CVS changed the way it prices drugs, a big step toward more consumer-friendly pricing and transparency. The pharmacy giant aims to simplify costs by basing drug prices on the actual amount it pays for medications, thereby limiting markups and service fees to customers.
The decision to reevaluate drug pricing aligns with a broader industry trend, seeking clarity and simplicity in communicating prescription costs.
Bold Step to Rewire Drug Pricing
CVS emphasized that the move is a foundational step toward making the healthcare system more accessible to consumers and ensuring the viability of retail pharmacies.
A CVS Pharmacy spokesperson explained to ABC News, “What CVS is doing—at the pharmacy and the PBM [pharmacy benefit managers] — is rewiring or resetting how reimbursement happens in an industry that has become very complex and largely follows a model based on how things used to be a decade ago.”
The company believes its leadership in the pharmacy benefit manager (PBM) sector uniquely positions it to take this step forward. By revamping the reimbursement structure, CVS aims to create a more consumer-friendly system, preserve payers’ choices, and maintain a sustainable retail pharmacy industry.
Dr. John Brownstein, Chief Innovation Officer at Boston Children’s Hospital and an ABC News contributor, commended CVS’s decision, stating, “By basing drug costs on their actual acquisition price, CVS is taking a crucial foundational step to make healthcare more consumer-friendly and ensure the viability of retail pharmacies.”
While many consumers may experience a limited impact, the changes are expected to take effect gradually. The earliest consumer impact is anticipated in the first half of 2024 for individuals using cash pharmacy discount cards at CVS Pharmacy.
In 2025, CVS Pharmacy plans to extend this model to pharmacy benefit managers, with potential savings primarily on the payer or plan sponsor side.
Read more: Beware Of Gift Card Frauds: 5 Common Gift Card Scams Targeting Shoppers This Holiday
CVS Pharmacy’s Forward Vision
Dr. Lucas Berenbrok, an associate professor of pharmacy and therapeutics at the University of Pittsburgh, highlighted the mutual benefits for pharmacies and consumers under the new pricing models. Pharmacies can expect more predictable reimbursement rates, while consumers may encounter fairer pricing for generic drugs.
“I think it could give patients in the public even more trust that someone’s looking out for them and that they’re able to get medications at a fair price,” noted Dr. Berenbrok.
CVS’s pricing model mirrors the cost-based approach recently adopted by Express Scripts for prescription drugs.
The collective effort by significant players like CVS and Express Scripts to simplify drug pricing complexities has been welcomed as a positive development, ultimately benefiting both consumers and payers.
Read more: China Addresses Seasonal Respiratory Surge, Rules Out New Infectious Threats
