5 Things to Know About Pharmacy Networks and Medicare Drug Costs

And next year, make sure that your favorite pharmacy and possibly a few other convenient ones are included in your plan’s network. Your pharmacy should be able to let you know if it’s in-network for your plan or a plan that you are considering.

2. A preferred pharmacy can save you even more

Within a pharmacy network, your plan may have preferred pharmacies with lower out-of-pocket expenses for your medications than an in-network pharmacy that isn’t preferred. These savings on charges like copayments and coinsurance vary, but one study in McSpadden’s report found that people who use a preferred pharmacy could save $2 to $15 per fill on generic drugs.

Preferred pharmacy networks are becoming more common among Medicare health plans. As of 2023, nearly 98 percent of stand-alone Part D plans in original Medicare had preferred pharmacy networks, according to a study published in the May 2025 edition of Health Affairs journal. That’s up from 7 percent in 2011, according to KFF health policy nonprofit.

Fewer Medicare Advantage Part D plans use preferred pharmacy networks but they are still common, about 44 percent in 2023, down from 60 percent the previous year, the Health Affairs study says. Yet in 2015, about a quarter of Medicare Advantage plans with drug coverage had them, KFF says.

3. Drug costs can vary between preferred pharmacies

Here’s where things can get confusing for consumers: The amount you’ll pay for your medications can vary even between preferred pharmacies because of differences in negotiations and other variables.

In other words, you may have to pay more to fill your prescription at one in-network preferred pharmacy than another that’s also preferred and in your network.

“The variation of annual out-of-pocket cost between preferred pharmacies could be hundreds of dollars, depending on the drug and the plan,” according to AARP’s report.

Within a pharmacy network, your plan may have preferred pharmacies with lower out-of-pocket expenses for your medications than an in-network pharmacy that isn’t preferred. These savings on charges like copayments and coinsurance vary, but one study in McSpadden’s report found that people who use a preferred pharmacy could save $2 to $15 per fill on generic drugs.

Preferred pharmacy networks are becoming more common among Medicare health plans. As of 2023, nearly 98 percent of stand-alone Part D plans in original Medicare had preferred pharmacy networks, according to a study published in the May 2025 edition of Health Affairs journal. That’s up from 7 percent in 2011, according to KFF health policy nonprofit.

Fewer Medicare Advantage Part D plans use preferred pharmacy networks but they are still common, about 44 percent in 2023, down from 60 percent the previous year, the Health Affairs study says. Yet in 2015, about a quarter of Medicare Advantage plans with drug coverage had them, KFF says.

3. Drug costs can vary between preferred pharmacies

Here’s where things can get confusing for consumers: The amount you’ll pay for your medications can vary even between preferred pharmacies because of differences in negotiations and other variables.

In other words, you may have to pay more to fill your prescription at one in-network preferred pharmacy than another that’s also preferred and in your network.

“The variation of annual out-of-pocket cost between preferred pharmacies could be hundreds of dollars, depending on the drug and the plan,” according to AARP’s report.

4. Doing some homework could save you money  

The good news: You have a few ways to find out where you stand to save the most on your prescription medications.

Your health plan can tell you the in-network and preferred pharmacies in your area and what your drugs might cost at these locations. You also can use Medicare’s Plan Finder tool — it’s still up after open enrollment — to “get a snapshot” of what your medicines may cost at a few different pharmacies in your area, McSpadden says. 

“The best that consumers can do is to do their homework and review their plans,” he says. “But all of this can’t sit on the back of consumers. We have to do a better job of making sure that plans themselves are being as transparent as possible, and that this information is getting to consumers so that they can make an informed choice, and that it’s not overwhelming.”

5. Consider other factors when reviewing your drug plan

In addition to finding a pharmacy that can save you money on your medications, consider whether the pharmacy has convenient hours and is close by or easy to access.

If you’re taking a medication that a specialty pharmacy needs to mix, or “compound,” based on your doctor’s prescription, that’s another thing to keep in mind when choosing a pharmacy or reviewing your plan, McSpadden says.

“And if you live in a rural area where you don’t have easy access to a brick-and-mortar pharmacy, then you know you’ll need to make sure your plan provides you access to mail-order options,” he says. While you have to factor in delivery time from the mail-order pharmacies, they may give you the least expensive cost per pill for some medicines you need to take regularly.