Rising specialty prices more than offset declining drug spend; PBM plans a new specialty service to control costs
CVS Caremark’s 2013 Insights report, its annual summary of cost and utilization trends for the 60 million covered lives among its client employer and health plans, finds that overall drug spend (on a “per member per month” or PMPM basis) rose only 0.1% in 2012, and would have been a negative 3.8% except for an 18.3% increase in specialty pharmaceutical dispensing. (Specialty products represent nearly 20% of CVS Caremark’s book of business.) The Woonsocket, RI, company says that there have been signs that members were utilizing fewer healthcare services, coming out of the recent recession; another factor affecting overall drug spend is the peak of the “patent cliff” in 2012, when billions of dollars’ worth of branded products became generic. CVS Caremark projects that the effect of patent expiries will tail off in 2015; meanwhile, it also touts its 77.4% generic dispensing rate, said to be the highest among PBMs.
A forecasting section of the Insights report projects total drug spend to increase by 1-5% this year, 4-9% next year, and 5-10% by 2016. Specialty spend will be in the double-digit range (between 15 and 28% each year) over that time span. The effects of specialty spending are getting a closer look by the company; the Insights report states that “We are creating a model, now in pilot, that will allow us to holistically manage the specialty patient using all our access points, channels and resources.” This effort will enable a patient to “drop off the prescription at any CVS/pharmacy. The medication can be delivered to their location of choice or picked up at the pharmacy. Every CVS Caremark specialty patient will receive consistent … clinical service … regardless of the channel through which they enter.” This pilot is expected to go live in 2014.
The full report is accessible at http://www.cvscaremarkfyi.com/insights2013
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