What to Know About Preferred Pharmacies with Medicare

Health Line

23-07-2025

Medicare Part D plans typically have preferred in-network pharmacies, which usually offer a discount to certain plan members.
Medicare Part D covers prescription drugs. If you have Original Medicare (parts A and B), you can purchase a stand-alone Part D plan from a Medicare-approved private insurance company.
Most Medicare Advantage (Part C) plans include prescription drug coverage.
Both Part D and Medicare Advantage plans will often have a list of in-network preferred pharmacies where you can receive prescriptions at a lower cost.
What is a Medicare preferred pharmacy?
A preferred pharmacy is a network pharmacy that offers prescription drugs to Part D beneficiaries at negotiated lower prices.
These pharmacies contract at lower rates because it gives an exchange of increased volume of users. A recent analysis showed that the adoption of preferred network pharmacies by Medicare Part D plans reduced spending by 2% for beneficiaries.
Over 90% of Part D plans use preferred pharmacy networks. Using a preferred pharmacy can help save on your out-of-pocket costs, such as coinsurance and copayments.
Vs. nonpreferred
A nonpreferred pharmacy is a pharmacy that accepts Part D coverage for prescription drugs, but at a higher cost than preferred pharmacies.
Preferred pharmacy vs. in-network pharmacy
Medicare Part D plans generally have contracts with pharmacies that are in their network. Using in-network pharmacies means you can typically get your prescriptions at a discounted price. Some Part D plans will only cover your prescriptions if you use an in-network pharmacy.
Since Part D plans are offered by private insurance companies, they can choose what drugs they cover, what pharmacies are in-network, and costs, as long as they meet Medicare's standards.
To find out if a particular pharmacy is in your plan's network, you can contact your plan, the pharmacy, or Medicare (800-633-4227).
Preferred pharmacy vs. mail-order pharmacy
Some Part D plans may offer the ability to use a mail-order pharmacy so you can have your prescriptions sent directly to your house. With a mail-order pharmacy, you may be able to receive 3 months of your prescriptions at a time.
Your Part D plan may also allow you to automatically refill your prescriptions when using this service.
Mail-order pharmacies may be a cost-effective and convenient way for you to get your prescriptions. You can contact your plan for more information and to see if mail-order pharmacies are available.
Preferred pharmacy vs. out-of-network pharmacy
An out-of-network pharmacy is one that's not contracted with a Part D plan. If a pharmacy is not in your plan's network, you'll typically pay a higher out-of-pocket cost for your prescriptions. Some plans may not cover your prescriptions from an out-of-network pharmacy.
Keep in mind that if you do get your prescriptions from an out-of-network pharmacy, you may have to pay the full cost for them. Some plans may offer a reimbursement for part of your out-of-pocket cost. You can contact your plan for more information.
Summary
Medicare Part D plans will typically have in-network pharmacies. These are pharmacies that are contracted with the plan to offer prescriptions at lower costs to beneficiaries.
Some Part D plans will not cover your prescriptions if you don't use an in-network pharmacy.
Sometimes, Part D plans will also have preferred in-network pharmacies. These are pharmacies that have agreed to give larger discounts to Medicare beneficiaries in exchange for higher volumes of use.
You can check with your plan or contact Medicare for more information on in-network and preferred pharmacies.
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