CVS Health Updates Commercial Formularies, Reintroduces Zepbound
CVS Health announced updates to its most common commercial formularies, expanding GLP-1 options for members- including the reintroduction of Zepbound as a covered medication. Plan sponsors that adopt CVS Caremark template formularies retain discretion to customize coverage for their members. The company said, "CVS Caremark will add Zepbound back to our commercial formularies as an additional preferred option October 1, 2026, increasing access to GLP-1s at a more affordable price for plan sponsors who elect to provide coverage of those medications for their members. Additionally, effective June 1, 2026, CVS Caremark will remove the new-to-market block on Foundayo, a new oral GLP-1 therapy, where approved for coverage by plans. Over the past year, we've been actively driving change in the GLP-1 weight management space to help lower costs. Our approach has made a real difference, enabling us to now expand options while continuing to make progress on affordability. We expect these changes to help drive increased savings in the weight management category - after a history of delivering double digit savings for our template formulary customers year over year - while expanding choice for our members."
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- Award Recognition: CVS Health has been awarded the 2026 Newsweek AI Impact Award for its AI-Driven Prescription Interpretation technology, highlighting its commitment to enhancing patient care through innovative AI integration in pharmacy workflows.
- Patient Safety Enhancement: By deploying trained open-source large language models, CVS Health effectively addressed the manual transcription burden of complex prescription instructions, thereby increasing the time clinicians can dedicate to direct patient support.
- Significant Outcomes in Pharmacy: The automation in retail pharmacy accelerates prescription fulfillment and reduces delays, while in specialty pharmacy, the tool enables quicker patient onboarding and prescription filling, enhancing the overall patient experience.
- Ongoing Performance Evaluation: CVS Health prioritizes patient safety and responsible AI deployment, continuously evaluating model performance against pharmacy accuracy benchmarks and ensuring pharmacists maintain final clinical authority through human-in-the-loop safeguards.
- Award Recognition: CVS Health has been awarded the 2026 Newsweek AI Impact Award for its AI-driven prescription interpretation technology, highlighting the company's innovative capabilities and commitment to patient care in the healthcare sector.
- Efficiency Improvement: By embedding intelligent automation into pharmacy workflows, CVS Health enables pharmacists and technicians to focus more on clinical support, thereby enhancing patient care quality and reducing administrative burdens.
- Rapid Prescription Processing: The technology significantly accelerates prescription fulfillment in both retail and specialty pharmacies, particularly aiding patients in specialty settings to begin therapy faster, thus improving their treatment experience.
- Ongoing Performance Evaluation: CVS Health has maintained patient safety and responsible AI deployment as foundational design principles, ensuring model performance meets pharmacy accuracy benchmarks while incorporating human-in-the-loop safeguards to uphold pharmacists' clinical authority.
- Stock Price Surge: Eli Lilly's shares rose 3.4% to $1,124 in afternoon trading, reflecting positive market sentiment following CVS's restoration of Zepbound as a co-preferred option, indicating strong investor confidence in the company's new drug offerings.
- Increased Drug Accessibility: With CVS Caremark covering approximately 25 to 30 million Americans, Eli Lilly's full obesity medication portfolio is now accessible through the three largest pharmacy benefit managers in the U.S., which is expected to significantly enhance market penetration for its products.
- Importance of Foundayo: Foundayo, as Eli Lilly's oral GLP-1 medication, addresses the barrier of needle aversion, and its inclusion in CVS's formulary is likely to accelerate market acceptance and reduce the typical access hurdles faced by new drugs.
- Investment and Demand Growth: Eli Lilly has invested $21 billion in U.S. manufacturing capabilities to meet surging demand for its weight-loss medications, particularly after clinical trials for Foundayo showed significant weight loss in adults aged 65 and older, further boosting market confidence in the company's growth prospects.
- Stock Recovery: CVS Health's stock has surged over 107% since the beginning of 2025, indicating a growing market confidence in its future prospects after several years of struggles, which may attract more investor interest.
- Dividend Appeal: With a current dividend yield of nearly 2.9%, CVS's yield is more than 2.5 times that of the S&P 500, highlighting its attractiveness; however, the sustainability of this dividend remains a key concern for long-term investors.
- Cash Flow Health: In the most recent quarter, CVS generated $4.2 billion in operating cash flow, down from $4.6 billion last year, yet still sufficient to cover its $847 million in dividend payouts, demonstrating the company's financial robustness.
- Future Projections: CVS expects its cash flow to reach at least $9.5 billion this year, comfortably covering the projected $3.39 billion in dividends, and while the company has paused annual dividend increases, its healthy cash flow supports ongoing dividend payments.
- Cash Flow Coverage: In the most recent quarter, CVS Health generated $4.2 billion in cash flow, which, despite a decrease from last year, was sufficient to cover its $847 million dividend payout, demonstrating the company's robust cash flow management.
- Dividend Yield Advantage: Currently, CVS's dividend yield is nearly 2.9%, more than 2.5 times that of the S&P 500, and while stock growth has stagnated, its dividend remains a key attraction for investors, highlighting its importance in the current market.
- Future Cash Flow Expectations: CVS expects its cash flow to reach at least $9.5 billion this year, comfortably covering the projected $3.39 billion in dividends, indicating financial stability and the sustainability of its dividend payments.
- Dividend Growth Pause: Although CVS has paused annual dividend increases in recent years to pay down Aetna acquisition debt, its healthy cash flow alleviates concerns about potential dividend cuts, reflecting a cautious approach to financial management.
- Coverage Restoration: CVS Caremark will restore coverage for Eli Lilly's weight loss injection Zepbound as a preferred option starting October 1, significantly enhancing patient access and treatment options.
- New Drug Launch: Eli Lilly's newly approved obesity pill Foundayo will be available on plans from June 1, 2026, further enriching the company's portfolio in obesity treatment and strengthening its market competitiveness.
- Stock Milestone: Eli Lilly's shares hit an all-time high of $1,147.95 on Thursday, pushing its market capitalization to approximately $1.02 trillion, reflecting strong market demand for its obesity drugs and future growth potential.
- Competitive Landscape Shift: CVS's decision came after Eli Lilly agreed to lower drug prices, which will help Lilly compete more effectively with rival Novo Nordisk in the rapidly growing weight-loss market, enhancing its market share.











