Aetna's headquarters in Hartford, Connecticut. Credit: JHVEPhoto.com/Adobe Stock
Executives at CVS Health — the parent of Aetna and the Caremark pharmacy benefit manager business — never even used the word "employer" Wednesday during a conference call the company held to go over earnings for the third quarter with securities analysts.
CVS reported that enrollment in the self-insured employer health plans that Aetna administered increased to 15.3 million at the end of the quarter, from 14.2 million at the end of the third quarter of 2024.
But the employer plan business appears to be doing well enough that CVS executives are focusing on other matters.
They spent most of the conference call talking about the performance of the company's 9,000 drug stores, concerns about Aetna's Medicare plan business and the future of Caremark.
The executives referred indirectly to employers when talking about the health plan sponsors that use Caremark PBM services.
Brian Newman, the CVS chief financial officer, said growth in adjusted operating income at Caremark will probably be below 10% in 2026.
That's due mainly to the changes in the kinds of contracts health plan sponsors are negotiating with PBMs, according to David Joyner, the CVS chief executive officer.
Newman noted that another challenge is that Caremark had trouble increasing charges quickly enough in the third quarter to compensate for increases in its costs.
Prem Shah, the executive vice president, said CVS sees two major strategies it can slay the prescription drug cost dragons and keep plan sponsors interested in using PBMs.
One is supporting use of "biosimilars," or competitors to very expensive biological drugs.
"There's $100 billion of biosimilars going by the end of this decade," Shan said. "So, we continue to look at ways in which we can enable and drive down costs for our customers as it relates to biosimilars."
CVS believes use of artificial intelligence technology will help Caremark hold down costs by identifying patients who have been using very expensive biological drugs and are good candidates for use of relatively low-cost biosimilars.
CVS streamed the call live on the web and posted a recording on its website.
TrumpRx.gov: CVS has announced that it expects to support the new Trump administration fertility drug access program by providing prescription pickup points and education services for consumers who buy certain fertility drugs directly from the manufacturer.
Joyner said he thinks the effort to promote direct-to-consumer drug sales will help lower the cost of brand-name drugs and be good for patients and the CVS business model.
"By tackling branded pharmas and equitable pricing strategies that have left Americans carrying the financial weight of global drug innovation, the government is helping to relieve a long-standing burden on U.S. consumers and businesses," Joyner said. "We believe that over time, the administration's actions can create a new lower ceiling price in the U.S. in which PBMs will continue to negotiate and further reduce costs for their customers and consumers."
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