CVS to start basing drug charges on prices

[RetMD21]

The formula would be actual cost to acquire + fixed markup + a pharmacy charge which is what Cost Plus does. This will make consumer costs more transparent but it remains to be seen if overall costs will be less. NYT did a story on this (sorry about the paywall)

https://www.nytimes.com/2023/12/05/business/cvs-pharmacy-drug-prices.html

 

[OldShooter]

I think this is a game changer. As prices and costs become more transparent they will inevitably go down. I believe we owe thanks to the California BCBS system for forcing this on CVS and eventually quickly it will be forced on other providers as well.j

 

[ERhoosier]

Result to the consumer will depend entirely on the specific drugs and 'marketing' practices.
A couple of my 'old person' meds are zero cost already....even WITHOUT insurance (store Pharmacies want to get you in the store hoping you buy other stuff). Others are cheaper with GoodRx than my insurance (Part D) co-pays.

The push for this concept LONG pre-dated the CA BCBS initiative. In fact PBMs initially 'sold' themselves as using this concept to cut costs......and we know that did not work out as promised

 

[GenXguy]

Just a way to drive up costs. I don't go to CVS.

 

[plsprius]

Thank you Mark Cuban and Cost Plus Drugs. Thank you Costco too. More to come, I hope ��.

This move was forced on CVS as all the PBMs were marking up some cheap generic drugs to outrageous prices. It could not stand the smell test.

 

[OldShooter]

... The push for this concept LONG pre-dated the CA BCBS initiative. In fact PBMs initially 'sold' themselves as using this concept to cut costs......and we know that did not work out as promised

Exactly why the new attacks on PBMs. Between this and Medicare price negotiations IMO we are looking at completely new drug economics over the next few years.

 

[Gotadimple]

Just a way to drive up costs. I don't go to CVS.

Even if you don't 'go' to CVS you may be getting CVS. They are huge. For example if you get your health insurance through Aetna (and it's many subsidiaries) you are getting CVS.

- Rita

 

[GenXguy]

Even if you don't 'go' to CVS you may be getting CVS. They are huge. For example if you get your health insurance through Aetna (and it's many subsidiaries) you are getting CVS.

- Rita

I get to choose where I go. I have checked CVS, but their prices are higher.

 

[Northforker]

We have 7 pharmacies in our little town of 20,000. CVS and Walgreens are the two most expensive for my 2 prescriptions. Wal Mart and Krogers are the cheapest national chains. I Can't say how the 3 local mom and pop drug stores fall in the mix, so far I don't have an expensive prescription, so I haven't power shopped the locals.

 

[audreyh1]

Even if you don't 'go' to CVS you may be getting CVS. They are huge. For example if you get your health insurance through Aetna (and it's many subsidiaries) you are getting CVS.

- Rita

It’s interesting that for DH’s Aetna part D plan, CVS was not a preferred pharmacy. So we weren’t getting CVS.

 

[JBTX]

https://www.kff.org/wp-content/uplo...ercial-pharmaceutical-supply-chain-report.pdf

While 15 years old the above still does a decent job of describing the convoluted process of pricing drugs. I’m skeptical this cvs measure moves the needle but I could be wrong.

 

[GB Badger]

Pharmacies are part of the issue, too

When a prescription is processed by a PBM, the dispensing pharmacy has to submit their usual and customary price (ie. the price to the general public). The PBM "compares" the pharmacy's U&C vs. the contracted rate through the PBM. The patient/customer's prescription charge is based on the less of the two amounts.


Because pharmacies often establish high/inflated U&C pricing, the PBM's contracted rate is often lesser than the U&C. Often times still high, but lesser than then U&C.


Moral of the story: if pharmacies actually submitted U&C pricing that was truly reflective of their cost plus a reasonable mark-up, that's how the prescription would be priced...but most don't.

 

[RetMD21]

Moral of the story: if pharmacies actually submitted U&C pricing that was truly reflective of their cost plus a reasonable mark-up, that's how the prescription would be priced...but most don't.

