CVS Caremark recently issued “Insights 2010: Evolving Pharmacy Care,” the latest in a series of annual reports about the role of prescription drugs in the nation’s health care system as seen from the perspective of the company’s pharmacy benefits management operation. It includes much that’s of interest pertaining to both CVS Caremark’s business and larger trends.


CVS Caremark, Insights 2010: Evolving Pharmacy Care, pharmacy benefits management, PBM, prescription drugs, Jeffrey Woldt, Caremark Pharmacy Services, Per Lofberg, Patient Protection and Affordable Care Act, health care reform
































































































































































































































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Inside This Issue - Opinion

CVS Caremark keeps eye on what’s next

July 19th, 2010

CVS Caremark recently issued “Insights 2010: Evolving Pharmacy Care,” the latest in a series of annual reports about the role of prescription drugs in the nation’s health care system as seen from the perspective of the company’s pharmacy benefits management operation. It includes much that’s of interest pertaining to both CVS Caremark’s business and larger trends.

In 2009, a year when the PBM received unwanted attention for losing $4.8 billion in contracts (much of which has since been offset with new business), it nonetheless succeeded, in the words of Caremark Pharmacy Services president Per Lofberg, “to continue to control pharmacy costs while still providing members with access to the medications they need, programs to support medication adherence and opportunities for out-of-pocket savings.”

The report states that last year most plan sponsors working with Caremark did not shift costs to participants. In fact, member contributions fell to 15.7% in 2009 from 19% the previous year.

Another area where the PBM made notable progress was generic drug dispensing. As a result of ongoing member educational initiatives about the safety, efficacy and value of such medications, Caremark was able to increase its generics dispensing rate to 68.2% last year from 65.1% in 2008.

In typical CVS Caremark fashion, the report devotes as much space to looking at future developments as it does to analyzing past performance. As Lofberg, who was brought in to head the PBM in January, points out, “This has always been a dynamic industry, but the pace of change today is unprecedented.”

He cites the shift in emphasis from branded drugs to generics, the rapid growth in use of specialty pharmaceutical products, the emergence of pharmacogenomic testing and the impact of health care reform as factors that payers, providers and patients will have to contend with in coming years.

“Insights 2010” makes it clear that CVS Caremark is committed to understanding those developments and adapting its business model accordingly. The company is involved in several research partnerships designed to shed light on medication nonadherence and other health care challenges. The work is being conducted in conjunction with such institutions as Harvard University, Carnegie Mellon University, Dartmouth College, the University of Pennsylvania, and Brigham and Women’s Hospital.

One major variable for CVS Caremark and everyone else with a stake in the U.S. health care system is how the Patient Protection and Affordable Care Act, which was signed into law by President Obama in March, will work in practice.

The health care reform legislation — the major provisions of which do not take effect until 2014, with others not kicking in until three years later — promises to bring more than 30 million additional Americans into the ranks of the insured. That’s good news for those involved in pharmacy care, as are provisions calling for medication therapy management demonstration projects and a pathway for generic versions of biotech drugs.

Rules being developed by the executive branch will go a long way toward determining what health care reform will ultimately mean, something CVS Caremark recognizes.

“Implementation regulations and guidance are still to be issued by applicable government agencies, making it difficult to project the law’s eventual impact,” notes “Insights 2010.”

While much of importance to the future of health care is yet to unfold, one thing certain: The visionary thinking that brought together one of the country’s top drug chains and a leading PBM three years ago to create CVS Caremark is alive and well, and it should ensure that the company remains a catalyst for positive change in the years ahead.

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