How To Select What Pharmacies Are In Your Network?

This seems to be the “meta-question” that everyone is talking around. 

  • Should every pharmacy be in the network?
  • Should mail be allowed?  Should I do mandatory mail?
  • How do I design a limited network?  Is it ok?
  • What about any willing provider?  [should that just be about cost]

Let’s start with the basics…You want a network that meets access standards, has high quality, improves outcomes, keeps members happy, and offers you the best price.

So, how do you build your network to decide who is in or out (ideally)?

  1. Select the minimum number of local pharmacies required to meet access standards for acute medications (this is your baseline)
  2. Look at your best price to add more pharmacies into the network – who will meet your price for generics, brands, 90-day, specialty
  3. Evaluate your tradeoffs – will you get a lower price if you exclude certain pharmacies?  will that impact access?  will that impact care?  will that impact satisfaction?  can you manage the disruption?
  4. Look at difference in satisfaction between pharmacies – should you take a lower priced pharmacy if the satisfaction is less?
  5. Look at difference in outcomes between pharmacies – should you take a pharmacy that has a lower generic fill rate (on an adjusted population) or a lower adherence rate (on an adjusted population) at the same price? 

Network design should look like formulary design.  You have to look at the value versus the cost.  You might include a higher priced pharmacy in the network if it gives you access, better outcomes, or lower net cost (i.e., better GFR).  You might exclude a lower priced pharmacy if it can’t prove any of this or if consumers who go there are dissatisfied. 

At some point, I would think we’ll see more metrics beyond price be used to measure pharmacies – discounts, GFR, safety (quality), medication possession ratio, satisfaction.  That would make this a lot easier with some standards. 

This would make it easier to have discussions about access in NY (for example) as PCMA is doing.  It would make it easier to have discussions about the Department of Defense (for example) as NACDS and NCPA are doing. 

The DoD is a good example here…Since the military (government) buys drugs better than anyone, I can’t imagine how much better some of these metrics would have to be to justify paying the additional costs at retail for fulfillment.  The base pharmacies and the mail order pharmacy all get their drugs from the government contracts.  At mail, the supply is managed separately so that they are replenished under those contracts.  I bet the cost is $10+ on average more for a drug at retail (non-replenishment) than it is elsewhere.  How do you justify that?  In my mind, retail should figure out how to replenish and segregate their inventory to stay in the network rather than fighting the shift away to mail.

One Response to “How To Select What Pharmacies Are In Your Network?”

  1. Hi;
    This question came up recently as my team was discussing other models for managing the rising costs of eprescribing. Creating alternate pharmacy networks was one possibility. But the question remains, who should pay for these high rates of eprescribing? Are there other models that do not utilize the monopoly SureScripts in its eprescribing process? I’d welcome any insights about alternate eprescribing models that are out there. Please feel free to email me directly. Thank you! Sharon

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