Does bargaining affect Medicare prescription drug plan reimbursements to independent pharmacies?

To examine how pharmacy bargaining activities affect reimbursement rates in Medicare Part D prescription drug plan (PDP) contracts, controlling for pharmacy quality attributes, market structures, and area socioeconomic status.

Cross-sectional study.

Six Medicare regions throughout the United States between October and December 2009.

Random sample of 1,650 independent pharmacies; 321 returned surveys containing sufficient responses for analysis.

Pharmacies were surveyed regarding PDP reimbursement rates, costs, and cash prices of two popular prescription drugs (atorvastatin calcium [Lipitor-Pfizer] and lisinopril, 1-month supply of a common strength), as well as pharmacy bargaining activities and quality attributes. Data also were used from the National Council for Prescription Drug Programs pharmacy database, the 2000 U. S. Census, and the 2006 Economic Census on local market structures and area socio-economic status.

PDP reimbursement rates.

For the brand-name drug atorvastatin calcium, the PDP reimbursement was positively related to a pharmacy's request for a contract change (β = 0.887, P < 0.05), whereas other bargaining activities were not significantly related to PDP reimbursement. However, for the generic drug lisinopril, no bargaining activities were found to be significantly related to the PDP reimbursement.

Pharmacy request for a contract change was associated with higher reimbursement rates for the brand-name drug atorvastatin calcium in PDP contracts, after controlling for pharmacy quality attributes, local market structures, and area socioeconomic status; this finding likely applies to other brand-name drugs because of the structure of the contracts. Our results suggest that independent pharmacies are more likely to acquire higher reimbursement rates by engaging in active bargaining with third-party payers.