July 2, 2013


Pharmaceutical Care Management Association President and CEO Mark Merritt released the following statement on a new Medicare Part D claims analysis on negotiated prices between preferred and non-preferred pharmacy network released today by the Centers for Medicare & Medicaid Services (CMS):

“The CMS analysis confirms that negotiated prices at preferred pharmacies are lower on average than at non-preferred pharmacies. Indeed, government and beneficiary savings from preferred pharmacy network plans are likely even greater, as the government’s analysis takes into account only part of the savings from these plans. Unfortunately, the CMS methodology does not include the increased savings from other factors including premiums, reinsurance, and post point-of-sale price concessions that ultimately determine CMS payments to preferred network plans. Key points based on the analysis include:

  • “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,” according to CMS.
  • 49 out of 50 of the drugs examined by CMS 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% lower for brands and 11% lower for generics, according to CMS.

“A recent report conducted by Avalere Health found that the top five Medicare Part D plans with the lowest average premiums all include preferred pharmacy networks. The report also found that of all Part D plans with national or near-national status, seven of the top 10 with the lowest average premiums have preferred pharmacy networks.

“In addition, seniors are satisfied with their Part D coverage. A national poll conducted by Hart Research Associates shows that seniors in plans with preferred pharmacy networks are overwhelmingly satisfied, citing lower costs and convenient access to pharmacies, among other benefits. The survey revealed that 80% of those in preferred pharmacy plans—which translates to over 7 million seniors— would be very upset if their plan was no longer available in the future.

“We look forward to working with CMS to explore policy options to help Part D plans negotiate even more aggressive discounts with drugstores and drug manufacturers.”