What's Happening?
A new study published in JAMA Health Forum, led by Emily G., has revealed that essential retail pharmacies (ERPs) are less likely to be included in preferred Part D networks, raising concerns about pharmacy access, particularly in rural and underserved
areas. The Consolidated Appropriations Act of 2026 (CAA 2026) defined an ERP as a pharmacy not affiliated with a pharmacy benefit manager (PBM) and lacking another pharmacy within 10 miles in rural areas, 2 miles in suburban areas, or 1 mile in urban areas. Applying this definition to 2023 pharmacy data, the study identified 2,552 ERPs out of 62,072 operational pharmacies, representing 4.11%. Key findings indicate that 56.0% of ERPs were independent pharmacies, 48.2% were located in rural neighborhoods, and 45.0% served pharmacy shortage areas, compared to 20.2% of pharmacies overall. Furthermore, 54.8% of counties with a pharmacy had no ERPs, while in 430 counties, ERPs were the only pharmacies available. The study found that ERPs were preferred by a smaller share of Part D plans (27.0%) compared to non-ERPs (39.3%), with independent ERPs being significantly less preferred (10.5%) than chain ERPs (49.5%).
Why It's Important?
This disparity in preferred network participation for essential retail pharmacies has significant implications for healthcare access, especially for vulnerable populations in rural and pharmacy shortage areas. Exclusion from preferred networks can lead to higher out-of-pocket costs for patients, as their prescriptions may not be covered or may be more expensive at non-preferred pharmacies. This financial burden can deter patients from filling necessary prescriptions, potentially leading to poorer health outcomes. For the pharmacies themselves, being excluded from preferred networks can severely impact their financial viability, as prior research links such exclusions to pharmacy closures. The study highlights a critical flaw in the current system where pharmacies serving the most isolated and underserved communities are paradoxically disadvantaged. This situation exacerbates existing healthcare disparities and undermines efforts to improve access to essential medications, particularly in areas where ERPs are the sole providers. The findings suggest that current PBM contracting and reimbursement practices may prioritize cost-cutting over ensuring equitable access to pharmacy services.
What's Next?
The findings of this study prompt a critical re-evaluation of the definition of essential retail pharmacies and the criteria for inclusion in Part D preferred networks. Experts suggest that the current definition of ERPs, which captures less than 5% of pharmacies, may be too narrow and could exclude many pharmacies at higher risk of closure, thereby impacting access. There will likely be calls for policymakers and healthcare stakeholders to consider adjusting the ERP definition to encompass a broader range of pharmacies that are crucial for maintaining access in underserved areas. Discussions may also arise regarding PBM contracting and reimbursement practices, with potential pressure to implement reforms that ensure fair compensation and inclusion for independent and rural pharmacies. The study's implications could lead to legislative efforts aimed at protecting these vital community resources and ensuring that the focus remains on improving healthcare access rather than solely on cost reduction. Future research may also explore the long-term effects of these network exclusions on patient health outcomes and pharmacy sustainability.
Beyond the Headlines
The issue of essential retail pharmacies being excluded from preferred Part D networks touches upon deeper systemic challenges within the U.S. healthcare landscape. It highlights the tension between market-driven efficiency and the social imperative of equitable access to healthcare. The role of Pharmacy Benefit Managers (PBMs) in dictating network participation and reimbursement rates is a central point of contention, with critics arguing that their practices can inadvertently harm smaller, independent pharmacies that often serve as critical healthcare hubs in their communities. This situation also underscores the broader economic vulnerabilities of rural areas, where businesses, including pharmacies, operate on thinner margins and are more susceptible to adverse policy changes. The potential for pharmacy closures in these areas could create 'pharmacy deserts,' further isolating residents from essential health services. Addressing this issue requires a holistic approach that considers not only the financial aspects of drug distribution but also the social and public health consequences of diminishing pharmacy access, particularly for an aging population and those with chronic conditions.
