The Exchange Cut Timeline, Drugs & Bots, Rom-Com(merce) 12/5/23
Dec 5, 2023
Nationwide's chief economist discusses the labor market and potential rate cuts. CEO of CVS, Karen Lynch, reveals CVS's plans to change prescription drug pricing. The effectiveness of Walmart's new 'Rom-Com-merce' advertising strategy is debated.
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Look Beyond Month‑Over‑Month Inflation
- Analysts prefer three-month or six-month annualized inflation measures over noisy month-over-month swings.
- Base effects can paint a misleading year-over-year improvement as large months drop out of the calculation.
Adopt Transparent Pharmacy Pricing
- CVS will align pharmacy counter pricing to a transparent cost-plus-markup-plus-service fee model starting 2025.
- Karen Lynch says this makes out‑of‑pocket costs clearer and aims to lower total drug spending for consumers.
Pricing Shift Reorients PBM Economics
- CVS's pricing shift reduces reliance on opaque PBM rebate spreads and moves stability into the pharmacy channel.
- Scott Gottlieb argues this trade will benefit pharmacies and consumers while compressing PBM-derived margins.