Retail pharmacies excluded from Medicare Part D networks maintained by drug benefits middlemen were much more likely to close over the past decade, according to new research from CHAMP faculty Jenny Guadamuz in collaboration with USC published in Health Affairs.
Independent pharmacies and those located in low-income, Black, or Latino communities were more likely to be excluded from “preferred” pharmacy networks, putting them at higher risk of closure, researchers also found.
The study is the first to examine how substantial growth of preferred pharmacy networks in Medicare’s prescription drug benefit may have contributed to the struggles of retail pharmacies, which the researchers in an earlier study found have closed in unprecedented numbers. Pharmacy benefit managers (PBMs), which control drug benefits on behalf of employers and insurers, steer beneficiaries away from non-preferred pharmacies by imposing higher out-of-pocket costs at those locations.
"Our findings demonstrate that there is a need for federal PBM reform to expand preferred pharmacy networks,” said the study’s first author, Jenny Guadamuz, an assistant professor of health policy and management at UC Berkeley School of Public Health. “New legislation might prove elusive but there may be room for regulator actions.”
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