CVS chief: Don't blame us for higher drug prices

Industry middlemen are not behind rising drug prices in the United States, CVS Health CEO Larry Merlo said Wednesday. "Drug manufacturers want you to believe that increasing drug prices are a result of them happy to pay rebates and that PBMs are retaining these rebates. And this is simply not true," Merlo said on a conference call.

Industry middlemen are not behind rising drug prices in the United States, CVS Health CEO Larry Merlo said Wednesday. "Drug manufacturers want you to believe that increasing drug prices are a result of them happy to pay rebates and that PBMs are retaining these rebates. And this is simply not true," Merlo said on a conference call. "Our data showed that list price is increasing faster for drugs with small rebates than it is for medications with substantial rebates." CVS Health owns Caremark, one of the largest PBMs. Merlo said CVS expects about 3%, or $300 million, of its 2018 earnings will come from rebates it collects. According to Merlo, his company has generated billions of dollars in rebates—with the vast majority of those funds passed through to its clients, including insurers and groups that pay for medicines. Drug prices increased 0.2% for the company's clients on a per capita basis in 2017. CVS also reported on Wednesday that is second-quarter revenue increased 2.2% to $46.71 billion. The company posted a loss of $2.56 billion for the quarter, versus a profit of $1.1 billion a year.