CVS Caremark Prescription Drug Trend Rose to 2.9% in 2020

CVS Caremark recently announced that its overall prescription drug trend for 2020 was 2.9 percent, while there was a negative trend for 34 percent of commercial pharmacy benefit management (PBM) clients.

These numbers are notably higher than CVS Caremark’s 2019 trend report, which found that the overall drug trend for that year was 1.4 percent, a 1.5 percentage point difference from 2020 drug trend findings. This was also the lowest number CVS reported in the five years prior despite increases in prescription utilization and ongoing manufacturer-driven price inflation. 

Additionally, 41 percent of commercial PBM clients had a negative trend in 2019, a slight difference from the 2020 report. 

Factors contributing to the 2020 prescription drug trend included changes in utilization during the pandemic, new drugs and indications, and hyperinflation.

For example, pre-pandemic, utilization for heart failure medications was nearly 30 percent, while during pandemic shutdowns, this number fell to the negatives. 

During the pandemic, utilization of preventative care plummeted and people became less likely to start prescription therapy. Overall, CVS Caremark reported 1.7 percent utilization in 2020 and 1.2 percent price growth.

Specialty treatments grew and dominated the therapies pipeline, the report also showed. About 98 percent of the utilization increase in 2020 was from conditions with new therapies and indications, and just five therapeutic categories drove 90 percent of the PBM’s spend that year. 

Currently, specialty treatments account for over half of pharmacy spend at 52 percent. 

CVS Caremark, however, said it was able to manage increased specialty drug costs, with more than 40 percent of clients having single-digit specialty trend and 18 percent of clients having negative specialty trend.

Copay optimization, rare disease management, and medical specialty management were the top three strategy the PBM use to keep specialty drug spending in check.

Keeping specialty spend in check is vital to keep costs in check for managed clients. 

“Specialty spend costs are manageable but require careful insight,” a CVS Caremark spokesperson said. “Ensuring appropriate utilization, avoiding waste, and maximizing cost reduction programs helped us keep specialty trend in check for clients who used our services.” 

Finally, CVS Caremark removed 72 drugs from its formulary in 2020 to combat hyperinflation of prescription drug prices. The report stated that its hyperinflation strategy reduced client spend by $1.2 billion compared to 2018.

Looking forward, CVS Caremark is focus on controlling its prescription drug trend while addressing key issues arising from the pandemic.

For example, the COVID-19 pandemic increased the need to create equitable access to high-quality services for every American. And CVS Caremark stated that overall drug pricing remains a key area of focus in the political as well as policy arena.

“Helping clients manage their spend is why we exist. But we can do more. As providers of pharmacy services to one in three Americans, we see a clear opportunity to help our country make real progress toward that goal,” a CVS Caremark spokesperson said in the announcement.

So far, the company has also led an early effort with state and federal agencies to change regulations and enable greater remote pharmacy management. 

Nearly 85 percent of members signed up to receive digital communications last year. This connectivity allowed CVS Caremark to maintain member engagement, leading to cost savings for its clients. CVS Caremark stated that just last year, the average member out-of-pocket cost per 30 days’ supply was $9.63. The company aimed to reduce these out-of-pocket costs, which is a typical barrier to medication adherence. 

Out-of-pocket costs continue to rise for patients year-over-year. 

A February 2021 GoodRx analysis found that prescription drug prices increased for 832 medications by an average of 4.6 percent in January 2020. This was the largest increase that has occurred in years.

Of the drugs experiencing price hikes this year, 822 were brand drugs, 175 were specialty drugs, and 77 were healthcare practitioner-administered drugs. 

The analysis also found that over 140 manufacturers, including Pfizer, AbbVie, Sanofi, and GSK raised the list price of their drugs between the end of December 2020 and January 31, 2021. 

Many of the drug manufacturers by these companies have seen increases in past years, too.