The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Any Willing Pharmacy – Not as Good as it Sounds

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


On November 28, 2017, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule that would revise Medicare Part D, the prescription drug program.  The proposal dredges up the “any willing pharmacy” issue that would require any Part D plan sponsor, such as an insurer or a pharmacy benefit manager (PBM), to allow any pharmacy to participate in their network.  While this policy has a benign name, if it is adopted, it will drive up costs for all Medicare beneficiaries, not lower them.

During a prior attempt to establish an any willing pharmacy provision for Part D, the Federal Trade Commission commented in a March 7, 2014 letter to CMS, “any willing pharmacy provisions threaten the effectiveness of selective contracting with pharmacies as a tool for lowering costs.  Requiring prescription drug plans to contract with any willing pharmacy would reduce the ability of plans to obtain price discounts based on the prospect of increased patient volume and thus impair the ability of prescription drug plans to negotiate the best prices with pharmacies.”

Part D plan sponsors establish networks for many reasons.  For example, in addition to obtaining price discounts from pharmacies, drug plan sponsors have certain quality and safety standards that not every pharmacy could meet.  A network also enables the plans to monitor their contract pharmacies to prevent waste, fraud, or abuse.

Two new studies show the adverse economic impact of forcing Medicare Part D plan sponsors to comply with an any willing pharmacy rule.  A March 13, 2018 Oliver Wyman actuarial consulting firm study, “Preferred Pharmacy Networks and their Impact on Part D Premiums,” estimated that absent preferred pharmacy networks, 2018 Part D premiums would be $72 higher per member per year, a 17 percent increase over the 2018 national average basic premium of $420 per patient per year.  Oliver Wyman also estimated that federal spending would be $210 higher per member per year, or $4.5 billion.  Considering the growth rate in Medicare drug plans based on the 2017 Medicare Trustees Report, Oliver Wyman estimated federal spending would increase by $45.8 billion over a nine-year period.

A January 2018 Moran Company analysis, “Economic Impact of CMS’ Proposed Any Willing Pharmacy Policy,” found that if the any willing pharmacy rule was put in place and if the total volume of services rendered in preferred pharmacies were to decline by as little as 2.5 percent because of the policy in 2019, pharmacy drug plans costs could rise by $175 million.  This amount is sufficient to classify the policy as “economically significant” under Executive Order 12866 and is contrary to CMS’s contention, “we do not anticipate additional government or beneficiary cost impacts from this provision.”

Medicare Part D gives seniors a wide range of drug plans to choose from; if they do not like their current plan, they are free to choose another one.  Pharmacies compete to be part of a network, and the intense private-sector negotiations among all the stake holders in Part D have helped kept drug costs down and beneficiary satisfaction high.  Continued success in the Medicare Part D program depends on CMS not adopting the any willing pharmacy policy.

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