CVS Caremark appoints Ed DeVaney as president

Photo: Mario Tama/Getty Images

CVS Health has named Ed DeVaney president of the company’s CVS Caremark pharmacy benefits manager business, CVS announced this week.

DeVaney ascends to the top post after having been named interim president in December, and will report to Prem Shah, group president of CVS Health.

“Ed’s ability to build and grow a strong team culture, while prioritizing talent development, leads to strong business results,” said CVS Health President and CEO David Joyner. “His commitment shows every day in his deep understanding of our industry, his advocacy for our business, and a proven track record of anticipating and solving client needs.”

WHAT’S THE IMPACT

DeVaney joined CVS Health in 2005, spending most of his career in CVS Caremark and Aetna. Most recently he led CVS Caremark sales and account management as president, Employer & Health Plans, where he was responsible for growing and retaining the customer base across the PBM’s lines of business, including government services and coalitions.

He was also responsible for the PBM marketing team, CVS said.

Before joining CVS Health, DeVaney managed client relationships at Hewitt Associates, focusing on healthcare consulting and benefits administration.

The announcement comes on the heels of a Q4 earnings report that saw CVS Health’s profits take a dip year-over-year, with the company reporting $1.6 billion in profits in Q4 2024, down from the $2 billion it brought in at the end of 2023. Profits for the full year hit $4.6 billion – a sizable hit from the $8.3 billion in profit CVS earned the year before.

Joyner and CFO Tom Cowhey pinned much of the performance struggles on elevated medical costs hitting CVS insurer Aetna. During the quarter, the medical loss ratio was 94.8%, a year-over-year increase of more than 6%. MLR for the full year was 92.1%, up from 86.2% the year prior.

As well as higher utilization, Aetna was hit by poor Medicare Advantage star ratings, as well as changes to the Medicaid payment mix following the redeterminations process.

THE LARGER TREND

Last month the Federal Trade Commission released a report suggesting the “Big 3” pharmacy benefit managers – CVS Caremark, Express Scripts and OptumRx – mark up specialty drugs at their affiliated pharmacies by hundreds or even thousands of percent.

Such significant markups allowed the largest three PBMs and their affiliated specialty pharmacies to generate more than $7.3 billion in revenue from dispensing drugs in excess of the drugs’ estimated acquisition costs from 2017-2022, the report found.

These PBMs netted significant revenue at a time when patient, employer and other healthcare plan sponsor payments for drugs steadily increased on an annual basis, the FTC said.

The American Medical Association released data in September showing that the four largest pharmacy benefit managers in the country control roughly 70% of the national market. The analysis, based on 2022 data on commercial and Medicare Part D prescription drug plan (PDP) enrollees, also found a high prevalence of vertical integration of PBMs with health insurance companies.

CVS Health is the largest PBM (with a 21.3% market share), followed by OptumRx (20.8%), Express Scripts (17.1%) and Prime Therapeutics (10.3%).
 
ON THE RECORD

“I am honored to take on this role and to work with our dedicated colleagues who are focused on making prescription drugs more affordable and delivering better care to everyone we are privileged to serve,” said DeVaney. “The role of PBMs has never been more critical in achieving affordability and access to medicine in our country, and our drive to greater drug pricing transparency through innovation has never been more needed.”

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.