CVS Health Drives Drug Affordability by Promoting Competition

CVS Health CVS is off to a strong start in the 2026 Pharmacy Benefit Manager (“PBM”) selling season, with Caremark dominating in this highly competitive marketplace. The unit is tracking in line with its historical upper 90% retention rate. Caremark has a long history of driving down prescription and pharmacy costs by increasing competition.

Recently, it partnered with Novo Nordisk to significantly increase access to Wegovy, a GLP-1 drug, for its members at a more affordable price. On July 1, CVS Health took a formulary action to prefer Wegovy, removing Eli Lilly’s weight management drug Zepbound from the Standard Control, Advanced Control and Value formularies. Furthermore, CVS also pairs the medication with its weight management program, where participants have achieved double-digit % weight loss at 12 months, regardless of the drug they use.

Weight management drugs like the GLP-1 can significantly improve health outcomes, but their exorbitant prices often limit access for many. CVS expects its decision could save an estimated 10-15% year over year in the anti-obesity medication space for members using its template formularies.

Last year, Caremark removed Humira from all its major national commercial template formularies, driving the use of Humira biosimilars instead. These alternatives, which have no clinically meaningful difference from their reference product, represent one of the biggest opportunities for reducing drug costs for employers and consumers. The move has already generated more than $1 billion in savings for CVS clients.

Effective Jan. 1, 2026, CVS will begin providing outpatient prescription drug benefits for approximately 587,000 CalPERS members enrolled in Basic or Medicare HMO and PPO plans. The five-year contract emphasizes CVS’ ability to deliver affordable drug benefits and its commitment to performance guarantees in key areas such as managing pharmacy cost trends and ensuring clinical quality.

Latest Developments From CVS Competitors

UnitedHealth Group’s UNH Optum Rx has raised reimbursement minimums for branded drugs for approximately 2,300 independent pharmacies nationwide, those not affiliated with a pharmacy services administrative organization, chain or other entity. This move, which went into effect on Sept. 1, 2025, will support the long-term sustainability of pharmacies, which play a critical role in patient care. 

Amazon AMZN recently announced the expansion of its third-party logistics product, Amazon Multi-Channel Fulfillment (“MCF”), to support merchants on SHEIN, Shopify and Walmart. By leveraging one shared inventory pool with Fulfillment by Amazon, Amazon MCF empowers businesses to simplify their fulfillment, increase sales through existing channels and quickly launch in new online stores.

CVS Stock Performance, Valuation and Estimates

Year to date, CVS Health shares have surged 67.4% against the industry’s 1% fall. 

CVS Health is trading at a forward five-year price/earnings (P/E) of 10.87X, lower than the industry average of 15.05X. The stock has a Value Score of A.

Here’s how analyst estimates for the company’s 2025 and 2026 presently stand. 

CVS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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