CVS Caremark study: Focus on Rx adherence saved PBM clients $2.4B in 2011

WOONSOCKET, R.I. — CVS Caremark has aggressively set its sights on enhancing medication adherence, and the initiatives are paying off as the company estimates that its PBM clients saved nearly $2.4 billion in 2011 because of improved medication adherence for chronic conditions, according to findings of its annual Insights Report.

The report, released on Wednesday, reviews drug trend and highlights key issues in pharmacy care. 

The report also found that, in 2011, the drug trend for the company's PBM employer clients (2.1%) and health plan clients (2.2%) represented the company's lowest recorded trend for the past seven years.

"Over the past several years, CVS Caremark has conducted research on the causes and impact of medication nonadherence, and we know that taking medications for chronic diseases as directed keeps patients healthier and helps avoid extra costs associated with nonadherence," stated Troyen Brennan, EVP and chief medical officer of CVS Caremark. "Based on our research, we have implemented programs to help our customers and members improve their adherence, and in 2011, the results of these programs increased optimal adherence rates for our clients, resulting in nearly $2.4 billion in overall healthcare savings across our book of business."

"Last year, even consumers with insurance continued to feel the impact of a sluggish economic recovery and responded by rationing their healthcare spending, resulting in relatively flat utilization of pharmacy services," added Per Lofberg, president of CVS Caremark's PBM business. "As a company focused on helping people on their path to better health, we worked closely with our clients to find opportunities to control costs through formulary management and increased utilization of generic drugs while also continuing to promote programs to improve medication adherence and keep members healthy."

During 2011, the generic dispensing rate for the company's book of business grew to 74.1% because of the combination of a stream of patent expirations for blockbuster branded drugs and the company's implementation of formulary and plan design strategies to encourage the use of cost-effective generic drugs.

Another trend driver in 2011 was continued growth in the utilization of complex specialty pharmaceuticals. CVS Caremark's book of business analysis showed that while specialty drugs may make up as little as 2.5% of a payer's total prescriptions, they can add up to 31% of overall pharmacy spend. Over the next few years, the impact of specialty medications on pharmacy spend will continue to grow as more specialty drugs enter the market and higher cost per unit prices continue. In 2011, specialty drug trend ranged from 16.5% for employer clients to 19.1% for our health plan clients.

Drug price also was one of the largest drivers of trend in 2011 for CVS Caremark commercial clients, with average wholesale price per day trend showing price increases across both specialty and nonspecialty branded drugs. In fact, since 2007, brand-drug price inflation has increased 27%, the company stated. CVS Caremark noted that it takes these types of market developments into account when developing its formulary and plan design strategies, which promote the use of generic drugs whenever possible and provide for the appropriate use of single-source brand drugs when necessary. CVS Caremark stated that it works with clients to address the impact of price and drug mix by implementing narrower formularies, dispense-as-written penalties and step therapy plan designs to help promote the use of clinically appropriate and cost-effective medications.

The cost savings because of improved adherence was calculated using the company's pharmacy care economic model, which enables CVS Caremark to calculate the financial value of improved pharmacy care by taking a holistic approach and reviewing adherence, gaps in care and use of generic alternatives. The company's pharmacy care programs, such as Pharmacy Advisor for diabetes, are succeeding in moving a significant portion of PBM members to optimal levels of medication adherence. The savings calculated using the PCEM are because of medical cost avoidance, drug cost savings and productivity loss avoidance.

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