Pharmacy Choice

Medicare beneficiary access to prescription drugs is impeded by mandates from pharmacy benefit managers that effectively dictate which pharmacy to use based on exclusionary "preferred pharmacy" arrangements. Independent community pharmacies are not allowed to participate in some of these arrangements, even if they offer to accept the Part D plan's same contract terms and conditions. This can raise access issues for patients in underserved areas in which independent community pharmacies are predominantly located.

THE SOLUTION: Give seniors access to discounted copays at their pharmacy of choice. The Ensuring Seniors Access to Local Pharmacies Act, S. 1044/H.R. 1939, would allow community pharmacies that are in medically underserved areas (MUA), medically underserved populations (MUP), or health professional shortage areas (HPSA) to participate in Medicare Part D preferred pharmacy networks as long as they are willing to accept the contract terms and conditions. A recent study estimated 3 million rural residents are at risk of losing the only pharmacy in their community, with the next nearest pharmacy over 10 miles away. 1 This makes pharmacy choice policies all the more necessary.

S. 1044 / H.R. 1939 WILL ...

  • Increase competition among pharmacies and Part D drug plans. By expanding the number of pharmacies that may be able to offer discounted copays for Medicare Part D prescription drugs, S. 1044/H.R. 1939 would empower more seniors to choose the pharmacy that best fits their needs.

  • Produce cost savings for the government and taxpayers. The Centers for Medicare & Medicaid Services (CMS) concluded that pharmacy choice policies such as S. 1044/H.R. 1939 are "the best way to encourage price competition and lower costs in the Part D program.2" However, Congress must act because Medicare has refrained from implementing the pharmacy choice policy.

S. 1044 / H.R. 1939 WILL NOT ...

  • Undermine the Medicare Part D program. Those opposed to greater access for seniors to copay discounts will claim that S. 1044/H.R. 1939 would spell the end of "preferred pharmacy" drug plans. They're wrong. This legislation simply increases choice for patients and competition among pharmacies.

  • Increase Medicare premiums or costs. After conducting a study, Medicare officials concluded that they can no longer assume that preferred networks are less expensive for the government. They identified instances where such networks were in fact costlier to the program.3 Moreover, a leading health care economist has demonstrated how pharmacy choice can actually lower Medicare costs by increasing competition.4

1RUPRI Center for Rural Health Policy Analysis. "Issues Confronting Rural Pharmacies after a Decade of Medicare Part D." April 2017.

2Centers for Medicare & Medicaid Services. "Announcement of Calendar Year (CY) 2014 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter." April 1, 2013.

3Centers for Medicare & Medicaid Services. "Part D Claim Analysis: Negotiated Pricing Between Preferred and Non-Preferred Pharmacy Networks." April 30, 2013.

4Eisenstadt, David M. "How H.R. 4577’s Any Willing Pharmacy Provision Could Leave Drug Prices Unchanged." August 6, 2014.


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