Lilly drops CVS as its employee pharmacy benefit manager after Zepbound formulary change

Eli Lilly is dropping CVS Health's drug benefit plan for its own employees after the CVS Caremark pharmacy benefit manager stopped covering Lilly's weight-loss drug Zepbound in favor of Novo Nordisk's rival medication Wegovy, Bloomberg News reported on Nov. 11, citing people familiar with the matter ^[1].

Beginning January 1, Lilly employees covered by the company's medical plan will be automatically enrolled for coverage through pharmacy benefit manager Rightway, according to a document viewed by Bloomberg ^[1]. Reuters said it could not immediately verify the Bloomberg report linking the two events ^[1].

How the formulary fight started

The coverage decision at the center of the dispute dates to May, when CVS said its Caremark unit had decided to drop Zepbound as a preferred product from its reimbursement list starting July 1 ^[1]. CVS kept Wegovy after negotiating more favorable pricing for the medicine ^[1]. Zepbound is tirzepatide; Wegovy is semaglutide. Both are GLP-1 class medicines used for weight loss.

Lilly told Reuters it routinely reviews its benefit service providers and that Rightway offers "competitive fees and services aligned with the best interests of our employees, retirees and their families" ^[1]. The company did not directly address whether the shift away from CVS was linked to the Zepbound coverage decision ^[1]. Rightway did not immediately respond to Reuters' requests for comment ^[1].

CVS spokesperson David Whitrap told Reuters the company will not comment on specific clients, and that Caremark's overall client retention remains in the high 90% range year after year ^[1]. He said Caremark offers options that cover both Zepbound and Wegovy, but "this option is costlier for plan sponsors than our standard commercial formulary that excludes Zepbound" ^[1].

"Our move earlier this year to negotiate Lilly and Novo against one another drove significant savings for our clients," Whitrap said ^[1].

Rightway is a pharmacy benefit manager that works on a fee basis, according to the report. Last year, Tyson Foods also dropped CVS as its pharmacy benefit manager and replaced it with Rightway ^[1].

Why it matters for patients

Pharmacy benefit managers build the lists, called formularies, that decide which drugs a health plan covers and on what terms. When a formulary names one GLP-1 as preferred and excludes another, members who want the excluded drug can face higher out-of-pocket costs, extra paperwork, or pressure to switch to the covered product. That is the dynamic CVS described when it made Wegovy preferred and dropped Zepbound as of July 1 ^[1].

This particular move affects Lilly's own workforce, not the commercial plans CVS administers for other employers. Whether other large employers follow Lilly's lead has not been reported. The size of Lilly's covered workforce and the terms of its arrangement with Rightway have not been disclosed. Whether Lilly employees will pay more, less, or the same for their prescriptions under Rightway also has not been reported.

For patients on either drug, the practical question is which product their own plan lists as preferred, since that varies by employer and insurer. CVS said its standard commercial formulary excludes Zepbound, while an option covering both Zepbound and Wegovy costs plan sponsors more ^[1].

What happens next

Lilly employees covered by the company medical plan move to Rightway automatically on January 1 ^[1]. The CVS Caremark formulary that made Wegovy preferred and dropped Zepbound as a preferred product has been in effect since July 1 ^[1]. Neither company has said whether the coverage terms for either drug will change again.