CVS Health changing how its prescription drug pricing works

FILE - A CVS store sign is displayed in Pittsburgh on Feb. 3, 2023. CVS Health is introducing changes to how its prescription drug pricing model works, and that could lead to some savings for customers starting next year.
The health care giant said Tuesday, Dec. 5, 2023 that it will role out a new reimbursement model designed to make costs more predictable at the drugstore counter. (AP Photo/Gene J. Puskar, File)
FILE - A CVS store sign is displayed in Pittsburgh on Feb. 3, 2023. CVS Health is introducing changes to how its prescription drug pricing model works, and that could lead to some savings for customers starting next year. The health care giant said Tuesday, Dec. 5, 2023 that it will role out a new reimbursement model designed to make costs more predictable at the drugstore counter. (AP Photo/Gene J. Puskar, File)

CVS Health is introducing changes to how its prescription drug pricing model works, and that could lead to some savings for customers starting next year.

The health care giant said Tuesday it will roll out a new reimbursement model designed to make costs more predictable at the drugstore counter. The company will start offering it next year to some third-party cash discount card administrators.

Cash discount cards like those offered by GoodRx can give customers a price break on out-of-pocket costs for some prescriptions, depending on the person's coverage and the drug.

CVS Health drugstores will start using the company's new CostVantage model more broadly in 2025. It is designed to make drug costs more transparent. It involves a formula based on the cost of the drug, a set markup and then a fee for filling the prescription.

CVS Health runs one of the nation's largest drugstore chains and a large pharmacy benefit management business that operates prescription drug coverage for big clients like insurers and employers.

It also sells health insurance through its Aetna arm, and the company has been providing a growing amount of care through its drugstores and clinics.

The company also announced Tuesday a 10 percent hike in its quarterly dividend and laid out its forecast for next year. CVS Health expects adjusted earnings of at least $8.50 per share. It also forecasts total revenue of at least $366 billion.

Analysts expect earnings of $8.51 per share on $344.5 billion in revenue, according to FactSet.

Edward Jones analyst John Boylan said in an email that he saw the stronger-than-expected revenue guidance and dividend hike as a "show of confidence by management."