CVS Works to Improve Drug Affordability, Accessibility

Although the treatment prescribed to a patient by a doctor should be best tailored and personalized to the individual, drug affordability and access continues to be a challenge for patients in the US. 

Nearly 2 billion people have no access to basic medicines, according to the World Health Organization (WHO). Lack of access to medicines is one of the most pressing issues people in the US face, and is generally due to gaps in local health systems. 

As the healthcare industry works to tackle skyrocketing spending and lack of access to medication, experts continue to look at the role that pharmacy benefits managers play in the pharmaceutical supply chain and how they impact overall drug costs.

A pharmacy benefits manager (PBM) is a middleman that handles most aspects of the drug purchasing process on behalf of health insurers, Medicare Part D drug plans, large employers, and other payers. 

PBMs reduce prescription drug costs by negotiating rebates with drug makers and passing some of the savings to patients and payers, getting drug price discounts from retail pharmacies, and dispensing drugs at lower costs through mail-order pharmacies.

Overall, PBMs have a crucial impact in determining total drug costs for insurers, as well as creating patients’ access to medications.

 One of the largest PBMs is CVS Caremark, which manages the dispensing of prescription drugs for over 75 million plan members through five mail order pharmacies, specialty pharmacies, long-term care pharmacies, and national network of more than 60,000 retail pharmacies.*

“Our clients hire us to ensure that they get appropriate value for the dollars they’re spending on drugs. We're within three miles of 81 percent of the population, which gives us a really interesting ability and connection to the communities to meet that very clearly articulated need from patients,” Alan M. Lotvin, MD, executive vice president of CVS Health and president of CVS Caremark, said in an interview with PharmaNewsIntelligence. 

Because of the number of locations across the country, CVS has the ability to maintain a community connection and home in on reducing medication costs while increasing accessibility for their patients. 

Lotvin talked about three specific levers that CVS pulls to give its customers the appropriate value for the dollars they’re spending on these drugs. 

“First, we have to ensure we get the right people started on drugs. So we try to think how we ensure that every patient, no matter where they are, who they're seeing, is getting the best possible quality of care,” Lotvin said. 

The second lever focuses more on costs, specifically formulary pricing, and acknowledging that different drugs have different prices. 

“We make sure we get the lowest cost agent first where it's clinically appropriate,” Lotvin said. “The cost unit is formulary and our role is to create robust formularies that provide enough choices so that we can take good care of patients, but also create competition in the marketplace.”

Lastly, Lotvin stated that CVS looks at the differences between brand, generic, and over-the-counter therapies and tries to create the right incentives for consumers. 

But even after a patient breaks through barriers and acquires their needed treatment, medication adherence can become a major issue. 

When asked about the impact medication cost has on adherence, Lotvin explained that he believes adherence may not be “largely financial.”

“When looking at the major problems of adherence, particularly for generic statins at two years, it’s not great. You have nearly 60 percent of people still on that after two years,” he explained.

“So long-term adherence is not really related to cost,” he stated. “But the combination of specialty patients on high-deductible health plans can have a sticker shock.” 

Lotvin also explained that the company spends time thinking about another aspect of medication non-adherence, which is individuals not taking their drugs as they’re supposed to, but still refilling them out of habit. 

“We’re able to really be a lot more precise around communications with patients and ensure that they're getting the therapeutic benefit that we expect from the medication and that they truly need the medication, the next dose, the next fill, before we fill it,” Lotvin explained.

In 2018, CVS introduced its mail delivery service, which aimed to increase adherence and decrease burden for customers overall. The service delivers 90-day supplies of medications right to patient doorsteps and offers automatic refills as well. 

But Lotvin explained that, surprisingly, the general trajectory of mail service pharmacy over the past 10 years, if not longer, has been on somewhat of a downward trajectory.

He said that in the past, CVS offered its customers who were already part of the mail delivery service, the option to pick up their prescriptions. The customers chose the local pharmacy 54 percent of the time. 

Lotvin believes this is due to overall convenience. 

“If you're having a temperature-sensitive thing, that's very expensive, shipped to your home, you probably want to be home. So you have got to take time off from work. You have to schedule around it,” he explained. 

Additionally, 91 percent of people are within ten miles of a CVS pharmacy in the US and many individuals want their medication immediately after a doctor prescribes it. Therefore, it is oftentimes easier to pick up a prescription than to wait for a delivery to arrive.  

“It’s a schedule versus ‘Oh, I’ll just pick it up from the store on my way home,’” Lotvin said. “If you ask what people view as a differentiator, what’s clear is convenience with respect to drugs is key.”

But when the COVID-19 pandemic hit, more people were accepting of drug delivery, whether that was delivered from the mail pharmacy or from the retail pharmacy. 

Therefore, Lotvin believes that out of habit, the mail drug delivery service could take a turn and substantially increase over the next few years. 

“During the pandemic, more individuals were definitely interested in getting home delivery,” Lotvin explained. ”And I do think, like everything else, when you’ve done something for a year, it sort of becomes a habit.” 

“I suspect some durable upticks in mail delivery in the near future. We’re doing a lot of work around mail order specialty to really understand the value proposition, and how to meet the needs of members,” he continued.

In the past, CVS has partnered with top organizations to increase overall affordability and access to drugs. In 2017, the company partnered with Epic to help lower drug costs for patients by providing prescribers with expanded visibility to lower cost alternatives.

When asked about potential partnerships on the rise, Lotvin explained that CVS’ core competency is helping customers reduce drug costs and out-of-pocket costs, which are generally things that the company would want to build themselves.

Overall, he is interested in partnering with organizations when they have technology or expertise that they “really, really need.”

“I would definitely be aligned with partnering with someone has unique technology, particularly a protective technology, or unique network effect, where they can help us, and help us help our clients,” Lotvin concluded.

UPDATED 03/12/2021: The article has been updated to clarify the role of CVS Caremark.