CVS Caremark Employer Survey

CVS Caremark recently published the results of their 2010 employer survey.

• 94% will seek opportunities to improve savings more WHILE looking for ways to improve the overall member experience
• They ranked the following as key priorities in their PBM procurement strategy:
  • 86% price
  • 86% customer service
  • 84% trust and reliability
  • 46% consumer engagement capabilities
• 48% were considering implementing a step therapy program (generic before a brand)
• 56% were considering a copay waiver to drive adoption of generic drugs

As a consultant and vendor in the consumer engagement space, this is great. Let’s look at these incrementally:

• Price is the standard competitive space. This is already playing out and potentially accelerating with the direct to employer approach of Wal-Mart and Walgreens.
• Customer service is a critical foundation item for both the PBM call center and mail order operations. And, consumer engagement can impact customer service as PBMs learn to predict behavior and proactively engage consumers using segmentation, personalization, and preference-based marketing.

That leaves consumer engagement as a key opportunity for differentiation. And, it plays well to the overall comment about improving savings while improving the member experience. Consumers don’t understand their plan designs. They don’t understand when to act. They don’t understand the importance of adherence.

So, this creates a big opportunity. PBMs can engage consumers to improve 90-day utilization (retail or mail), shift patients to designated pharmacies (retail, mail, specialty), improve generic fill rate (e.g., copay waiver), improve adherence, and allow employers to be more aggressive in their plan design (e.g., step therapy).

In general, the survey was a good reinforcement, but it doesn’t show much in terms of changes in client’s interests. The one thing that did surprise me was that last year 74% said reducing costs was their number one measure of success and this year it was only 66%.