Data and Code for: Preferred Pharmacy Networks and Drug Costs

Principal Investigator(s): View help for Principal Investigator(s) Amanda Starc, Northwestern University; Ashley Swanson, Columbia University

Version: View help for Version V1

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final_AEJ			09/29/2020 12:14:PM
README.pdf	application/pdf	99.5 KB	09/29/2020 08:12:AM

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. https://doi.org/10.3886/E120484V1

Project Description

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: prescription drugs; insurance coverage

JEL Classification:
I13 Health Insurance, Public and Private
L10 Market Structure, Firm Strategy, and Market Performance: General

Geographic Coverage: United States

Time Period(s): 2011 – 2014 (2011-2014)

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Published Versions

V1 [2021-07-20]

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