CVS Health PBM and Pharmacy Price Changes

CVS Health PBM and Pharmacy Price Changes Explained.
Adam Fein from DrugChannels.net did an excellent job explaining the new CostVantage and TrueCost price changes at CVS Health.
The CVS Caremark PBM will now reimburse pharmacies (including their own CVS pharmacies) the Acquisition Cost of the medication PLUS a dispensing fee. The reimbursement by the PBM to the Pharmacy is called the Maximum Allowable Cost (MAC).
Previously, the PBM and Pharmacy negotiated the MAC independent of the Acquisition Cost. Therefore, some pharmacies were actually paid LESS by the PBM than it cost them to acquire some medications. I.e. The Pharmacy lost money every time they filled these particular medications.
To understand the ultimate impact of the CVS CostVantage and TrueCost pricing program on employee health plans and plan sponsors, the video provides a rubric of example prices that can be filled in with an employer's actual prices per medication.
Sources:
www.drugchannels.net/2023/12/...
www.wsj.com/health/healthcare...
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[@yozimerio]

I just wonder where the antitrust authorities are? I'm a pharmacist. Never opened a pharmacy because of all this BS.

[@ahealthcarez]

Good question. Thank you for watching.

[@CharlieSpecter]

Because it’s an oligopoly and not a monopoly, the feds don’t do anything

[@daveearle6134]

Dr. Bricker, your videos are always educational and informative. Thank you for all you do. I noticed that your math was incorrect at the beginning of your video when you added "$8 + $10 + $12" at line 3:36 in your transcript and said it equaled $20 when it should be $30. Does that impact your calculations and overall cost variances?

[@ahealthcarez]

Thank you. No. Just means pharmacy + PBM make $120 for drugs that cost $30 instead of $20.

[@christophermoriarty7843]

I noticed this too

[@user-jl6tl7ye9n]

Great video and very helpful, thank you very much

[@ahealthcarez]

Thank you for watching.

[@shlomoisrael883]

I'm a small pharmacy owner and I cringe when I see this! It's so sad, I feel like I'm working for CVS. And this doesn't even take into account the DIR fees, all this would be so illegal in any other Industry

[@ahealthcarez]

Thank you for watching and sharing your perspective.

[@ach3322]

I love this video.. my only question is why is the True Cost model does not include Acquisition Cost? Is it being replaced with Dispensing Fees? Thanks.

[@byu0614]

Dear Dr. Bricker, Thank You!this is the simplest video I have ever seen regarding new CVS pricing change. We are a small independent pharmacy. Quick question: under New MAC for B- independent pharmacy, how does PBM know our acquisition cost? I think they will pay us $12 instead of 14.

[@ahealthcarez]

Good question. They don’t. They are going to apply some sort of ‘Avg AC’ methodology, which might lend itself to skewed reimbursement.

[@pharmerbrown]

Hello please check out blueberry pharmacy out of PA, he was the first and only one doing cost plus pricing. Thank you for explaining.

[@ahealthcarez]

Super! Thank you.

[@seanchang5372]

Few questions:
1) When you say it is better to fill from CVS versus MCCPP in the new model, this is from the perspective of whom? If I’m tracking properly, the patient pays the same, the PBM (Caremark in this example) spread goes up for A & C, and the plan costs stayed the same?
2) Also, in this example the difference for CVS was $1, but is this magnified for most expensive biologics and such?
3) what is stopping them from making the delta between dispensing fees larger at CVS vs others(ie competitors)

[@ahealthcarez]

All good questions.
1. The patient if they have an HSA compatible plan with no copays
2. The revenue stream for specialty drugs like biologics takes the form of commissions (called ‘rebates’) from the pharmaceutical company to the PBM.

[@ahealthcarez]

3. Negotiations with the other pharmacy chains.

[@seanchang5372]

@@ahealthcarez thank you for taking the time to answer my questions!

[@shametanicole3193]

You did it Once again Batman - 😊 Thanks

[@ahealthcarez]

Thank you for watching.