All of the commercial prescriptions dispensed at CVS pharmacies will be processed through its CostVantage reimbursement model beginning this year, the healthcare giant announced Monday.
Under the model, prescriptions are priced based on the underlying cost with a delineated markup and dispensing fee to cover the services provided by CVS in the transaction. The company says this model makes it less necessary to raise the cost for certain prescriptions to cover losses on other drugs.
The model also seeks to increase transparency for insurers and pharmacy benefit managers, making it potentially easier for PBMs to establish their own more transparent programs for plans and clients.
Prem Shah, group president for CVS Health, said the team is also working to expand the program to Medicare and Medicaid prescriptions.
He said that through conversations with key stakeholders, the team was able to find "common ground and a commitment to a simpler approach to reimbursement and a more sustainable path forward for retail pharmacy."
“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,” Shah said.
"As the leading pharmacy in America, we take our responsibility seriously to continually improve and advocate for community pharmacy," he said.
CVS first unveiled CostVantage in December 2023, with plans to roll it out for commercial plans in 2025. CVS said the model is designed to more effectively support community pharmacies in the present, but it also "anticipates the future."
Editor's note: This story has been updated to more accurately reflect CVS' work to expand CostVantage.