Thursday, October 18, 2018

Battle Royale: CVS and Kroger Gain, Walgreens Slips in 2019 Part D Preferred Pharmacy Networks

In Humana Triggers a Pullback for Preferred Pharmacy Networks in 2019 Medicare Part D , I highlighted how preferred pharmacy networks will dominate next year’s Medicare Part D prescription drug plans (PDP).

Today, I examine chain pharmacies’ participation in 24 major 2019 Part D preferred networks. Some highlights:
  • CVS, for the second year, has strengthened its position as a preferred pharmacy in many 2019 networks.
  • Walmart and Kroger have maintained the strong positions that they have established over the past few years. Walgreens, however, has slipped as the other chains grow.
  • Poor ol’ Rite Aid will again be a preferred pharmacy only in the single plan offered by its EnvisionRx subsidiary.
Below, we provide you with a handy table for scoring each chain’s participation and all changes from 2018 to 2019. Get ready to do The Floss!


Preferred network models have grown rapidly within the Medicare Part D program. The Centers for Medicare & Medicaid Services (CMS) calls them preferred cost sharing networks. CMS calls the pharmacies in such networks preferred cost sharing pharmacies.

For 2019, 826 of the total 901 of Medicare Part D regional prescription drug plans (PDP) have a preferred network. See our previous analysis for more details on next year’s market.

We examined the 22 major multi-regional Part D plans with preferred cost sharing pharmacies. These larger plans will operate 743 regional PDPs, or 90% of regional PDPs with a preferred cost sharing network. We then identified preferred chain pharmacies for each plan. We identified the preferred status of the largest six retail chains.

To facilitate comparison with 2018, we also included two national plans—Humana Enhanced Rx Plan and Humana Preferred Rx Plan—that will switch from open to preferred networks for 2019.

Compared with our 2018 analysis of chains’ participation in 22 PDPs for 2018:
  • Twenty plans were offered in both years.
  • Four plans will be new for 2019.
  • Two 2018 plans—First Health Part D Premier Plus and Symphonix Value Rx—will not be offered in 2019.

The table below summarizes retail chain participation in the 22 major multi-regional Part D plans with preferred cost sharing pharmacy networks and the 2 plans that had preferred networks in 2018 (but not 2019). The shaded boxes indicate a change in a chain's participation from 2018 to 2019.

[Click to Enlarge]

Here are highlights of pharmacy participation in 2019 Part D preferred networks:

  • CVS. CVS Health’s retail pharmacies were preferred in only two major Part D plans in 2017. For 2018, CVS had reversed course and was preferred in 11 major Part D plans. For 2019, CVS further strengthened its position by becoming a preferred chain in three of the four new plans.

    CVS is the only preferred pharmacy chain in the three Wellcare plans, which had switched in 2018 from open to preferred networks. However, Aetna sold its Part D plans to Wellcare to gain antitrust approval for the CVS Health transaction. It’s not yet clear if this transaction will affect CVS’s ability to remain the key preferred chain in the Wellcare plans.
  • Walgreens. For 2018, Walgreens was a preferred pharmacy in 11 plans. For 2019, it will be preferred in only 10 plans. It gained preferred position in two of the four new plans. Walgreens lost its role as a preferred pharmacy in the two Humana plans that will be switching to open networks. 
  • Walmart. Walmart has historically been more willing than any other pharmacy to compete on price. For 2019, Walmart will be a preferred pharmacy in 11 of the 22 major preferred cost sharing networks. The most notable change is its new status in one of the three Express Scripts plans. Medicare history buffs should note that Walmart and Humana launched the first Part D preferred network plan in 2010.
  • Rite Aid. For the fourth year, Rite Aid will not participate as a preferred pharmacy with any of the major national plans. For 2019, it is again participating only in the plan sponsored by EnvisionRx, the PBM that it acquired in 2015.
  • Kroger and Albertsons. The two large supermarket chains remain active participants in the 2019 preferred networks. For 2019, Kroger— the seventh-largest U.S. pharmacy—matched CVS pharmacies’ level of participation.
Smaller pharmacies participate in pharmacy services administrative organizations (PSAOs) to leverage their influence in contract negotiations with the plans. Next week, I’ll delve into PSAOs’ participation in the 2019 Part D plans and whether they will be more than bush campers.

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