CVS Will Rely on ICER Data as It Seeks to Curb Costs, Implement "Zero-Dollar Drug List"

CVS Health recently released a white paper that announced that its pharmacy benefit manager (PBM), CVS Caremark, will utilize techniques employed by other PBMs in an attempt to curb the cost of drugs.

“Our responsibility to our clients is to help ensure plan members take appropriate, cost-effective medications that improve health outcomes and lower overall medical costs. If price reductions by pharmaceutical manufacturers can help bring down drug costs, then we are in favor of it,” read the white paper. It went on to say that, “if only a few manufacturers make such reductions, it may only affect a few medications."

Click here to read more about recent formulary changes.

The plan outlined 3 specific efforts CVS Caremark has implemented: encouraging the use of lower-cost alternatives through step therapy, using prior authorization, and using competition to determine which drugs will be listed on formulary when there is more than 1 clinically equivalent drug available. Provided as an example for how the PBM has attempted to lower the cost of drugs, the white paper pointed to CVS’ coverage of a follow-on insulin, Basaglar, under its Standard Formulary, chosen over the reference Lantus. “Moving all users to Basaglar would lead to savings of more than $30 million per year,” it said.

Now, CVS will also begin to employ 3 new strategies: assisting patients in the deductible phase of their insurance, addressing the launch price of new medications, and emphasizing transparency so that members and their pharmacists can understand the true cost of a prescribed medication.

Furthermore, CVS stated that if clients employ point-of-sale rebates and follow the CVS Caremark Standard Formulary, it will be able to implement “a zero-dollar drug list” for chronic conditions such as diabetes, hypertension, hyperlipidemia, asthma and COPD, and depression.

However, under this program, CVS Caremark will “allow clients to exclude any drug launched at a price greater than $100,000 per quality-adjusted life year (QALY) from their plan.” The QALY ratio is determined based on public analyses from the Institute for Clinical and Economic Review (ICER). Additionally, the plan notes, “Medications deemed ‘breakthrough’ therapies by the [FDA] will be excluded from this program, which will focus on expensive, ‘me-too’ medications that are not cost effective.”

ICER has historically had a tense relationship with the pharmaceutical industry, as the organization is known for drawing attention to the high cost of drugs. This is notably the first time to date that ICER is playing a formal role in coverage decisions. Industry groups such as the Academy of Managed Care Pharmacy and the National Pharmaceutical Council have spoken out about the methods and motives behind ICER’s evaluations.

The unveiling of this program from CVS came just a week after CMS announced that it will allow Medicare Advantage plans to negotiate drug prices for physician-administered programs and other Part B drugs by allowing plans to use step therapy for newly diagnosed patients.