“What CVS CostVantage will do is over time, it will flatten that out to basically allow payors to have the benefits of our industry-leading cost of goods to get passed through in a more transparent fashion, and flatten out the reimbursement pressures over time.”

In context

“tation 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 open, please go ahead. Elizabeth Anderson: Hi guys, good morning, and thanks for the question. Maybe just to piggyback one more off of what Mike was just saying, is your expectation for those contracts, the commercial contracts that you’ve moved over for 1/1/25, that those would have flat margins versus 2024? Tom Cowhey: Yes, we’re not providing guidance at this point. Our expectation is to, as we’ve said over the long term, if you think about what’s happened with reimbursement pressure going all the way back to our analyst day, we’ve talked about how it’s been a headwind for retail for a very long time in this industry. What CVS CostVantage will do is over time, it will flatten that out to basically allow payors to have the benefits of our industry-leading cost of goods to get passed through in a more transparent fashion, and flatten out the reimbursement pressures over time. We haven’t provided 2025 guidance yet, but the expectation of CVS CostVantage is to really do that over time and provide a floor in retail. Karen Lynch: I might ask David to talk a little bit about how that’s translating on the PBM and the TrueCost and how that’s flowing all the way through. David, why don’t you take it? David Joyner : Yes, so Elizabeth, I think it’s important that you see both sides of the equation. There’s clearly recognition that there are pain points in today’s price model, so you have this average market basket pricing and what we see in cross-subsidization, so both what Prem is solving for on the retail side is exactly what we’re solving for in our TrueCost model with our clients. The fact is that we’re hitting what I believe are the issues head on by trying to driv”