With Cost-Effectiveness Threshold, CVS Wants To Harness Power Of The Market To Drive Down Drug Prices
In the midst of criticism that pharmacy benefits managers are not doing enough to drive down costs, CVS has announced that it will let its clients exclude from their formularies any new drugs that exceed the threshold of $100,000 per quality-of-life years.
CVS Launches Program Targeting Expensive New Drugs
CVS Caremark will allow its clients to exclude coverage of drugs with extremely high launch prices under a new program the company said is aimed at pressuring manufacturers to lower drug costs. According to CVS, launch prices have been steadily rising for years, and are completely up to the discretion of the manufacturer. The high prices put an unsustainable burden on the country’s health system, CVS said. (Weixel, 8/14)
CVS Sets A Cost-Effectiveness Bar For Health Plan Coverage Of New Drugs
Specifically, the pharmacy benefit manager set a threshold of $100,000 per QALY, or quality-of-life years, a benchmark that measures both the quantity and quality of life generated by providing a treatment or some other health care intervention. In the U.S., anywhere from $50,000 to $150,000 is used for gauging value, although $100,000 is commonly used as a threshold. The pharmacy benefit manager will be looking to the Institute for Clinical and Economic Review, a nonprofit that runs cost-effective analyses, for guidance. Unlike other countries, the U.S. does not have a government entity that conducts official analyses and over the past few years, ICER has increasingly filled this role, sometimes irking drug makers in the process. (Silverman, 8/14)