Restrictive Drug Plan Regulations Will Hurt Patients

Source: NCPA

Increasing unnecessary regulations on drug plans could inflict higher costs on the 220 million Americans who get their medications through a managed drug plan, according to a  new report by National Center for Policy Analysis Senior Fellow Devon Herrick.

“The degree to which drug benefit plans are managed efficiently helps makes medications affordable,” says Herrick. “Blatant protectionism through restrictive drug plan regulations may be touted as consumer protections, but more often than not they are designed to benefit local pharmacy service providers at the expense of consumers.”

Drug therapy is the most cost-effective way to treat most conditions. Yet recent legislative proposals aim to weaken or prohibit the agreements health plans negotiate with pharmacy networks:

  • In early 2014, the Centers for Medicare and Medicaid Services proposed a ban on exclusive “preferred networks,” where seniors are offered lower cost-sharing in return for patronizing a preferred pharmacy network.  Many industry observers believed the proposal was due to lobbying by pharmacy trade groups that preferred to avoid competitive bidding for inclusion as a network provider.
  • Also in 2014, California debated and narrowly avoided perverse regulations that would have forced health plans to use unqualified pharmacies to administer the most advanced, specialty drug therapies; and made it harder to offer discounts for mail-order drug delivery to enrollees’ homes.  
  • In early 2015, the Colorado Senate introduced a bill to prohibit health plans from offering financial incentives (for instance, lower-cost sharing) to fill costly specialty drugs at designated network pharmacies or by health plans’ lower-cost, mail-order pharmacies.  
  • Arkansas just passed a new law increasing the paperwork burden on drug plans and allowing pharmacies to refuse to fill those prescriptions deemed unprofitable — despite prior agreements to participate in the plan.

 “Drugs are the greatest bargain in the U.S. health system,” says Herrick. “Residents of states contemplating restrictive drug plan regulations should tell their elected representatives to resist these initiatives and allow competition to keep consumers’ costs in check.”


Watch more on drug plan regulations at


New Drug Plan Regulations Protect Pharmacies, Harm Consumers