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Project Citation: 

Starc, Amanda, and Swanson, Ashley. Data and Code for: Preferred Pharmacy Networks and Drug Costs. Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-07-20.

Project Description

Summary:  View help for Summary
Selective contracting is an increasingly popular tool for reducing healthcare costs, but any savings must be weighed against consumer surplus losses from restricted access. Recently, many prescription drug plans utilize preferred pharmacy networks to reduce drug prices. Our results suggest that Medicare Part D plans with preferred pharmacy networks pay lower retail drug prices, while subsidized enrollees’ insensitivity to preferred pharmacy cost-sharing discounts reduces these savings. We then estimate pharmacy demand models to quantify the costs and benefits of preferred pharmacy networks, finding that the average enrollee benefits from preferred pharmacy contracting, due to reduced out-of-pocket costs at preferred pharmacies.

Scope of Project

Subject Terms:  View help for Subject Terms prescription drugs; insurance coverage
JEL Classification:  View help for JEL Classification
      I13 Health Insurance, Public and Private
      L10 Market Structure, Firm Strategy, and Market Performance: General
Geographic Coverage:  View help for Geographic Coverage United States
Time Period(s):  View help for Time Period(s) 2011 – 2014 (2011-2014)

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