GoodRx Holdings, Inc. (GDRX) shares are down more than 7% Tuesday after CVS Health (NYSE:CVS) announced a plan to deliver a more transparent and sustainable reimbursement model from pharmacy benefit managers and insurers.
The new approach from the company, named CVS CostVantage, is said to evolve the traditional pharmacy reimbursement model.
"CVS CostVantage will define the drug cost and related reimbursement with contracted pharmacy benefit managers (PBMs) and payors, using a transparent formula built on the cost of the drug, a set markup, and a fee that reflects the care and value of pharmacy services," the company said in its statement.
Pharmacy benefit managers like CVS Caremark operate as middlemen between insurers and drugmakers. However, they have faced scrutiny following surging healthcare costs. The move from CVS could take share from companies such as GDRX, which aims to help Americans find lower drug prices.
CVS shares are up around 4% at the time of writing on Tuesday. The company said it plans to launch CostVantage with pharmacy benefit managers for their commercial payors in 2025.
Furthermore, CVS also announced TrueCost, its model that will offer client pricing reflecting the true net cost of prescription drugs, providing visibility into administrative fees.
CVS believes the simplified pricing will help consumers be confident their pharmacy benefit is "providing the best possible price and will allow members to have stable access to our national pharmacy network."