WOONSOCKET, R.I. — CVS Health’s pharmacy benefits management clients achieved the lowest drug trend in the past four years, despite rising drug prices. CVS Caremark clients saw their prescription drug trend drop to an average of 3.2% compared to 5.0% in 2015, according to the company. In addition, 38% of CVS Caremark commercial clients achieved a negative trend, which means they actually spent less on their prescription benefit in 2016 than they did in 2015, despite rising drug prices. Out-of-pocket costs for members also dropped 3.0% compared to the previous year.
"No one is more concerned about the high cost of prescription drugs than CVS Health," said Troyen Brennan, M.D., EVP and Chief Medical Officer, CVS Health. "Our very favorable drug trend results for 2016 demonstrate that we have been able to deliver best-in-class value to clients and their members."
Unmanaged drug trend for 2016 was 11.0%, driven primarily by price inflation for branded specialty and traditional drugs, as well as increased utilization due to an aging population. CVS Caremark was able to reduce trend for clients by 7.8 percentage points to 3.2% through PBM management solutions that include price protection and the negotiation of rebates, of which more than 90 percent are passed back to clients. CVS Caremark also encouraged the use of less expensive generic drugs through managed formularies and applied targeted approaches to addressing high-spend drivers such as hyper-inflating drugs. On average, clients who selected the CVS Caremark standard managed formulary achieved a trend of 2.2%, which was less than half the trend of 4.5% for clients who used a custom formulary and opted out of drug removals. Additionally, clients who chose our generic-focused value formulary had the highest generic dispensing rate at 88.2% and the lowest baseline cost at $81.86 per member per month.
Although overall drug price inflation was lower in 2016, it still accounted for almost 80% of the unmanaged trend, stated CVS. The relative impact of inflation on specialty branded products continued to increase relative to traditional branded medications. At the same time, overall specialty products grew to nearly 36% of overall gross spend. Three of the top five categories contributing to gross trend were specialty drug categories, including anti-inflammatory medications for rheumatoid arthritis and psoriasis; antineoplastics and adjunctive therapies used to treat cancer; and psychotherapeutic and neurological agents, including multiple sclerosis therapies. Meanwhile, generic utilization growth kept costs low for members as well as clients and drove a 3.5 point overall cost reduction for clients.