PROVIDENCE – CVS Health Corp. on Monday announced a new pharmacy reimbursement model it says will bring more transparency to its drug-pricing system and change how much customers pay for their medicines.
The new model, introduced during the company's Investor Day, is called CostVantage. It will use a simpler formula that includes the cost of the drug, a set markup and fee to determine the drug’s price and reimbursement policy with benefit managers.
However, its impact on consumers and health insurers is unclear. Some drugs may cost less while others could see their prices rise, according to news reports. CVS executives told both the Wall Street Journal and CNN Business that more drug prices should fall than increase.
"We are leading with an approach that will shift how our retail pharmacy is compensated by implementing a more transparent and sustainable model that fairly aligns pharmacy reimbursement to the quality services we provide," CVS Health Chief Pharmacy Officer Prem Shah said in a statement. "It provides our [pharmacy benefit managers] and payor clients a foundational step towards more pricing clarity for consumers."
CVS plans to launch the CostVantage model with pharmacy benefit managers for its commercial payors in 2025.
In addition, the company on Monday also announced a new brand for its health services segment.
CVS Healthspire will be the new brand name for the company's Health Services segment, including Caremark, Cordavis, Oak Street Health, Signify Health and MinuteClinic.
The groups within CVS Healthspire will continue to focus on integration across the company's assets to deliver connected patient care, pharmacy benefits and innovative provider support solutions in communities across the country, making expert care simple, more accessible and more affordable.
The CVS Healthspire brand will roll out publicly this month and throughout 2024. Consumers will initially see "part of CVS Healthspire" appear on select CVS health care delivery offerings across digital and physical assets as the company continues to create an integrated ecosystem for patients, according to the press release.
"We are successfully executing on our strategy to advance the future of health care while unlocking new value for consumers," said CVS Health CEO and President Karen S. Lynch. "The combination of our businesses, and the key growth areas we have invested in, drive our ability to lower the total cost of care, improve health outcomes and deliver on our commitments to our customers, consumers and shareholders."
