Penn drops CVS after 25 years to cut drug costs

Twenty-five years of partnership ended this week when the University of Pennsylvania announced it is replacing CVS Caremark with Navitus Health Solutions as its pharmacy benefit manager.

The switch takes effect for the upcoming year and impacts employees enrolled in Penn medical insurance plans, along with specific retiree groups. While members can still fill prescriptions at CVS locations, the new structure offers lower costs for drugs purchased through the Navitus network. The final price for any medication will continue to vary based on the individual insurance plan and the specific class of drug.

Navitus has operated for more than two decades. The company serves 18 million members through agreements with about 800 clients. Its network includes more than 60,000 pharmacies, encompassing CVS stores and most Penn Medicine facilities.

Affected members will receive a new insurance card in early December. They can begin using that card at participating pharmacies on January 1. Navitus plans to send mail notifications in January to inform individuals if their current medications lack coverage under the new provider.

The change arrives alongside broader adjustments to the 2026-27 employee healthcare plan. Those changes include higher deductibles and revised contribution rates for medical and dental coverage. The updates apply to faculty, staff, and postdoctoral workers. Undergraduates remain on a separate plan through Aetna Student Health.

The decision follows a legal dispute that began in July 2025. Penn sued Caremark and associated pharmaceutical manufacturers, alleging a price-fixing scheme that drove up the cost of diabetes treatments like insulin. The University noted in its filing that diabetes medication costs increased more than tenfold over 20 years, while general consumer goods rose by only 1.75 times. The suit described the price hikes as the result of an opaque kickback scheme rather than market forces.

Penn’s case joined over 400 other lawsuits consolidated in 2023. Judge Brian Martinotti in the District of New Jersey oversees the litigation, which proceeds on three separate tracks for state attorneys general, self-funded payers, and third-party payer class actions.