Increasing generic and biosimilar competition to contain rising drug costs
Although prescription drug prices continue to rise, CVS Health's commercial PBM clients paid less for prescription drugs in 2016 compared with 2015.
Although prescription drug prices continue to rise, CVS Health's commercial PBM clients paid less for prescription drugs in 2016 compared with 2015. CVS Health uses several approaches to help drive down costs, including increasing competition from unbranded and generic alternatives to brand name drugs, which provide consumers more affordable options. According to CVS' 2016 Drug Trend Report, generic drugs had the largest deflationary impact on trend due to higher dispensing rates combined with low overall inflation and falling prices for most generics. Additionally, RAND Corporation estimated that the entry of biosimilar products into specialty markets could reduce spending on biologics by an estimated $44.2 billion over the next decade. There is potential for biosimilars to positively impact trend as much as generics have in traditional drug markets; however, at present there are only four FDA-approved biosimilars.