New Avalere Analysis: Top Five Medicare Part D Plans with the Lowest Average Premiums Have Preferred Pharmacy Networks

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The top five Medicare Part D plans with the lowest average premiums all have preferred pharmacy networks, according to a new analysis conducted by Avalere Health for the Pharmaceutical Care Management Association (PCMA). 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.

The top five Medicare Part D plans with the lowest average premiums all have preferred pharmacy networks, according to a new analysis conducted by Avalere Health for the Pharmaceutical Care Management Association (PCMA). 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.

"Seniors rely on low premium preferred network plans, but the drugstore lobby opposes them in Medicare Part D. That’s because preferred network plans make drugstores compete by offering greater discounts," said PCMA President and CEO Mark Merritt.

Avalere calculated 2013 average premiums for all Medicare Prescription Drug Plans (PDPs) across all 34 Medicare regions (excluding US territories) based on enrollment as of May 2013.

Their analysis shows:

  •     A plan with a preferred pharmacy network offers the lowest average monthly premium of any Medicare PDP ($15).
  •     The five Medicare PDPs with the lowest average monthly premiums have preferred pharmacy networks.
  •     Seven out of the top 10 Medicare PDPs with the lowest average premiums and national or near-national status have preferred pharmacy networks.

A recent national poll 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.

In addition, a recent study by Visante found that Medicare could save $35 billion over the next decade by leveraging greater use of pharmacy networks. Currently, there are more drugstores in the U.S. than McDonald’s, Burger Kings, Pizza Huts, Wendy’s, Taco Bells, Kentucky Fried Chickens, Domino’s Pizzas, and Dunkin’ Donuts combined, creating a highly competitive environment.

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