CLAIM #18431 · CVS Health Corp (CVS) · 2024Q2 earnings call · Aug 7, 2024 · due Jan 1, 2025
“Our intention is to move all of our commercial contracts, as I stated previously, to our CostVantage model.”
Tom Cowhey · CFO
In context
“and feel good about what we were able to accomplish. Operator: The next question comes from Michael Cherny from Leerink Partners. Michael, your line is open, please go ahead. Michael Cherny: Good morning, thanks for taking the question. Maybe to go back to Ann’s question and ask it from a different direction, seeing nice traction obviously on CostVantage, and the logic behind that is fairly sound. Is your intention, if you don’t get full compliance from the remaining almost 50% of the plans in place, that you’re going to have a dual reimbursement structure on the commercial side, and how exactly will that work functionally for the organization in terms of your pricing mechanisms, your sourcing, etc.? Tom Cowhey: Today we have multiple reference price models in the marketplace with payors. Our intention is to move all of our commercial contracts, as I stated previously, to our CostVantage model. It benefits both payors and us in the predictability and the way cost of goods are passed through, and provides predictable, what I would say is reasonable margins for the pharmacy as it relates to that. Our expectation is that we will move the commercial market over to this. We will still have a dual market, right, because the Medicare and Medicaid contracts still exist on another platform, and as we’ve said prior, we’re going to move the commercial marketplace over on 1/1/25 and follow that with the Medicare and Medicaid markets at some time in the future. From my perspective, we’ll be able to handle that, but our expectation is that we’re moving the commercial marketplace over for 1/1/25. Operator: The next question comes from Elizabeth Anderson at Evercore ISI. Elizabeth, your line is”
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SEC filings for CVS ↗ · Claim quote is verbatim from the 2024Q2 earnings call.