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Building a simplified reimbursement model for retail pharmacy

CVS Pharmacy® is building a clear, more transparent and sustainable model for retail pharmacy with CVS CostVantage®

A CVS Pharmacy technician collecting prescriptions from pharmacy shelves.

Delivering trusted, local and accessible care

 

An icon of a pharmacy with a CVS heart on the front.

Retail pharmacies do more than fill prescriptions and patients increasingly rely upon their local pharmacists to help bridge the gap between provider visits. Pharmacists provide medication access and support along with convenient and timely care, which is more critical than ever as the U.S. population continues to age.

90% of consumers

said they trust their local pharmacist/pharmacy team*

Nearly 1 in 3 Americans

visit their local pharmacy at least once per week*

7 in 10 people

said they prefer pharmacies for their health care needs because of the convenient locations with evening and weekend hours*

Navigating market complexity and increasing costs

Health care is complicated and costs are rising. Retail pharmacies were historically reimbursed using a market-basket approach, but cross-subsidization is no longer sustainable given market factors like wage pressures and increasing drug costs.

A CVS Pharmacy technician reviewing a prescription in the pharmacy.

PBMs and payers want a local, vibrant pharmacy network to serve their members… Maintaining the status quo is no longer an option. Real change is needed.

Prem Shah,

EVP & Group President at CVS Health® 

Introducing simplicity and transparency to pharmacy reimbursement

Cost basis plus dispensing fee

Our simple formula

With CVS CostVantage, our retail pharmacy will define reimbursement based on a transparent formula built on the underlying cost of the drug plus a dispensing fee tied to the care and value we provide.

Supporting greater reimbursement transparency

Helping bring greater clarity to pharmacy reimbursement

CVS CostVantage® uses a cost-based reimbursement model designed to support greater transparency and predictability in pharmacy pricing.

By combining a straightforward reimbursement approach with measurable savings outcomes, CVS CostVantage® helps PBMs better understand pharmacy costs while supporting access to medications for the patients they serve.

A CVS Pharmacy technician talking to a patient picking up a prescription.
A CVS heart icon.

$180M

in generic drug savings*

  • *FOR RETAIL PHARMACY STATS: The research was conducted online in the United States as part of the CVS Health® Dimensions of Health Care study. The Harris Poll surveyed 4,007 U.S. adults ages ​18+, 203 U.S. Family/General Practice and Internal Medicine Physicians, and 202 U.S. ​retail, hospital and independent pharmacists. The survey was conducted from ​March 9–20, 2023.

  • *FOR $180 MILLION IN GENERIC DRUG SAVINGS: CVS CostVantage® generated approximately $180 million in generic drug savings during 2025. Source: CVS Pharmacy internal analysis, 2025.