CVS Caremark is saving money on drug costs by kicking specific products with high inflation off their formularies.
The pharmacy benefit manager (PBM) launched its program for “hyperinflation” drug removals in 2017 in which it will take drugs off its template formulary if they have far cheaper equivalents and their high prices aren’t backed by quality metrics.
So far, they've identified five drugs to remove as the default option for docs.
Through these efforts, Caremark has saved its PBM clients an average of $15 per 30-day supply on drugs—clients on this formulary model paid on average $88.30 for a 30-day drug supply, compared to $102.58 for other formulary designs.
As the program is focused on products like that with high costs compared to alternatives, just five have been pulled from formularies so far—leading to a 99% drop in member use. Even so, CVS estimates clients will save $4.60 per member per year. One such drug, a 250 mg chlorzoxazone tablet, a muscle relaxant, costs on average $2,902 for a 30-day supply, while an alternative (cyclobenzaphrene) costs an average $1.76 for a 30-day supply, a significant cost savings.
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By removing chlorozoxazone from the formulary, for example, CVS estimates clients could save $34,812 on a patient’s yearly supply.
“We continually review and identify drugs that are seeing high price increases and those that are outliers based on price including new market entrants,” Derica Rice, CVS Health executive vice president and president of Caremark, wrote in the report.
“This flexible approach of ongoing reviews and removals—rather than annual—helps ensure that clients can stay ahead of rapidly changing market trends, rather than simply reacting to market changes,” Rice wrote.
The other four drugs targeted so far are:
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1000 mg Metformin ER tablet, an extended-release drug used to treat diabetes. The average cost for a 30-day supply is $617, compared to $3.80 for a 30-day supply of regular Metformin.
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200 mg Fenoprofen caplet, a nonsteroidal anti-inflammatory drug. The average cost for a 30-day supply is $3,001, while an alternative drug, diclofenac sodium, costs $6.62 for a monthly supply.
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Lidocaine tetracaine cream, a topical anesthetic, costs $731 per 30-day supply, while lidocaine prilocaine costs $22 for a 30-day supply.
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Ortho DF 3,775 Unit-1 mg tablets, a folic acid and vitamin D supplement, costs $2,858 for a 30-day supply, while a folic acid supplement on its own costs $1.50 for a 30-day supply.