The Effect of Medicare Part D Plan Switching on Sole Community Pharmacies and the Patients

Return to search

The Effect of Medicare Part D Plan Switching and Formulary Changes on Sole Community Pharmacies and the Patients They Serve overview

Sole community independent pharmacies (i.e., those located at least 10 miles from the next closest retail pharmacy) are the primary access point to pharmacy services for residents in just over one thousand small communities throughout the United States. These pharmacies are susceptible to changes in the Medicare Part D program: Six out of ten receive 90 percent or more of their store’s revenue from prescription sales and on average 37 percent of these prescriptions are paid for by Medicare.1 Under Part D, Medicare Prescription Drug Plans (PDPs) can frequently change formularies, but beneficiaries who are not dually eligible for Medicare and Medicaid can only switch PDPs once a year (beneficiaries who are dually eligible can switch plans as often as once a month). These phenomena can create administrative burdens for small pharmacies, which must find ways to accommodate their patients by assisting with prior authorization of new medications or by contracting with a new PDP. Changes in formularies and plans can also disrupt timely access to medications. This brief presents findings from a 2008 survey of 401 pharmacist-owners of sole community independent pharmacies. The findings will help policymakers better understand the extent and impact of beneficiary plan switching and changing formulary lists