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CVS Caremark shifts PBM model to 100% pass-through pricing and focus on net cost

December 05, 2018 / Evan Sweeney

With a pharmacy, benefit managers industry facing greater calls for transparency, one of the industry's largest players has unveiled a new business model that passes 100% of rebates to plan sponsors. CVS Caremark, the PBM owned by CVS Health, announced a new “Guaranteed Net Cost” pricing model on Tuesday that “simplifies the financial arrangement underlying PBM contracts” by building in “net cost predictability.” The model “guarantees the client’s average spend per prescription” after rebates and discounts across retail, mail order, and specialty pharmacy distribution channels. “We see a real opportunity to offer clients a simpler economic model that leverages proven PBM cost management strategies to provide predictable drug costs,” Derica Rice, CVS Caremark president, said in a statement. “As a result, CVS Health is introducing a straightforward, more holistic approach that enables plan sponsors to clearly see...