More than 90% of employers express concern regarding rising prescription drug costs, yet only 30% believe they can control pharmacy spending, according to a study by CVS Caremark and Employee Benefit News. This disconnect is driving organizations to seek new transparency and cost-management strategies for their pharmacy benefits.
The Burden of Rising Costs
The financial pressure of prescription drugs extends far beyond the sticker price of individual medications. Organizations are grappling with a complex environment involving specialty therapies, shifting patient needs, and demands for greater fiscal transparency. CVS Health reported that employers are increasingly looking to pharmacy benefit managers to help manage these rising costs while maintaining sustainable benefits.
Automating Price Savings
To address these expenditures, some programs now focus on automated price comparisons at the pharmacy counter. The Caremark Cost Saver program identifies lower-cost options for members and applies those prices automatically when available. These savings can be particularly beneficial for patients managing chronic conditions who require multiple daily prescriptions.
The Role of Biosimilars
Expanding access to lower-cost alternatives has become a primary strategy for managing pharmacy spend. Biosimilars, which are FDA-approved biologic products, provide a way to reduce costs while maintaining the same standards of safety and effectiveness as brand-name biologic reference products.
CVS Health said that employer interest in these alternatives continues to grow as companies search for sustainable ways to manage their pharmacy budgets.
Shifting Toward Price Transparency
The study found that 87% of employers identified cost transparency as one of the greatest opportunities for pharmacy benefit managers to improve value. In response, CVS Caremark introduced TrueCost, a pricing model that provides acquisition-cost-based pricing and visibility into drug-level rebates.
This approach is intended to help employers make more informed decisions by providing a clearer view of what drives pharmacy costs. Currently, more than 90% of the CVS Caremark commercial book of business utilizes at least one feature of this pricing model.
Biosimilars Differ from Generics and Use TrueCost Pricing
Biosimilars are highly similar to FDA-approved brand biologic products, which are complex medications derived from living organisms. Unlike traditional generics, which are chemically identical to small-molecule drugs, biosimilars must demonstrate no clinically meaningful differences in safety and effectiveness compared to the reference product.
The TrueCost model shifts the pricing approach to be based on the acquisition cost of the medication. By providing visibility into rebates and drug-level pricing, it aims to create more predictability for employers when planning their future health care investments.
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