 % betrachten Apotheker als ihre am besten erreichbaren Gesundheitsdienstleister, wobei fast 1 von 3 Amerikanern wöchentlich Apotheken besucht - doppelt so oft wie Arztbesuche.
Die Initiative stellt einen strategischen Wandel hin zu nachhaltigeren Einzelhandelsapothekendienstleistungen dar, mit dem Ziel, letztendlich auf von Medicare und Medicaid verwaltete Rezepte auszuweiten. Dieser neue Ansatz hilft, die Notwendigkeit höherer Preise für einige Medikamente zu verringern, um Verluste auf andere zu subventionieren, während er gleichzeitig die Transparenz für PBMs und Kostenträger erhöht.
- Implementation of transparent pricing model reducing cross-subsidization
- Strong consumer trust metrics with 81% trust rate and 88% accessibility rating
- Planned expansion to Medicare and Medicaid prescriptions
- Enhanced transparency for PBMs and payors
- None.
Insights
CVS Health's implementation of CVS CostVantage marks a transformative shift in pharmacy reimbursement that could significantly impact the company's financial performance. The new model, based on drug acquisition cost plus markup and service fees, eliminates the traditional cross-subsidization approach, potentially leading to more stable and predictable revenue streams.
This strategic move addresses a critical industry pain point - the unsustainable nature of current pharmacy reimbursement models. By implementing a transparent formula, CVS is positioning itself to better capture the true value of its pharmacy services while potentially improving gross margins. The expansion plans into Medicare and Medicaid segments could further amplify the financial impact, considering these programs represent substantial revenue portions.
The timing is particularly strategic as it coincides with increased scrutiny of PBM practices and calls for greater transparency in drug pricing. This proactive approach could help CVS maintain its competitive advantage while adapting to potential regulatory changes in the healthcare sector.
The introduction of CVS CostVantage represents a paradigm shift in pharmacy reimbursement policy that could reshape the entire retail pharmacy landscape. This model addresses long-standing criticism about PBM pricing opacity and could set a new industry standard for transparency.
The model's structure - combining drug cost, markup and service fees - acknowledges the evolving role of pharmacists as healthcare providers, not just medication dispensers. The timing aligns with broader healthcare policy trends toward value-based care and increased transparency. The planned expansion into Medicare and Medicaid programs signals potential systemic changes in how pharmacy services are valued and reimbursed across the healthcare spectrum.
For investors, this initiative demonstrates CVS's ability to lead industry innovation while adapting to regulatory pressures for greater transparency in healthcare pricing.
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,
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
FAQ
What is CVS CostVantage and how does it work?
When will CVS CostVantage be implemented for commercial prescriptions?
Will CVS CostVantage expand to Medicare and Medicaid prescriptions?
How does CVS CostVantage benefit pharmacy customers?
What percentage of consumers trust their local CVS pharmacist?
