CVS Caremark Expands Biosimilar Adoption Through Formulary Updates to Improve Affordability and Access

Rhea-AI Summary

CVS (NYSE: CVS) will update its most common commercial template formularies effective July 1, 2026 to prefer FDA‑approved biosimilars, including interchangeable options, to expand access and lower costs. Key moves include transitioning Stelara (ustekinumab) to biosimilars Pyzchiva and Yesintek and broader specialty category coverage.

The changes aim to reduce member out‑of‑pocket costs (most members may pay $0) and deliver client savings while providing communications and clinical support for transitions.

AI-generated analysis. Not financial advice.

Positive

• Effective July 1, 2026 preference for interchangeable biosimilars on common commercial templates
• Most members may pay $0 out‑of‑pocket for transitioned Stelara therapies
• Expanded biosimilar coverage across specialty categories including multiple sclerosis and rare blood disorders
• Planned proactive outreach, educational resources, and clinical support for members and providers

Negative

• Some members will likely need to transition from reference biologics to preferred biosimilars, creating potential care disruption
• Plan sponsors that customize templates may not adopt changes universally, limiting immediate scope of savings

News Market Reaction – CVS

-1.61%

19 alerts

-1.61% News Effect

+4.9% Peak in 3 hr 14 min

-$1.86B Valuation Impact

$113.52B Market Cap

0.3x Rel. Volume

On the day this news was published, CVS declined 1.61%, reflecting a mild negative market reaction. Argus tracked a peak move of +4.9% during that session. Our momentum scanner triggered 19 alerts that day, indicating notable trading interest and price volatility. This price movement removed approximately $1.86B from the company's valuation, bringing the market cap to $113.52B at that time.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

2025 Revenue: $402.1 billion Operating cash flow: $10.6 billion Capital returned: >$3.0 billion +5 more

8 metrics

2025 Revenue $402.1 billion Company revenue highlighted in 2026 proxy statement

Operating cash flow $10.6 billion 2025 operating cash flow from proxy statement

Capital returned >$3.0 billion Capital returned to stockholders in 2025 per proxy

Vanguard ownership 95,598,528 shares (7.51%) Beneficial ownership reported on Schedule 13G as of 03/31/2026

Member out-of-pocket $0 Most members’ Stelara biosimilar therapy cost after formulary change

Shah stock options 161,676 options at $71.82 Grant to Prem S. Shah, exercisable starting 03/31/2027

CFO stock options 125,748 options at $71.82 Grant to CFO Brian Newman, vesting from 03/31/2027

CEO RSU award 86,326 RSUs at $71.82 Restricted stock units granted to J. David Joyner

Market Reality Check

Price: $90.55 Vol: Volume 5,239,789 vs 20-da...

low vol

$90.55 Last Close

Volume Volume 5,239,789 vs 20-day average 7,633,825 (about 31% lighter, relative 0.69). low

Technical Price $82.01 is trading above 200-day MA at $75.69, and about 3.69% below the 52-week high of $85.15.

Peers on Argus

CVS was roughly flat (-0.1%) while peers were mixed: CI -1.29%, ELV +0.17%, HUM ...

CVS was roughly flat (-0.1%) while peers were mixed: CI -1.29%, ELV +0.17%, HUM +1.62%, CNC +1.02%, MOH +1.63%. No broad, same-direction sector move is evident.

Historical Context

5 past events · Latest: Apr 24 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Apr 24	Process improvement update	Positive	-1.2%	Aetna reported faster, more standardized prior authorization processing metrics.
Apr 08	Provider survey results	Positive	+0.7%	Aetna shared provider optimism and automation gains in prior authorization.
Apr 06	Earnings call notice	Neutral	-0.3%	Announcement of Q1 2026 earnings conference call timing and webcast details.
Apr 01	Business divestiture step	Neutral	+0.9%	Omnicare entered an asset purchase agreement as stalking horse in sale process.
Mar 30	Store expansion	Positive	+0.1%	Opening of first pharmacy-only Chicago site and plans for additional locations.

Pattern Detected

Recent operational and strategic news has usually seen modest, directionally aligned price moves, with one instance of a negative reaction to positive process-improvement news.

Recent Company History

Over the past few months, CVS-related news has focused on operational improvements and strategic initiatives. On Mar 30, 2026, CVS highlighted new pharmacy-only locations and modestly gained on the day. Early April brought Omnicare’s court‑supervised sale process and a provider survey from Aetna, both followed by small positive price moves. An April 24 update on simplifying prior authorization saw a -1.17% reaction, while an upcoming Q1 2026 earnings call notice on Apr 6 coincided with only a slight move. Today’s biosimilar formulary expansion fits this pattern of operational, cost-focused news.