That's interesting. I know that when I looked at GoodRX prices for a particular drug Walgreen's quoted cash price was much higher than other pharmacies. Of course they may just be an outlier on a few drugs and maybe all pharmacies do that.

WSJ says that the new CVS pricing may make it less likely that consumers will find that skipping insurance and using a discount card will give them a better deal
https://www.wsj.com/health/healthcare/prescription-drug-costs-cvs-pharmacy-56acb623? paywalled

 

[GB Badger]

Transparency...

Unfortunately, pharmacies and PBMs are both culpable. GoodRx, Mark Cuban, and other initiatives came about because of the pricing dysfunction in the prescription drug market. Generally, it's similar to the pricing dysfunction in the health insurance industry as a whole (high U&Cs with discounts given to purchasers based on their market dominance), but more complicated as drug distribution and the flow of money between manufacturer, middle-person entities, and the ultimate patient is quite complicated. Drug rebates to insurers, patient assistance programs, PBM-owned mail order pharmacies etc.... further obscure the flow of $$$.



GoodRx, etc... would not be needed if existing retail pharmacies charged a reasonable U&C. But they've brought awareness to the issue that is spurring some change, albeit somewhat glacial in speed.



Pharmacies and PBMs need to make a profit, but the convoluted system that's evolved over the decades could never have been envisioned by a sane society.

 

[plsprius]

Call me skeptical but GoodRx is hardly my choice for a hero in this battle against too high prices for generic medications. Consumer Reports says they were sharing their data with Google, Facebook, etc. They claim to have changed this practice….

https://www.consumerreports.org/hea...-with-google-facebook-and-others-a6177047589/

“While people like Marie are saving money with GoodRx, the company’s digital products are sending personal details about them to more than 20 other internet-based companies. Google, Facebook, and a marketing company called Braze all receive the names of medications people are researching, along with other details that could let them pinpoint whose phone or laptop is being used.”

 

[Gotadimple]

That's interesting. I know that when I looked at GoodRX prices for a particular drug Walgreen's quoted cash price was much higher than other pharmacies. Of course they may just be an outlier on a few drugs and maybe all pharmacies do that.

WSJ says that the new CVS pricing may make it less likely that consumers will find that skipping insurance and using a discount card will give them a better deal
https://www.wsj.com/health/healthcare/prescription-drug-costs-cvs-pharmacy-56acb623? paywalled

What you see on GoodRx is what the pharmacy agrees to charge when the customer provides a coupon or bar code on their phone.

Whether the CVS pricing makes it less likely for GoodRx (and other discount cards) to stay in business is debatable. They started their model to serve the Medicare population who find themselves in the donut hole, and for those who did not have drug coverage or any health insurance coverage. That gap goes away in 2025 for Medicare beneficiaries. There will always be those who don't have insurance.

 

[CaptTom]

The formula would be actual cost to acquire + fixed markup + a pharmacy charge...

I question that first variable, cost to acquire. Isn't that number pulled out of thin air by the manufacturers? Wouldn't it be in the best interests of both the manufacturer and the pharmacy to inflate this? The MFG'er would get more, and the pharmacy's markup (assuming it's a percentage) would be higher.

I won't be holding my breath on this (or any meaningful health care reform.) There's just too much money streaming in to the health care corporations and the politicians they buy.

 

[RetMD21]

I question that first variable, cost to acquire. Isn't that number pulled out of thin air by the manufacturers? Wouldn't it be in the best interests of both the manufacturer and the pharmacy to inflate this? The MFG'er would get more, and the pharmacy's markup (assuming it's a percentage) would be higher.

I won't be holding my breath on this (or any meaningful health care reform.) There's just too much money streaming in to the health care corporations and the politicians they buy.

It remains to be seen if CVS will be playing games with that. I recall something a few years ago about a false "average wholesale price" for a class of drugs that excluded discounts that were widely available.

 

[Koolau]

My insurance coordinates with OptumRx mail order pharmacy. It saves me quite a bit over the equivalent at CVS. For "rush" stuff (like, say an antibiotic for an infection) I still use CVS as it's not far away and it's quick. YMMV