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Will I pay less for my formulary medications if I use my Medicare drug plan's preferred pharmacies?


Probably.  Each Medicare Part D prescription drug plan (PDP or MAPD) has a national pharmacy network that includes 50,000 to 60,000+ pharmacies and both "preferred" and "standard" pharmacies are included in a Medicare prescription drug plan’s pharmacy network.

However, preferred network pharmacies usually have lower cost-sharing as compared to standard network pharmacies - meaning, you may pay less for your prescriptions at a preferred pharmacy as compared to a standard pharmacy - and you can see some actual Medicare plan cost-sharing examples below.

As an example of different cost-sharing between network pharmacies, the chart below shows the variation between preferred and standard network pharmacies for the 2020 California SilverScript Choice (PDP) plan:

California SilverScript Choice (S5601-064)
  30-Day Supply Cost-Sharing 90-Day Supply Cost-Sharing
Preferred Pharmacy Standard
Pharmacy
Mail-Order Preferred Pharmacy Standard
Pharmacy
Mail-Order
Initial Coverage Phase Cost-Sharing (before Donut Hole)
Tier 1 - Preferred Generic: $0 $5 $0 $0 $15 $0
Tier 2 - Generic: $1 $6 $1 $3 $18 $3
Tier 3 - Preferred Brand: $47 $47 $47 $141 $141 $141
Tier 4 - Non-Preferred Brand: 38% 38% 38% 38% 38% 38%
Tier 5 - Specialty Tier: 28% 28% 28% n/a n/a n/a

Note: The preferred and standard network pharmacy cost-sharing can vary by state.  You can use our Rx$ icon on our PDP-Finder or MA-Finder to see the cost-sharing details for all tiers and pharmacies for any Medicare Part D or Medicare Advantage plan with prescription drug coverage.

Here is another example of how coverage costs can vary between preferred and standard pharmacies.  The chart below shows the variation between preferred and standard network pharmacies for the 2020 Texas WellCare Classic Medicare Part D plan:

Texas WellCare Classic (PDP) (S4802-013)
  30-Day Supply Cost-Sharing 90-Day Supply Cost-Sharing
Preferred Pharmacy Standard
Pharmacy
Mail-Order Preferred Pharmacy Standard
Pharmacy
Mail-Order
Initial Coverage Phase Cost-Sharing
Tier 1 - Preferred Generic: $0.00 $2.00 $0.00 $0.00 $6.00 $0.00
Tier 2 - Generic: $1.00 $4.00 $1.00 $3.00 $12.00 $2.50
Tier 3 - Preferred Brand: $32.00 $40.00 $32.00 $96.00 $120.00 $80.00
Tier 4 - Non-Preferred Brand: 34% 45% 34% 34% 45% 34%
Tier 5 - Specialty Tier: 25% 25% 25% n/a n/a n/a


The evolution of using preferred and standard network pharmacies

Since 2012, more Medicare Part D plan have been moving toward adopting using different cost-sharing models for preferred pharmacies as compared to standard network pharmacies.  As an example, in New Jersey Medicare Part D prescription drug plans had only seven (7) Medicare Part D plans in 2012 that included standard and preferred pharmacy pricing.  This number of Medicare plans increased to 15 plans in 2013 - and in 2019, 24 of the 26 New Jersey stand-alone Medicare Part D prescription drug plans use preferred and standard pharmacy pricing.

Nowadays, about 95% of all 2020 stand-alone Medicare prescription drug plans (PDPs) will use different cost-sharing for preferred vs. standard (non-preferred) network pharmacies (as compared to 99% of all PDPs in 2019).  More specifically, 911 stand-alone 2020 Medicare prescription drug plans will offer additional cost-sharing savings if you shop at one of their preferred network pharmacies. 

For a historical perspective, you can see a complete list of all 2013 plans (stand-alone prescription drug plans and Medicare Advantage plans) that are using preferred network pharmacy pricing in our blog "2013 Sees Increase in the Number of Medicare Part D Plans Using Preferred Network Pharmacy Pricing": https://Q1News.com/250.html.  You can also click here to read more about the cost differences between preferred network and standard (non-preferred) network pharmacies in 2013. 

For more information about preferred and standard network pharmacy cost sharing, please also see our article: Q1Group 2020 PDP Analysis: Will your 2019 Medicare Part D prescription drug plan begin using preferred pharmacy pricing in 2020?


Choosing a preferred network pharmacy when using the Medicare.gov Plan Finder


After choosing your medications, the Medicare.gov Plan Finder allows you to choose up to two pharmacies in your area as reference to check prices across the various Medicare Part D plan options.  Unfortunately, if you selected your Medicare prescription drug plan using the Medicare.gov Plan Finder – and the pharmacy you selected is not a preferred pharmacy you will be shown the higher "standard" network pharmacy prices and not the preferred pharmacy prices - so you will need to look closely at the Plan Finder to determine whether your chosen pharmacies are preferred or standard.

If you are not certain about an additional charge at a network pharmacy, please telephone your Medicare plan’s Member Services department to locate a preferred network pharmacy in your area or contact Medicare for more information at 1-800-633-4227.





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