Market Pulse Summary

This announcement centers on CVS Caremark’s move to prefer lower-cost, often interchangeable biosimi...

Analysis

This announcement centers on CVS Caremark’s move to prefer lower-cost, often interchangeable biosimilars, with most affected members paying $0 out-of-pocket for certain therapies. It builds on recent CVS initiatives to streamline access and manage drug costs. Historically, similar operational updates have led to modest, mixed price reactions. Investors may watch how these formulary changes influence prescription mix, client savings, and overall performance metrics such as the $402.1 billion in 2025 revenue and $10.6 billion in operating cash flow highlighted in recent filings.

Key Terms

biosimilars, interchangeable, formulary, u.s. food and drug administration (fda), +4 more

8 terms

biosimilars medical

"updates to its most common commercial template formularies that will expand the use of lower-cost biosimilars"

Biosimilars are medicines made to be highly similar to an already approved biological drug produced from living cells, with no meaningful differences in safety or effectiveness. They matter to investors because they introduce lower‑cost competition to expensive biologic treatments—similar to how generic drugs compete with brand drugs—but involve more complex manufacturing, regulatory review and patent risk, which can affect market share, pricing and profit margins across the sector.

interchangeable medical

"prefer interchangeable biosimilars over select reference brands"

Interchangeable describes two products, securities, or components that can be substituted for one another without changing how they perform, how regulators treat them, or how investors value them. For investors this matters because interchangeability can increase competition, pressure prices, reduce supply risk, and raise the likelihood that one offering will take market share from another—think of it like two brands of the same battery that fit and last the same time.

formulary technical

"What changes are CVS Caremark making to its formulary?"

A formulary is a list of prescription drugs that a health insurer, hospital system, or government program has approved for coverage and payment. Think of it like an approved menu or shopping list that determines which medicines patients can get with financial help. For investors, formulary placement affects a drug maker’s potential sales, pricing power and market access, so being included—or excluded—can materially change a company’s revenue outlook.

u.s. food and drug administration (fda) regulatory

"increase adoption of U.S. Food and Drug Administration (FDA)-approved biosimilars"

The U.S. Food and Drug Administration (FDA) is a government agency responsible for protecting public health by ensuring the safety and effectiveness of food, medicines, vaccines, and other health-related products. For investors, the FDA’s decisions can significantly impact companies in the healthcare and food industries, as approval or rejection of products can influence a company's success and stock performance.

pharmacy benefit manager financial

"A formulary is a list of prescription medications available under a health plan, managed with the support of a pharmacy benefit manager."

A pharmacy benefit manager (PBM) is a company that manages prescription drug plans for health insurance providers, employers, and other organizations. They negotiate prices with drugmakers, decide which medicines are covered, and handle the distribution of prescriptions. For investors, PBMs are important because they influence healthcare costs and profit margins in the pharmacy industry.

prior authorization technical

"to simplify prior authorization to speed access to care"

Prior authorization is a process where a health insurance company requires approval before covering certain medical services or medications. It functions like a pre-approval step, ensuring that the treatment is necessary and appropriate before expenses are paid. For investors, understanding prior authorization is important because delays or denials can impact healthcare costs, provider operations, and the financial stability of related companies.

stock options financial

"he received a grant of 161,676 stock options with a $71.82 exercise price"

Stock options are agreements that give a person the right to buy or sell a company's stock at a specific price within a certain time frame. They are often used as a reward or incentive, similar to a coupon that can be used later if the stock price rises, allowing the holder to make a profit.

restricted stock units financial

"25,062 shares of restricted common stock, awarded as restricted stock units"

Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.

AI-generated analysis. Not financial advice.

New changes expected to deliver significant client savings while maintaining rigorous clinical standards

WOONSOCKET, R.I., May 5, 2026 /PRNewswire/ -- CVS Health (NYSE: CVS) today announced updates to its most common commercial template formularies that will expand the use of lower-cost biosimilars across multiple therapeutic categories, including changes effective July 1, 2026, that will prefer interchangeable biosimilars over select reference brands.

What changes are CVS Caremark making to its formulary?

