CVS readies a set of outcomes-based contracts for its clients

While announcing its annual update of drugs (now around 36) to be excluded from its “Standard Control Formulary” in 2018, the industry-leading pharmacy benefit manager (PBM) is also hinting at another cost-control measure: outcomes-based contracting. Such programs have been occasionally entered into between a few pharma companies (and a few of their branded products) and payers or healthcare providers. With the contract coming from a national PBM (CVS Caremark manages nearly 90 million plan members, including more than 31 million members under commercial plans), there is the potential to, in effect, drive a standard of care for a substantial number of patients—depending on how CVS Caremark sets up the contracts, and how rigorously payers choose to align their members’ care.

The three “Transform Value” programs are:

• Transform Oncology Value: This program encompasses several cancer types including breast cancer and non-small cell lung cancer. For patients on a certain breast cancer drug, if a plan’s average cost is above a predetermined threshold, the manufacturer would be responsible to add value. If plan members on a certain non-small cell lung cancer drug progress to secondary therapy and key lab data has been obtained, the manufacturer would contribute additional pre-determined value.
• Transform Obesity Value: The manufacturer would be required to provide additional value if members do not achieve a minimum level of weight reduction within the initial assessment period. This program is only available to clients aligned with our Standard Control Formulary or Advanced Control Formulary.
• Transform Respiratory Value: For a certain chronic obstructive pulmonary disorder controller, if a greater percent of members escalate to triple therapy (a type of combination therapy) compared to those on other controllers, the manufacturer would need to provide enhanced value.

These programs will be additions to other cost-control measures the PBM has taken: Besides its formulary exclusion list, the company offers indication-based pricing (reimbursement based on the condition being treated); and, for diabetes, a "Transform" program that combines drug choices with complementary patient-care services. A CVS Caremark spokesperson says that the Transform Value program will be launched in the near future; it remains to be seen which drugs will be targeted, and how successfully CVS Caremark is able to convince its clients to include the programs.