NCPA - National Center for Policy Analysis

Pharmacists Group Pushing for Expanded ‘Preferred’ Medicare Networks

June 2, 2016

At its 2016 Congressional Pharmacy Summit last week, the National Community Pharmacists Association (NCPA) prioritized a year-old bill that would force Medicare Part D benefit managers to expand their preferred networks despite concerns it would raise drug prices.

The NCPA is pushing Congress to pass the Ensuring Seniors Access to Local Pharmacies Act of 2015 (ESALPA), which requires benefits managers to accept any pharmacy into its preferred network that agrees to the terms and conditions set by those managers. Preferred networks typically offer Medicare Part D subscribers to receive lower copays than going to a pharmacy outside of the network.

Devon Herrick, senior fellow with the National Center for Policy Analysis, told Arizona Business Daily that preferred networks are at the root of how benefits managers have lowered drug costs for Medicare recipients.

"Medicare Part D drug plans … were purposely set up to be private and are administered by private firms that … drive hard bargains with drugmakers as well as pharmacies to get the price as low as possible," Herrick said. "Part of the reason for a narrower, or preferred, network is to drive business to those firms who are willing to cut you a better deal."

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