Connecticut Comptroller Kevin Lembo said a contract agreement with CVS Caremark, the state’s pharmacy benefit manager, is designed to reduce the state’s prescription drug costs by about 10% – $300 million – while increasing the level of transparency in drug pricing.
“Connecticut is calling the shots on prescription drug costs and quality,” Lembo said. “Taxpayers and patients are ready for a new way of doing business. This contract sets an example for other large employers across the nation to demand what is right beginning with details about who is paying who – and requiring that pharmacy benefit managers and drug corporations pass on all cost savings to taxpayers and consumers.”
Lembo’s office administers health care and prescription benefits for more than 200,000 public employees, retirees and their dependents, including employees from 100 municipal groups. Under the terms of the agreement, CVS Caremark will be required to disclose all of its revenue sources from drug manufacturer payments. The state will only pay the amount that CVS Caremark paid each pharmacy for the cost of filling prescriptions. The amount paid for drugs will be based on best-in-class discounts from CVS Caremark’s negotiated network pharmacy rates.
CVS Caremark will also provide data feeds to disclose all net costs and post manufacturer rebates. Drug rebates, where applicable, will now be immediately provided to consumers at the pharmacy counter. Lembo’s office will also exercise a wider audit authority to ensure CVS Caremark is in compliance.
“We’re always listening to our customers and evolving to meet their needs, and our renewed contract with the state of Connecticut demonstrates our commitment to greater transparency, flexibility and cost predictability,” said Derica Rice, president of CVS Caremark. “We are privileged to be able to continue our key role on the state’s behalf to ensure their employees have access to affordable medicines and innovative programs that make starting and staying on therapies simpler and easier.”