As the 2016 open enrollment season for Medicare Part D winds down, the vast majority of seniors and disabled beneficiaries will be choosing drug plans featuring preferred pharmacies, which offer lower cost sharing on their prescription drugs.   

According to a recent analysis of Medicare data, conducted by Drug Channels, 85 percent of Part D regional plans will have preferred pharmacies in 2016. There is broad competition within Part D preferred pharmacy plans, with 62 plan sponsors offering 754 regional plan options.

Importantly, data show that independent drugstores are “well represented” as preferred pharmacies in Part D drug plans.     


It should come as no surprise that plans are increasingly featuring preferred pharmacies with lower cost sharing. These plans are popular with Medicare enrollees. A survey conducted by Hart Research Associates shows that Part D enrollees in a preferred pharmacy plan are overwhelmingly satisfied. The survey also found that nine out of 10 seniors in these plans from urban, suburban, small town, and rural areas have convenient access to these preferred pharmacies in Part D. 

Why are preferred pharmacy plans so popular? They offer convenience and have lower premiums across the board.

  • A study from Oliver Wyman finds that eliminating preferred pharmacies in Part D would increase premiums by approximately $63 annually for over 75 percent of Part D enrollees. 
  • A study by Milliman estimates that plans with preferred pharmacies will reduce federal Medicare spending by $7.9 to $9.3 billion over the subsequent 10 years.

Policymakers should guard against new special interest mandates that undermine affordable pharmacy plans. For example, the independent drugstore lobby wants Congress to pursue so-called “any willing pharmacy” mandates (H.R. 793/S. 1190) which would threaten the existence of these popular plans in Medicare and increase spending by $21 billion over 10 years.

A few years ago lower cost preferred pharmacy plans were an innovation that offered great promise. Today, they are the foundation of Medicare Part D.

Merritt is president and CEO of the Pharmaceutical Care Management Association.