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鈥攖wice 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 qualit脿 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 pi霉 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 pi霉 sostenibili, con l'intenzione di espandersi eventualmenta a prescrizioni gestite da Medicare e Medicaid. Questo nuovo approccio contribuisce a ridurre la necessit脿 di tassi pi霉 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 ser谩n reembolsadas a trav茅s de su nuevo modelo CVS CostVantage, comenzando este a帽o. Este enfoque innovador de reembolso utiliza una f贸rmula transparente basada en el costo de adquisici贸n de medicamentos, un margen establecido y una tarifa de servicio que refleja la calidad del servicio farmac茅utico.
El modelo tiene como objetivo transformar el reembolso de farmacias al eliminar la dependencia del mercado en la subvenci贸n cruzada y proporcionar una mayor claridad en la fijaci贸n de precios. Seg煤n datos recientes de encuestas, el 81% de los consumidores conf铆a en su farmac茅utico local, y el 88% considera a los farmac茅uticos como sus proveedores de atenci贸n m茅dica m谩s accesibles, con casi 1 de cada 3 estadounidenses visitando farmacias semanalmente, el doble de las visitas al m茅dico.
La iniciativa representa un cambio estrat茅gico hacia servicios de farmacia minorista m谩s sostenibles, con planes de expandirse eventualmente a los medicamentos gestionados por Medicare y Medicaid. Este nuevo enfoque ayuda a reducir la necesidad de tarifas m谩s altas en algunos medicamentos para subsidiar las p茅rdidas en otros, al mismo tiempo que proporciona una mayor transparencia para las PBM y los pagadores.
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CVS Health a annonc茅 que toutes les prescriptions commerciales chez CVS Pharmacy seront d茅sormais rembours茅es par le biais de leur nouveau mod猫le CVS CostVantage 脿 partir de cette ann茅e. Cette approche de remboursement innovante utilise une formule transparente bas茅e sur le co没t d'acquisition des m茅dicaments, une marge fixe et une frais de service refl茅tant la qualit茅 du service pharmaceutique.
Ce mod猫le vise 脿 transformer le remboursement des pharmacies en supprimant la d茅pendance du march茅 脿 la subvention crois茅e et en fournissant plus de clart茅 dans la tarification. Selon les donn茅es r茅centes d'une enqu锚te, 81 % des consommateurs font confiance 脿 leur pharmacien local, et 88 % voient les pharmaciens comme leurs prestataires de soins de sant茅 les plus accessibles, avec pr猫s d'1 Am茅ricain sur 3 visitant les pharmacies chaque semaine, soit deux fois plus que les visites chez le m茅decin.
L'initiative repr茅sente un changement strat茅gique vers des services pharmaceutiques de d茅tail plus durables, avec des plans pour 茅ventuellement s'茅tendre aux prescriptions g茅r茅es par Medicare et Medicaid. Cette nouvelle approche aide 脿 r茅duire la n茅cessit茅 de taux plus 茅lev茅s sur certains m茅dicaments pour subventionner les pertes sur d'autres, tout en offrant une transparence accrue pour les PBM et les payeurs.
CVS Health hat angek眉ndigt, dass alle kommerziellen Rezepte in der CVS Apotheke ab diesem Jahr 眉ber ihr neues CVS CostVantage-Modell erstattet werden. Dieser innovative Erstattungsansatz verwendet eine transparente Formel, die auf den Beschaffungskosten f眉r Medikamente, einer festgelegten Marge und einer Servicegeb眉hr basiert, die die Qualit盲t der Apothekendienstleistungen widerspiegelt.
Das Modell zielt darauf ab, die Erstattung f眉r Apotheken zu transformieren, indem die Abh盲ngigkeit 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 w枚chentlich 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 h枚herer Preise f眉r einige Medikamente zu verringern, um Verluste auf andere zu subventionieren, w盲hrend er gleichzeitig die Transparenz f眉r PBMs und Kostentr盲ger erh枚ht.
- 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听through CVS CostVantage starting this year听
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听
New reimbursement model supports future of retail pharmacy and paves the way for improved PBM transparency
WOONSOCKET,听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庐 (NYSE: CVS) today announced that all of the commercial prescriptions dispensed through CVS Pharmacy庐 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听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听
* FOR TWICE AS OFTEN AS THEY VISIT THEIR PHYSICIAN SOURCE:听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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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?
