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Specialty spend: Balancing affordability and member experience


Joshua Fredell, PharmD, is Vice President for Product Development at CVS Health®. In that role, he works to devise innovative strategies to help CVS Caremark® clients manage their specialty spend. His portfolio includes products to manage formulary and cost management strategies with oversight of utilization management, preferred drug strategies, value-based contracting and plan design programs.


CVS Health has moved to focus on specialty spend management as dictated by the marketplace. What has been the biggest change during your time with the company?

We led the commercial sector of the industry when we added exclusions to the formulary about ten years ago. Now, every single pharmacy benefit manager (PBM) has multiple formularies with exclusions but, at that time, it seemed revolutionary. Now it is a mainstay and is commonplace in the space.

Overall, the biggest changes have been brought about by digital connectivity. By enhancing traditional cost management with patient and provider connectivity, we have been able to accelerate and advance acceptance of more sophisticated benefit designs underpinned by digital support for patients.


How has your past experience as a hospital pharmacist been useful in your current role?

We did some very immediate things to support continued access to available therapies for those who need them. Early on, there were some medications commonly used for other conditions that began to be used to support patients with COVID-19. It was important to ensure that those drugs were available for acute treatment while maintaining supply for patients with chronic conditions. We responded swiftly by monitoring and managing the amount of medication that could be obtained at any one time so hoarding and stockpiling did not adversely affect supply for other patient populations. At the core of what we do as an organization is to ensure appropriate access and affordability for everyone who needs it.

We also tried to be mindful about formulary changes during the pandemic. We thought about how to balance potential cost savings with the impact on plan members, knowing that any changes would require people to engage with their physician or pharmacist when they might not feel comfortable leaving their homes. At the same time, affordability really came to the fore for our clients, many of whom are in industries significantly impacted by the pandemic. They want to continue to provide great benefits to employees but were also looking for cost savings so they could ensure business continuity. That’s likely to last for many of our clients even after the pandemic recedes from memory.

What concerns and priorities do clients express during their conversations with you? Are there overarching themes that are common?

The balance of affordability with member impact is almost always at the top of the list, but where each client finds that balance can vary considerably.

Member impact is a continuum that drives clients’ selected cost management strategies. The fact is, member transition is a given when new strategies are adopted, and we are forthright about that. However, employers confront that all the time; for example, a change in medical benefit may require members to transition from one doctor to another, or from one clinic to another. Members also change medications on their own or with their physicians. Sometimes drugs don’t work or they’re looking to lower the cost or some other aspect.

Sometimes getting to a certain level of detail can be helpful. For a client who was recently concerned about member disruption after a formulary change, we looked into the specifics of the top two drugs. Both were brand versions of drugs that already have generic equivalents, so we could assure them that members would have access to the exact same product, made by a different manufacturer, as opposed to changing to a new drug with a different chemical makeup.

Once a member is on a drug, our Intelligent Medication Monitoring (IMM) program checks in with them to see how things are going and whether they are experiencing any side effects. This helps to smooth required transitions and make sure the experience was a positive one for the member. If things are not going well, IMM triggers a follow-up from a pharmacist who can work with the member to ensure accurate dosing and make adjustments as needed.

What is your perspective on the potential for continued innovation in specialty cost management?

There is more to be done in every aspect of specialty cost management. Formularies will continue to be an important tool, especially when we get more biosimilars into the market. There is much anticipation for 2023, when the biosimilar to Humira is released. It will be very interesting to see how pharmacy benefit managers, including CVS Caremark, handle that biosimilar in their formulary design.

Utilization management (UM) also will continue to be a key tool. There’s so much attention on UM now, I think in part because we have exhausted the big pieces of formulary today – the categories that are open to change. Some categories are more clinically difficult to change, such as oncology, HIV, RA, MS. That’s where Specialty Guideline Management and prior authorization come into play. I think more can be done in UM.

How has your past experience as a hospital pharmacist been useful in your current role?

I feel empathy for the individual. People want the best for themselves and their family members when they are in pain or suffer from a chronic condition. Even if the medication is $1,000 per dose, they want it because they want to feel better. But I also have worked in managed care pharmacy, and I understand the implications of a $1,000-per-dose medication on a population level. That expensive therapy may not be the right answer for every individual patient and we also want to allocate funds for the million-dollar curative therapy for hemophilia or a new cure for cancer. Those treatments by their very nature will be difficult to afford.

I love what we do from a population health perspective as we work to make sure the population can get the best, most affordable care it can. We do want the very best for the individual, but sometimes may guide them to a lower cost alternative because there is something else that still will help them but may be less costly. That’s why digital connectivity is key – so physicians understand cost impact and can identify other options with the patient. It changes and improves the experience for the patient, who can begin a new therapy with confidence, rather than starting a new drug and finding out later that the drug is not on formulary or has some other restriction. Digital connectivity allows for a better start to therapy – one that is affordable to the payor – and facilitates support along the way. It is critical to helping our clients strike that key balance between affordability and member experience. 

This document contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health.

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