Lilly drops CVS as its own employee pharmacy benefit manager

Eli Lilly is dropping CVS Health's Caremark as the pharmacy benefit manager for its own workers, a move that comes months after Caremark stopped favoring Lilly's obesity drug Zepbound in its formulary, according to a Bloomberg News report cited by Reuters ^[1].

Starting January 1, Lilly employees on the company's medical plan will be automatically enrolled with Rightway, a fee-based pharmacy benefit manager, according to a document viewed by Bloomberg ^[1]. Lilly told Reuters it routinely reviews its benefit providers and that Rightway offers "competitive fees and services aligned with the best interests of our employees, retirees and their families," but the company did not directly say whether the switch was tied to the Zepbound coverage decision ^[1]. Rightway previously picked up Tyson Foods as a client after Tyson also dropped CVS as its pharmacy benefit manager last year ^[1].

The backdrop is a dispute over how CVS Caremark builds its drug formularies. CVS said in May that Caremark would drop Zepbound as a preferred product on its main reimbursement list starting July 1, while keeping Novo Nordisk's Wegovy after negotiating what the company called more favorable pricing ^[1]. A CVS spokesperson, David Whitrap, told Reuters that Caremark does offer plan options that cover both Zepbound and Wegovy, but that this option costs plan sponsors more than the standard commercial formulary that excludes Zepbound ^[1]. Whitrap also said the move to negotiate Lilly and Novo Nordisk against each other "drove significant savings for our clients," and that Caremark's overall client retention stays in the high 90% range year after year ^[1].

Reuters said it could not independently verify Bloomberg's report linking Lilly's internal benefit switch to the Zepbound formulary dispute ^[1].

Why it matters for patients

This story is about corporate benefit contracts, not about a change in what any individual patient can get filled at the pharmacy counter. But it is a visible sign of how much leverage pharmacy benefit managers hold over which GLP-1 drug, semaglutide (Wegovy) or tirzepatide (Zepbound), a given health plan will cover as preferred. When a large benefit manager like Caremark negotiates a formulary deal with one drugmaker over another, it can affect co-pays and access for millions of people whose employer or insurer uses that same benefit manager, even if those people have never heard of the corporate dispute behind it ^[1].

For patients who get insurance through their job, the practical lesson is that formulary status for these drugs can shift based on business negotiations between manufacturers and benefit managers, not necessarily based on new medical evidence. Someone whose employer works with Caremark, for example, may find Wegovy preferred and Zepbound harder or costlier to get covered, according to the arrangement CVS described ^[1]. The dispute also shows that even Lilly, which makes Zepbound, was affected enough by Caremark's decision that it changed its own employees' benefit administrator, according to Bloomberg's reporting ^[1].

What happens next

Lilly's new arrangement with Rightway is set to begin January 1 for employees on its medical plan ^[1]. CVS's decision to drop Zepbound as a preferred Caremark product took effect July 1 ^[1]. Reuters has not confirmed a direct causal link between the two events, and neither company has said whether the pricing dispute will be revisited ^[1].