Owned-Pharmacy Payment Advantage Is 23 Points More Common in Employer Plans

Plan type changes the size of the payment advantage

For the 100 drugs with the highest total Medicare Part D spending, GAO’s plan-type appendix reports lower payments at owned pharmacies in 69% of employer-plan comparisons and 46% of non-employer-plan comparisons. What’s the Scoop With Broach calculated a 23 percentage-point difference between those published shares.

The corresponding shares with lower cost sharing were 92% and 85%, a seven-point difference. The payment gap is therefore 16 points larger than the cost-sharing gap. That is a comparison of how often payments were lower, not a claim that a prescription costs 23% less.

This extends our earlier drug-level report by reconstructing Appendix II’s employer-versus-non-employer rows. It asks a different accountability question: how much does plan design change the apparent advantage of pharmacies under common ownership with the sponsor?

Patient cost and pharmacy payment are separate measures

A lower payment to the dispensing pharmacy is not identical to a lower bill for the patient. Point-of-sale payments include the sponsor’s reimbursement and amounts paid by or on behalf of beneficiaries. Manufacturer rebates and later pharmacy payment adjustments occur elsewhere in the transaction.

The cost-sharing definitions also differ by plan type. Employer-plan cost sharing includes only the beneficiary’s own payment; the non-employer measure includes certain payments on the beneficiary’s behalf. We therefore report the seven-point descriptive difference without presenting it as a like-for-like estimate of a retiree’s out-of-pocket savings.

Another appendix shows a separate sensitivity to which drugs are selected. Owned pharmacies had lower gross payments in 68% of comparisons for the 100 highest-total-spending drugs, versus 45% for the 20 with the highest payment per 30-day supply—a second 23-point difference. Those are aggregated sponsor/drug comparisons, not a literal count of 45% of 20 medicines.

The smaller set excludes drugs with fewer than 50 claims at each sponsor’s own pharmacies. Moving to that set changes the drug mix and some included observations. It does not isolate pharmacy ownership as the cause of a price difference.

A historical comparison cannot become a 2026 price quote

The records concern 2023 data for four selected vertically integrated sponsors, accounting for more than 40% of Part D enrollment that year. They are not representative of every sponsor or later year. Pharmacy-level performance adjustments were unavailable, so the point-of-sale comparison does not capture every later transfer between sponsor and pharmacy. HHS supplied no comments on GAO’s report.

CMS’s 2026 benefit instructions provide a concrete reason to preserve the date: the annual out-of-pocket threshold is now $2,100, and negotiated prices and a selected-drug subsidy alter payment responsibility. Consequently, historical cost-sharing values cannot be presented as current amounts a beneficiary should expect to pay.

We compared the labeled rows of the appendices and subtracted percentages; we did not obtain private contracts or reanalyze individual claims. The results establish sensitivity to drug selection and plan type. They do not establish unlawful steering, a universal ownership premium or the best pharmacy for a particular prescription.