This commentary was submitted by CVS Health as part of CVS Health’s sponsorship of Fortune Well.
Health care is complex, and so is the pharmacy landscape. That leads to a lot of lazy takes by people who mean well but don’t necessarily understand how to create the changes we need. We do know how. And we are doing so.
I am proud to lead CVS Caremark, the country’s largest pharmacy benefit manager (PBM). Despite what you’ve read here and elsewhere, we exist to make prescription drugs more affordable. As we work to bring down costs, you’ll hear from others who want to raise them, specifically pharmaceutical companies who are directly responsible for how drugs are priced in our country.
You’ve also likely heard recently from Mark Cuban, who has an emerging side hustle as a pharmacy expert. His company, Mark Cuban Cost Plus Drugs, has a narrow offering and focuses on the cost of generic drugs. That’s a problem that has already been solved. Over the past decade, many organizations have built sophisticated businesses focused on reducing the cost of generic drugs in this country.
The reality is, the Cost Plus offering is neither novel nor unique—it is a generic sourcing business that is 10 years too late. What’s more, it often lacks a consistent supply of products and regularly stocks treatments with short expiration dates, failing to offer the comprehensive and reliable service needed to deliver high-quality pharmacy benefits to a large patient population.
At CVS Caremark, we are creating a more transparent environment for drug pricing in this country, and it’s not just for 2,500 drugs; it’s for every drug from every manufacturer for every condition and every patient.
With that backdrop, let’s focus on the real issue: This country has a brand drug pricing problem.
In 2023, across our entire member population of approximately 90 million Americans, three brand-name drugs (Humira, Ozempic, and Stelara) cost more than every single generic drug combined. These brand product categories, where drug manufacturers set high prices, are the primary source of rising drug costs for employers and consumers, the groups we support every day.
Our size and scale allow us to go toe-to-toe with drug companies, driving competition and negotiating discounts that make the difference between someone affording their medication or going without.
Beyond our ability to negotiate, we are taking other actions to bring lower-priced biosimilars to market and to put in place a holistic strategy to better manage GLP-1 costs amid unprecedented demand. These are pillars of comprehensive, affordable pharmacy benefits for which Cost Plus has no answer.
We welcome competition. Choice is critical—PBMs offer options that are tailored to what a payer needs. Sometimes a business doesn’t need access to 70,000 pharmacies; a smaller network will do. An employer may want to use all of the rebates we negotiate on their behalf, or they might have us keep a percentage of the rebate to pay for the services we perform. In every instance, we’ll evaluate the needs of our customers and their members and do what delivers the greatest benefit to them.
As the largest purchaser of pharmaceuticals in the United States, we are using our size and scale to provide drug net cost guarantees through a transparent model tied to the price we pay. We offer cost predictability, whereas pharmacies like Cost Plus can and do change their prices at any time. And we manage all medications, including insulin and others that require special handling. This is what our customers expect and deserve.
From comprehensive care to formulary management to negotiations, our company and our industry continue to rapidly evolve. We recently announced the introduction of True Cost, an innovation that will drive greater transparency by reflecting the true net cost of prescription drugs, and that will pass on savings to members at the pharmacy counter. This is what we uniquely can do at scale.
We serve thousands of companies, health plans, unions, and government entities because we are the best option based our work and the value we deliver. Year after year, decade after decade, companies big and small have a decision to make about their PBM. They choose us because we take on every challenge, manage every drug, and deliver savings and safety.
It is well past time to go from debates to decisiveness. We are here to lead.
David Joyner is EVP CVS Health, President CVS Caremark.
