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Preferred Pharmacy Networks Offer Deeper Discounts in Part D

Pharmacy claim analyses usually don’t rate high on our reading list, but in this case we’ll make an exception.  CMS recently posted an analysis of Medicare Part D claims to compare negotiated prices available through preferred versus non-preferred pharmacy networks.   The upshot:   negotiated prices available via preferred pharmacy networks in Part D are, in fact, lower than those available at non-preferred pharmacy networks.   Helpfully, the trade group for PBMs, PCMA, offered its review of the CMS analysis:

  • Negotiated pricing for the top 25 brands and 25 generics in the Part D program at preferred retail pharmacies is lower than at non-preferred network pharmacies.
  • Of the 50 drugs examined by CMS, fully 49 had lower average negotiated prices at preferred pharmacies, with Lipitor—a unique case—being the one exception.
  • On average, negotiated prices at preferred pharmacies, including mail-service pharmacies, were 3 percent lower for brands and 11 percent lower for generics.

We have written extensively about the value of network contracting in health care, including  preferred pharmacy networks.   While the lobbying arm of the independent pharmacy industry continues to criticize preferred pharmacy networks, the rest of the health-care industry has changed with the times.  By the way, PCMA released a commissioned analysis by Avalere of Part D plans’ premium bids for 2013 and found that the five lowest average monthly Part D plans all feature – you guessed it – preferred pharmacy networks.