North Carolina Department of State Treasurer Announces Successful Negotiation with CVS Caremark

The North Carolina Department of State Treasurer and CVS Caremark (Caremark) have successfully reached an agreement regarding their ongoing contract dispute, securing hundreds of millions of dollars on behalf of the members of the State Health Plan (Plan). This agreement provides certainty to both parties around pharmacy pricing and payments. Additionally, this agreement gives the Plan the ability to negotiate directly with manufacturers of GLP-1s to potentially restore coverage of weight-loss medications to members.

"The commitments we were able to secure from Caremark represent a monumental win for the members of the State Health Plan," said State Treasurer Brad Briner. "I am grateful to the State Health Plan board, staff, and all of the partners that helped strengthen our relationship with an important partner to deliver reliable and affordable medications to members of the Plan."

In an effort to increase transparency, the agreement requires additional reporting by CVS and allows the Plan increased visibility into where state tax dollars are going. The Plan will retain control and flexibility of the formulary, which will provide a path forward to achieve goals around value, cost effectiveness and better health outcomes.

"We are grateful to the state for their partnership and are honored to continue working on behalf of North Carolina's teachers and public employees to lower their prescription drug costs," said Ed DeVaney, President, CVS Caremark. "We remain laser focused on lowering drug costs, delivering value, driving innovation and providing transparency across our customers' pharmacy benefit."

CVS Caremark has been the pharmacy benefit manager for the Plan since Jan. 1, 2017. The current contract's term is set to expire on Dec. 31, 2027. The Plan provides benefits for over 750,000 state employees, retirees and their dependents. The Plan prioritizes providing reliable access to affordable medication and services to its members. Under this new agreement, members will have no disruption in their service.

"We walked into a difficult situation this year at the State Health Plan, and this is another step toward increasing value and transparency for our members and taxpayers," said Thomas Friedman, Plan Executive Administrator. "We think this sets the stage to further honor the treasurer's commitments to improving efficiency, improving health, and aligning incentives with partners."

With this negotiation now complete, additional thanks should be extended to former treasurer Dale Folwell, Attorney General Jeff Jackson, and Auditor Dave Boliek for their assistance in this process.

The State Health Plan had anticipated this settlement when premiums were set in August. With this agreement, premiums will not be affected in the coming year.

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