NEW YORK (Reuters) - CVS Health Corp (CVS.N) said on Tuesday its pharmacy benefit customers spent about 5 percent more on prescription drugs in 2015 than in 2014, a year when drug spending jumped nearly 12 percent.
The No. 2 U.S. drugstore chain attributed the lower increase to careful management of its coverage plans, saying it negotiated with pharmaceutical makers for rebates and discounts and had more selective coverage that excluded pricey drugs.
It also said fewer new high-priced specialty drugs hit the market in 2015 and that inflation in branded drugs for high volume disorders like diabetes had one of the biggest impacts on spending.
Drug spending in 2014 was boosted in part by a pricey new hepatitis C treatment from Gilead Sciences (GILD.O), CVS said. In 2015, AbbVie Inc’s ABBV.O competing product hit the market and is estimated to have nearly halved the price of Gilead’s treatment.
CVS Chief Medical Officer Troyen Brennan said that the 2015 overall drug price trend would have been nearly the same as in 2014 if it had not made changes to its main coverage plan, called a formulary, or negotiated such steep discounts.
Drug companies have a list price but typically provide discounts and rebates to large buyers.
One drug Brennan called out as particularly pricey was Valeant Pharmaceuticals’ (VRX.N) Jublia, a toenail fungus treatment whose cost trend for customers rose 950 percent during the year, reflecting a combination of increased use and price. A cheaper oral medication that has better clinical results is preferred, he said.
Valeant has been criticized for raising prices of its treatments sharply and for using a pharmacy that used aggressive tactics to push sales of its drugs.
(This version of the story corrects eighth paragraph to show Jublia increase was utilization and price, not price alone)
Reporting by Caroline Humer; Editing by Tom Brown