“No magic rule”
“There is no magic rule,” Swanson said. “We need to drive enough volume to entice pharmacies to participate without impeding members’ access. Pharmacy benefit plans in the commercial space have been around for a long time, so there is quite a bit of experience to rely on.”
The typical preferred pharmacy network for Aetna includes 10,000 to 20,000 pharmacies nationally, Swanson said.
Fein offers a slightly broader definition: any network that includes less than 50% of providers, which would top out at about 30,000 pharmacies nationally.
Consumer resistance is generally not an impediment to narrow networks, Fein said. Kaiser Permanente, for example, gets high marks for quality and patient satisfaction despite having a closed network. Most consumers are willing to use a specific pharmacy as long as they see concrete benefits such as lower copays.
Last year, CMS found that negotiated pricing for the top 25 brands and 25 generics in the Part D program at preferred retail pharmacies is lower than at non-preferred pharmacies. However, according to CMS, when mail-order costs were included, some preferred-network pharmacies were offering “somewhat higher negotiated prices.”
“Preferred provider networks are a very common part of healthcare that pharmacy has successfully avoided for decades,” Fein said. “Narrow networks already dominate Part D and are starting to penetrate commercial networks.”
This article also appears in the March issue of Managed Healthcare Executive, another Advanstar publication.
Fred Gebhart is a healthcare writer based in Gold Hill, Ore.