• Rick Bartels, MBA

Digital Therapeutics and CVS Health Vendor Benefit Management Service

By: Rick Bartels, MBA


Earlier this month CVS Health announced that Big Health’s Sleepio (digital sleep improvement program) was the first offering selected to be part of CVS’s new Vendor Benefit Management (VBM) service.

The CVS Vendor Benefit Management program is a new service developed to help CVS Caremark pharmacy benefit management (PBM) clients (self-funded employers and health plans) more easily contract, implement and manage their choice of available health and wellness benefit solutions both digital and non-digital.

What’s notable?

It’s important to note, the VBM is not exclusively for digital therapeutic/digital health products. The program will include any vendor offering CVS customers may be interested in utilizing. However, digital products are expected to be the most requested category.

The VMB is not a formulary, it is an open source program, meaning CVS will not restrict the number of vendors/products to one or two per category like is common among traditional PBMs. There are both positive and negative aspects of the open source nature of the VMB. On the positive side, no product included in the VMB will be preferred over another. The flip side of this, is the manufacturer of the digital health product will need to differentiate and drive demand for its own product.

CVS will promote the VBM service to its customers but will not promote the individual products included in the program.

It is also important to note that the VBM is only for non-prescription Digital Health products. Digital Therapeutic / Digital Health products that require a prescription will go through the standard CVS/Caremark medical device approval process.

If a CVS PBM client (employer) has interest in a new product or service offering such as a digital health product or program, the employer would ask CVS to evaluate the product offering. If the evaluation is positive, CVS would negotiate pricing and contact terms with the product manufacturer for inclusion in the VBM service offering thereby making it available to all CVS customers that utilize the VBM program.

Our view

The VMB program could be of strategic value if the digital therapeutic/digital health offering meets the following criteria.

  • Non-prescription Digital Health / Digital Therapeutic

  • Established employer customers that are current CVS Health PBM clients (at lease 2-3)

  • Adequate promotional resource to differentiate and promote to employer market segment

  • Ability to scale up and support a large user-base

  • Sufficient clinical data to establish efficacy

  • Ability to demonstrate positive economic outcomes

  • Willingness to agree to “best price” “Most Favored Nation” contracting language

Potential benefits:

An employer may be more willing to add a product to their healthcare benefit if it has been vetted and included in the VMB program. Once added to an Employer benefit package, their employees will be able to more quickly and easily access the digital solution.

If you have questions or would like additional detail, contact:

Rick Bartels, MBA




DTxCC provides real-word commercialization expertise in digital therapeutic & digital health products and services.

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