- Major pharmacy benefits manager CVS Caremark is partnering with drug discounter GoodRx on a joint program to bring down out-of-pocket drug costs, the companies announced Wednesday.
- Commercially insured customers will be able to pay GoodRx’s discounted pricing when filling commonly prescribed generic prescriptions at in-network pharmacies. The payments will be automatically applied to their deductibles and out-of-pocket limits.
- The program, called Caremark Cost Saver, will be available for tens of millions of CVS Caremark clients’ members at in-network pharmacies starting January 2024.
The partnership isn’t GoodRx’s first with a large PBM, pharmaceutical middlemen that negotiate rebates and fees with drugmakers, create drug formularies and reimburse pharmacies for prescriptions. Last year, the California-based company announced a similar deal with ExpressScripts, which is owned by health insurer Cigna.
Through the programs, “patients don't have to choose between using their pharmacy benefit or using GoodRx to save on their prescriptions — now they can do both right at the counter so they have confidence they are always paying the lowest available price,” GoodRx interim CEO Scott Wagner said in a statement Wednesday.
Along with expanding the availability of drug discounts to consumers, the programs are a source of revenue for GoodRx.
The company is paid through contracts with PBMs where it’s either paid a percentage of fees that PBMs charge to the pharmacy, or a fixed amount for every prescription that’s filled originating from its discounted pricing. GoodRx is generally paid more if its discount cards generate a higher volume of prescriptions over a payment period.
GoodRx also offers telehealth visits and other health services through a digital health platform.
As for the PBMs, giving patients access to lower discount card pricing means more prescription activity occurs inside the pharmacy benefit, resulting in a more complete claims record for beneficiaries.
CVS may also be creating a new fee stream.
Within GoodRx’s partnership with ExpressScripts, the company pays a marketing fee to the PBM since it’s acting as a distribution partner, according to DrugChannels.net.
It’s unclear whether the same arrangement is in place with the CVS deal. A spokesperson for GoodRx declined to share detailed financial terms of the partnership.
Consumers at the pharmacy counter are often surprised when the price negotiated by their health insurer is more expensive than paying with cash or swiping a discount card.
PBMs are taking the heat as drug prices continue to rise. Currently, multiple government entities, including the House Oversight and Accountability Committee and the Federal Trade Commission, are investigating PBMs over concerns their business practices — including complicated and opaque contracts and pricing models — are contributing to rising drug costs.
CVS Caremark is one of three major PBMs that control 80% of the prescription drug market. All three are owned by health insurers: Caremark by CVS, which owns payer Aetna; Express Scripts by Cigna and OptumRx by UnitedHealth, which owns payer UnitedHealthcare.