Below, I examine the pharmacies in the biggest plans’ networks. Key conclusions:
- Walmart participates in more Part D preferred networks than does any other chain.
- Supermarket and other mass merchants—such as Kroger, Safeway, and Target—also now big players in preferred networks.
- Among major chains, CVS and Rite Aid are the laggards.
- Once again, independent pharmacies seem to have missed an opportunity.
I examined the 24 major multi-regional plans with a preferred pharmacy network. These plans operate 769 regional PDPs, which account for 66% of the total regional PDPs for 2014 (and 90% of regional PDPs with a preferred network). See Tuesday’s post for more details on the 2014 plans.
The table below summarizes pharmacy chain participation in these plans’ preferred networks. Click to enlarge the image. Or, click here to download the list as a PDF.
A chain’s participation usually means that all of its brands also participate. Thus, Walmart includes Walmart, Sam's Club, Neighborhood Market pharmacies, and Walmart Express.
- Walmart wins big. Walmart is in 21 of the 24 major preferred networks. It is excluded from only: (1) the Rite Aid co-branded plan, and (2) the Smart D Rx plan, which is under CMS sanction and can’t accept new enrollees. Walmart estimates that nearly 25% of its 2012 prescription volume came from its participation in narrow networks, compared to less than 1% in 2009. Looks like its share will grow even more. (NOTE: Updated on 10/18/13, per comment from Tom Hill of Walmart below.)
- Walgreens stays in the game. In 2013, Walgreens jumped on the preferred network bandwagon. In 2014, it kept pursuing these deals, by becoming preferred in 10 major Part D plans. Perhaps the company learned something from its imbroglio with Express Scripts?
- CVS and Rite Aid are also-rans. Except for its participation in the co-branded Aetna plan, CVS is not well-positioned in 2014’s Part D preferred networks. The pharmacy is preferred only with second-tier players (Cigna, United American) and the sanctioned SilverScript plans. Rite Aid is in a similar position.
- Other chains get busy. For 2014, Kroger, Safeway, and Target became much more active participants. Smaller chains—including Kmart, Costco, Publix, H-E-B, and Costco—are also preferred pharmacies in multiple networks.
- Whither independents? Public data do not identify many independents in Part D preferred networks. As far as I can tell, independent pharmacies are publicly identified as participating only in the sanctioned SilverScript and Smart D plans. Medicine Shoppe and Health Mart are part of some smaller plans, such as the Anthem Blue Cross and Blue Shield plans (not shown above). Seems like a failure by the Pharmacy Services Administration Organizations (PSAOs), which negotiate and administer contracts between Pharmacy Benefit Managers (PBMs) and independent pharmacies. (For more on PSAOs, see pages 26-29 of the 2013–14 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. )
UPDATE: The article was updated to reflect Walmart's preferred pharmacy status in the SilverScript and Aetna/CVS networks.