Medicare Part D Preferred Pharmacy Networks And The Risk For Pharmacy Closure, 2014-23

Area of Science:

• Health Services Research
• Pharmacy Management
• Health Equity

Background:

• Medicare Part D prescription drug plans utilize preferred pharmacy networks to control costs and guide beneficiaries.
• These networks can influence patient choice and pharmacy viability.

Purpose of the Study:

• To investigate disparities in preferred pharmacy network inclusion within Medicare Part D plans.
• To examine the association between preferred network status and pharmacy closure risk.

Main Methods:

• Analysis of Medicare Part D plan network data.
• Comparison of preferred vs. non-preferred pharmacy characteristics, including location and ownership.
• Statistical analysis of pharmacy closure rates based on network status.

Main Results:

• Independent pharmacies and those in low-income, Black, and Latinx neighborhoods were less likely to be included in preferred Part D networks.
• Pharmacies excluded from preferred networks exhibited a 70-350% increased likelihood of closure compared to preferred pharmacies.

Conclusions:

• Medicare Part D preferred networks may exacerbate health inequities by disproportionately disadvantaging pharmacies serving vulnerable populations.
• Policies addressing network design are needed to ensure equitable access to community pharmacies for all Medicare beneficiaries.