The numbers appear to show a clear advantage for CVS Caremark in managing drug trend—the change in prescription drug expenditures of plan sponsors. The gap is biggest for specialty drugs, which is the fastest growing part of spending.
However, a deeper look shows that the trend figures are effectively non-comparable. The uncomfortable reality is that we can’t tell which PBM is actually the best at managing trend for plan sponsors.
Read on for the data and wonky explanation.
Here is a summary of 2010 trend as reported by each of the big 3 PBMs.
Golly, sure looks like CVS Caremark is awesome, right?
Not so fast. Each PBM computes trend in a different way using different samples. For instance:
- CVS Caremark computes trend on a per-member, per-month basis using a sample of 23 million members representing employers, Health Plan and Medicaid segments, but excluding Medicare Part D.
- Express Scripts computes trend based on per-member, per-year basis using a random sample of four million members who had prescription-drug coverage in both 2009 and 2010. The calculations exclude Medicaid and Medicare Part D plans, Managed Medicare Prescription Drug Plans (PDPs), and Medicare Advantage Prescription Drug Plans (MAPDs).
- Medco computes trend on a per-household, per-month basis using a sample of 248 clients representing approximately 56% of consolidated drug spending. A household could include multiple members who are covered under the same plan. Clients with enrollment changes greater than 50% were excluded from the analysis. (?) There is no disclosure of how many plan members or households are included in the sample.
- CVS Caremark: “gross cost per day,” which they define to be “the sum of member cost and client cost (after discounts to AWP).”
- Express Scripts: "Cost includes ingredient costs, taxes and administrative fees minus rebates."
- Medco: "Plan spending comprises the net cost to plan sponsors less discounts, rebates, subsidies, and member cost share."