CVS to change how it prices prescription drugs - Here's what to expect

TheStreet's J.D. Durkin brings the latest business headlines from the floor of the New York Stock Exchange as markets close for trading Tuesday, December 5th.

Full Video Transcript Below:

J.D. DURKIN: I’m J.D. Durkin - reporting from the New York Stock Exchange. Stocks were mixed to close out today's session. The Dow closed down 73 points, the Nasdaq closed up three tenths of a percent, and the S&P closed fractionally lower. This comes after fresh data showed some signs of slowing in the labor market – job openings slipped to 8.7 million in October, down from 9.3 million in September. Investors are looking ahead to Friday’s crucial November jobs report for a clearer picture of the U.S. job market.

Turning to health care - CVS announced that it will change the way it prices prescription drugs. The company plans to implement a new system that will bring better transparency to how it prices medications and that will ultimately reduce costs for consumers.

The new model, called CVS Cost Vantage, will use a formula that includes how much a drug costs, a set markup, and a fee to determine how much a drug costs and what pharmacies will be reimbursed.

Of the new plan, CVS President and Chief Pharmacy Officer Prem Shah said quote “We are leading with an approach that will shift how our retail pharmacy is compensated by implementing a more transparent and sustainable model that fairly aligns pharmacy reimbursement to the quality services we provide. It provides our pharmacy benefit managers and payor clients a foundational step towards more pricing clarity for consumers.”

CVS says its new pricing system will go into effect on January 1, 2025.

That’ll do it for your daily briefing. From the New York Stock Exchange, I’m J.D. Durkin with TheStreet.