Dive Brief:
- CVS Health’s pharmacy benefit manager Caremark reached an agreement with Danish drugmaker Novo Nordisk to give its weight loss drug Wegovy preferred access on Caremark’s standard formulary, which covers tens of millions of Americans. The deal should increase access to Wegovy at the expense of other therapies, such as Eli Lilly’s Zepbound.
- The news was announced in tandem with CVS’ first quarter results, which exceeded investor expectations and represent a turnaround for CVS’ beleaguered insurance business, analysts said. The Rhode Island-based healthcare company reported net profit of $1.8 billion — up 60% year over year — on revenue of $94.6 billion.
- CVS Health’s insurance division Aetna will also stop offering plans for individuals on the Affordable Care Act exchanges in 2026, after the company projected big losses in the business this year.
Dive Insight:
CVS’ deal with Novo Nordisk is a major shakeup in the lucrative market for obesity drugs — and a blow to rival drugmaker Eli Lilly, which also manufactures GLP-1 medications like Zepbound.
On July 1, Caremark will no longer prefer Zepbound in its standard formulary, replacing the drug instead with Novo Nordisk’s Wegovy.
As a result, Zepbound will likely cost more for Caremark clients to cover on their prescription drug plans, while Wegovy will cost less. Patients currently taking Zepbound will be able to transition to Wegovy, a CVS spokesperson said.
It’s a significant move in the coverage landscape for GLP-1s, which can spur significant weight loss but are significantly expensive, with prices surpassing $1,000 each month before discounts. Cost concerns have kept many insurers and employers from covering the drugs and, along with shortages of the medications, stymied access for many Americans.
“Now that both Zepbound and Wegovy are available in adequate supply, CVS Caremark was able to do what PBMs do best: compete clinically similar products against one another, and choose the option that delivers the lowest net cost for our clients,” the CVS spokesperson said.
The spokesperson did not comment directly on how much in savings Caremark negotiated for Wegovy, but said that Caremark passes along more than 99% of all rebates to its clients.
At this time, CVS is not forecasting any major earnings boost from the deal. But it could help Caremark by enticing more clients to the PBM’s weight management program, which pairs GLP-1 access with lifestyle and clinical support.
CVS’ pharmacy business — the largest retail drugstore chain in the nation — should also benefit. Novo Nordisk has selected CVS Pharmacy to sell Wegovy for $499, or less than half its list price, to cash-paying customers.
“It’s unknown at this point how the migration from the compounded pharmacies into other pharmacy settings are going to occur but we do expect there will be obviously some benefit by opening up 9,000 stores, 9,000 opportunities for patients to get the medication,” CEO David Joyner told investors on a Thursday morning call.
The deal comes as part of a larger program Novo Nordisk launched earlier this week that includes partnerships with telehealth companies like Hims & Hers to sell Wegovy at a lower price.
Novo Nordisk’s stock was up about 2% while Eli Lilly’s stock fell more than 11% following the news.
However, during a Thursday morning call to discuss its own first quarter earnings, Eli Lilly’s CEO Dave Ricks appeared to brush off CVS and Novo Nordisk’s partnership, saying that the drugmaker is focused on its direct relationships with consumers instead of deals with middlemen.
“The private pay market is an important segment. We’d like to grow that segment, and we’d like to grow choice and access in that segment. So we’re not interested at all in deals reducing access and choice for doctors and patients,” Ricks told investors.
