Under a new program targeting rising drug prices, CVS Caremark, the pharmacy benefit management arm of CVS Health, will allow its clients to drop coverage of drugs with extremely high launch prices, according to The Hill.
CVS says launch prices have been rising for years and are set by manufactures without much oversight. The new program would use methods of comparing the cost and effectiveness of new drugs, an analysis commonly used in Europe.
"No one but manufacturers have, until now, had any control over the launch price of newly patented drugs. This new approach, harnessing the power of the market, could change manufacturer behavior,” CVS said in an announcement, according to The Hill.
CVS noted drugs deemed "breakthrough" therapies by the FDA would be excluded from this program.
Specifically, the PBM set a cost-effectiveness threshold of $100,000 per quality-of-life years, a measure that tracks the quantity and quality of life generated by providing the treatment or medical intervention. That means CVS Caremark will allow its clients, insurers and employers to exclude from their plans any drug launched at a price greater than $100,000 per quality-adjusted life year. The ratio is determined based on public analyses from the Institute for Clinical and Economic Review.
Without specifically calling out CVS, drug lobbying group Pharmaceutical Research and Manufacturers of America said it opposes "the misuse of subjective, one-size-fits-all cost effectiveness thresholds to deny patient access to life saving medicines."