Growing up, my parents always visited the same drug store on the main street in our small town. They were on a first-name basis with the pharmacist, who worked at that store until he retired.
That was very typical of life in the 1960s, when 70% of pharmacists worked at independent pharmacies. Those numbers have flipped and now 62% of pharmacies are part of large chains.
The introduction of Part D prescription drug coverage also has had an impact on pharmacies. According to KFF, in 2025, the average beneficiary can choose from 14 stand-alone or 34 Medicare Advantage plans that include drug coverage. Who knows how many pharmacy options are available?
When choosing a Part D plan, Medicare beneficiaries want to know that their drugs will be covered and how much they will pay. But they also need to give some attention to the pharmacies because they can have a big impact on coverage and cost.
Here are some things to know about pharmacies and Part D.
1. Part D pharmacies work the same way whether you have a Medicare Advantage plan or a stand-alone Part D drug plan.
The only significant differences may be the premiums and the plan’s deductible.
2. You must get your medications from an in-network pharmacy.
The Part D plan will pay only for drugs obtained through a pharmacy that is in its network. Find network pharmacies through your medicare.gov account or the plan’s website. You can also contact customer service or check with your local pharmacy.
3. If you use an out-of-network pharmacy, you’ll be responsible for the full cost of the medication.
Besides facing a big bill, the costs will not count toward meeting the drug plan’s deductible or reaching the $2,000 cap on Part D costs, and the Medicare Prescription Payment Plan does not apply. You’ll have to pay for the drug at the point of sale.
4. You are not locked into one pharmacy.
You can mix and match retail pharmacies and mail service, as long as the pharmacies are in-network.
5. Generally, a preferred pharmacy will be the most cost-effective option.
This is a pharmacy that has a contract with the plan to offer covered drugs at lower out-of-pocket costs than what you would pay at other pharmacies. Not every drug plan includes preferred pharmacies.
6. But sometimes a preferred pharmacy is not the best deal.
For instance, my client’s Part D plan offered one preferred and one in-network pharmacy that would work for her. Her annual costs at the preferred pharmacy would be $1,879. At the in-network pharmacy, she would pay $1,059.
7. Costs for drugs in the same plan can vary considerably between pharmacies.
The variation comes about because pharmacies negotiate with the drug plan, manufacturers, pharmacy benefits managers and others. Those negotiations can result in a wide range of costs.
Here’s another example. A client took a Tier 4 medication, with a 39% copay. The retail price for that drug at one pharmacy was $17.43 and her cost was $6.80. The retail cost at another pharmacy was $130.37 with cost-sharing of $50.85.
Tips for Managing Part D Pharmacies
- Check your plan’s Evidence of Coverage for information about pharmacies and networks.
- Compare the costs of your drugs at various in-network pharmacies. You may find opportunities to save, especially important if you won’t hit the $2,000 cap.
- Know that pharmacy networks can change at any time.
- Open any notices that you receive from your plan promptly. There may be changes in the formulary, coverage rules or pharmacy networks.
- Mark your calendar for the annual Open Enrollment Plan, October 15-December 7, less than four months away. Heading into the New Year, drug plans can make big changes and so can you. If you don’t pay attention, you’ll be sorry in January.
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