Effective July 1, 2026, CVS Caremark® will implement targeted updates to its most common commercial template formularies to increase adoption of U.S. Food and Drug Administration (FDA)-approved biosimilars with no clinically meaningful differences from the reference product and, in many cases, designated as interchangeable.

As part of these updates, CVS Caremark will transition from Stelara® (ustekinumab) on its most common commercial template formularies to preferring lower-cost, interchangeable biosimilar alternatives— Pyzchiva® and Yesintek®. With this change, most members will pay $0 out-of-pocket for their therapy.

Why is CVS Health expanding its use of biosimilars?

"Our formulary plays a critical role in addressing rising drug costs without compromising clinical quality," said Joshua Fredell, PharmD, SVP, CVS Health. "Expanding adoption of FDA‑approved biosimilars allows us to deliver significant savings for clients while supporting broader, more affordable access to proven therapies."

How will these changes expand access to lower-cost, interchangeable biosimilars therapies?

In addition to changes involving Stelara, CVS Caremark is expanding biosimilar coverage across select specialty categories, including treatments for multiple sclerosis and rare blood disorders, such as biosimilar alternatives to therapies like Tysabri® (with biosimilars Briumvi® and Tyruko®) and Soliris® (biosimilar Epysqli®). These biosimilars meet the same FDA standards for safety, effectiveness, and quality as their reference products and, where applicable, are designated as interchangeable, offering a more affordable option for patients and plan sponsors.

These updates are part of CVS Caremark's broader formulary strategy, which prioritizes:

• Affordability: Leveraging competition to reduce net drug costs
• Access: Expanding availability of clinically appropriate treatment options
• Value: Supporting long-term sustainability for clients and members

What is a formulary and how does it impact patients?

A formulary is a list of prescription medications available under a health plan, managed with the support of a pharmacy benefit manager. CVS Caremark regularly evaluates its template formularies — which plan sponsors may adopt or customize based on the needs of their populations — to help support member access to clinically appropriate treatments, as evaluated by an independent Pharmacy & Therapeutics committee, while helping manage overall drug costs for clients and the members they serve.

How is CVS Caremark supporting clients and members through these changes?

CVS Caremark will provide advanced communication and support to clients, consultants, providers and members to help ensure a smooth transition to preferred therapies. These efforts include proactive outreach, educational resources, and clinical support programs.

These formulary updates are one component of CVS Health's ongoing efforts to address rising prescription drug costs and improve access to affordable medications for the millions of Americans it serves.

About CVS Health
CVS Health is a leading health solutions company building a world of health around every consumer, wherever they are. As of December 31, 2025, the Company had approximately 9,000 retail pharmacy locations, more than 1,000 walk-in and primary care medical clinics and a leading pharmacy benefits manager with approximately 87 million plan members. The Company also serves an estimated more than 37 million people through traditional, voluntary and consumer-directed health insurance products and related services, including highly rated Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan. The Company's integrated model uses personalized, technology driven services to connect people to simply better health, increasing access to quality care, delivering better outcomes, and lowering overall costs.

Media Contact:
Phil Blando Phillip.Blando@cvshealth.com

 

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SOURCE CVS Health

FAQ

What formulary changes is CVS making effective July 1, 2026 (CVS)?

CVS will update common commercial template formularies to prefer FDA‑approved biosimilars, including interchangeable options. According to the company, the updates include moving Stelara (ustekinumab) to biosimilars Pyzchiva and Yesintek and expanding specialty biosimilar coverage.

How will the July 1, 2026 CVS formulary changes affect out‑of‑pocket costs for patients on Stelara?

Most members may pay $0 out‑of‑pocket for their therapy after the change. According to the company, preferring lower‑cost interchangeable biosimilars aims to reduce member cost-sharing and increase affordability for plan sponsors.

Which specialty therapies will CVS expand biosimilar coverage for in 2026 (CVS)?

CVS is expanding biosimilar coverage in select specialty categories including multiple sclerosis and rare blood disorders. According to the company, examples include biosimilar alternatives for Tysabri and Soliris, meeting FDA safety and interchangeability standards.

Will all employer plans using CVS templates be forced to adopt the July 1, 2026 changes?

No, plan sponsors may adopt or customize template formularies and are not forced to accept changes. According to the company, templates are regularly evaluated but sponsors can adjust based on their population needs.

How is CVS supporting members and providers during the biosimilar transition (CVS)?

CVS will provide proactive outreach, educational resources, and clinical support programs to ease transitions to preferred therapies. According to the company, these measures are intended to help clients, consultants, providers, and members navigate changes smoothly.