Specialty Drugs Drive Spending, CVS Health Drug Trend Reports

by Peter Johnson

In its 2020 Drug Trend Report, CVS Health Corp.'s Caremark PBM said its overall drug trend increased by 2.9% in 2020 and that 34% of its clients saw their pharmacy benefit spending decrease.

According to the report, specialty drug costs accounted for the largest share of spend. In fact, specialty treatments accounted for 52% of pharmacy spending in 2020, with 90% of spending concentrated on just five therapeutic categories. Despite that, the report asserts that "more than 40% of [Caremark] clients had single-digit specialty trend," and "18% of [Caremark] clients had negative specialty trend."

The PBM also reported that drug utilization for its clients increased by 1.7% and prices increased by 1.2%. For plans Caremark described as "tightly managed," trend was 0.6%, and the PBM claimed per member per month costs were $10 lower than the overall cohort.

Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates, says via email that the claims Caremark made in the report are hard to verify.

That rebates were included in the pricing data "makes me uneasy about interpreting the report's dollar claims," Rubinstein writes. "There is zero drilldown on information provided in the report," he adds.

"I find the CVS report uninformative with respect to sole source brands and specialty drugs, which represent the bulk of drug spend even while representing a small fraction of utilization as well as of patients using the drug benefit," he continues.

Rubinstein writes it is "more useful if you consider evaluating the CVS drug trend report together with the CVS Health Trends Report."

The latter suggests CVS's competitive market advantage as an integrated company is more important to the business, "compared to a standalone drug chain or PBM or specialty pharmacy — particularly with respect to increasingly common, super-expensive pharmaceutical and biopharmaceutical therapies," Rubinstein says.

Rubinstein points out that CVS has pitched the vertical integration of Caremark with Aetna's health benefits business as a selling point to plan sponsors in recent years.

"I wonder if, with respect to branded pharmaceuticals and biopharmaceuticals, interventions made possible by a high level of integration will increasingly differentiate companies like United/Optum[Rx], [Cigna Corp./Express Scripts] and CVS [Health Corp.]/Aetna — which together already dominate the PBM market — from competitors," he writes.

From RADAR on Drug Benefits