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CVS Caremark — CVS Health’s pharmacy benefits manager (PBM) — unveiled a platform to help its payer clients sift through digital therapeutic tools and choose effective solutions to embed into their plans. Traditionally, PBMs have been responsible for administering prescriptions and negotiating the costs of drugs for large employers and health insurers.
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Now, CVS Caremark is bringing that same model to digital health, enabling payers to formalize the reimbursement and distribution of digital therapeutics and allowing CVS to capitalize on booming interest in digital health treatments.
Here’s what it means: The platform should dull headaches that arise when payers have to cherry-pick digital therapeutics from a wide pool of options.
- CVS’ health plan clients will have access to a selection of previously assessed digital therapeutics so they can choose the tools that will give them the highest return. CVS plans to include solutions that are on par with clinical and security guidelines and receive good customer satisfaction scores, per MedCity News. This should come as good news to payers since digital health tools with lofty health benefit promises often go unevaluated: Only a sliver of health apps can boast evaluated clinical effectiveness, for example.
- And the platform will standardize a slew of complex processes. Health plan clients can now access negotiated pricing, verify member eligibility, and more simply navigate the payments process. Streamlining these processes can help payers get ready for the forthcoming digital therapeutics explosion: The digital therapeutics market’s estimated to grow 21% annually from 2018 to exceed $7.8 billion by 2025.
The bigger picture: We expect PBMs to keep tweaking their business models to tap into spiking demand for digital treatments — and digital health companies also stand to gain from the pivot.
- CVS Caremark rival Express Scripts also recently announced changes to its PBM model to facilitate the use of digital tools in health plans. Express Scripts announced last month that it’s getting ready to roll out the industry’s first digital health formulary to steer payers toward the best possible tech. Together, Express Scripts and CVS lay claim to 53% of the PBM market share in the US, per Drug Channels Institute. With two of the US’ top PBMs doubling down on digital standardization, it’s likely we’ll see other players follow suit.
- This is a huge opportunity for digital therapeutics companies looking to scale their products and expand their consumer bases. CVS tapped San Francisco-based Big Health, which offers a sleep improvement program dubbed Sleepio, as its first partner. The company currently serves 12 million people — but a deal with CVS could open it up for huge growth since CVS covers 90 million members.
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