In a previous analysis (Preferred Pharmacy Networks Will Dominate 2018 Medicare Part D Plans, 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 22 major 2018 Part D preferred networks. Our analysis shows significant changes from last year:
- CVS has changed strategy and will go all in as a preferred pharmacy in many 2018 networks. It's also the exclusive chain in some plans.
- Walgreens remains an active participant, but CVS has displaced it in some plans.
- Kroger has raised its bet on being a preferred pharmacy. Walmart has held steady, maintaining a position similar to that of 2017.
- Rite Aid continues to play a losing hand. It will be a preferred pharmacy only in the single plan offered by its EnvisionRx subsidiary.
Our 2018 Part D analysis demonstrates the pharmacy industry’s new period of hypercompetition. Seniors are willing to switch pharmacies to reduce out-of-pocket expenses. Chains must therefore reduce their prescription profit margins to compete for a spot in narrow networks. Expect the dominance of preferred networks to the wild card for pharmacies’ 2018 profits.
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