CVS is a major pharmacy benefit manager. It negotiates with insurers and drug manufacturers to get the insurers lower net prices. It is offering insurers a new option for next year:
CVS Caremark is initiating a program that allows clients to exclude any drug launched at a price of greater than $100,000 per QALY from their plan. The QALY ratio is determined based on publicly available analyses from the Institute for Clinical and Economic Review (ICER), an organization skilled in the development of comparative effectiveness analyses. Medications deemed “breakthrough” therapies by the U.S. Food and Drug Administrationwill be excluded from this program, which will focus on expensive, “me-too” medications that are not cost effective, helping put pressure on manufacturers to reduce launch prices to a reasonable level.
The introduction of step therapy into MA plans has the potential to lower drug prices in those plans. In short, if the insurer has the ability to prefer one drug over others for the treatment of a particular condition and to require patients to begin on that drug, manufacturers may compete for their drug to obtain that preferred status. CMS’ announcement also permits MA plans that administer Part D plans to cross-manage across those plans, using a Part D drug as the “preferred” drug for purposes of Part B negotiation. CMS seems to be more optimistic about the scale of the potential savings than are analysts in the field, but providing MA plans with more leverage against pharmaceutical companies will likely reduce prices, although perhaps more so in some therapeutic areas than others.