How CVS kept drug costs down despite soaring inflation

https://www.fiercehealthcare.com/payer/how-cvs-keeps-drug-costs-down-despite-soaring-inflation-rate

CVS says it kept drug price growth at nearly zero for certain clients last year despite high inflation in the industry.

The retail pharmacy giant said it kept price growth at only 0.2% for pharmacy benefit management clients despite 10% inflation, according to a report (PDF) the company released on Thursday. The lower cost growth was due in part to utilizing low-cost generic drugs, which were dispensed to 86% of pharmacy benefit management (PBM) clients. 

“We always encourage the use of clinically appropriate therapeutic alternatives including generics, which can lower cost for payors [sic] and members, leverage competition within drug classes where applicable, and develop innovative strategies to keep prescriptions affordable,” Jon Roberts, executive vice president and COO at CVS, said in an accompanying statement.

The announcement comes in the midst of the company’s $69 billion merger with health insurer Aetna, a deal both companies say will help lower drug prices for consumers. 

During a time of increasing drug costs, pharmaceutical companies have tried to pass to blame onto pharmacies and insurers, and vice versa. 

RELATED: Report: Brand-name drug prices grew 10 times faster than inflation over last 5 years

The report added that drug utilization growth was 1.7% and out-of-pocket costs for members also declined, with about 75% of members spending less than $100 for their medications. 

The company’s reliance on generics to keep prices down follows a lawmaker’s report that found prices for brand-name drugs have grown at 10 times greater than the rate of inflation between 2012 and 2017. Additionally, while manufacturer-driven price inflation for specialty drugs was 8.3% in 2017, CVS kept specialty drug cost growth at 3.7% for its client, according to the report. 

Generic substitution and Therapeutic substitution/interchange are not the same thing… the first is providing a generic version of a brand name medication. Therapeutic substitution involves substituting a medication in the “same therapeutic category” as to what was prescribed by the pt’s doctor.

Here is a post that I made yesterday that shows just how bad therapeutic substitution can be in regards to the pt’s outcome Let’s not forget… healthcare is basically a FOR PROFIT BUSINESS   when the profits of the insurance/PBM is the most important thing to the insurance company.

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