5 Things to Know About Pharmacy Networks and Medicare Drug Costs

You could save money on your Rx medications, depending on which pharmacy you visit

Rachel Nania and Tony Pugh,

Updated December 12, 2025

AARP

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En español

Published October 22, 2024

/ Updated December 12, 2025

arrangement of white tablets forming a glowing dollar sign on a light blue surface

Gregory Reid/Gallery Stock

Key takeaways

Where you buy prescriptions can matter to your budget.
Look for in-network pharmacies if you want to pay less.
Preferred druggists offer best deals. Prices aren’t uniform.
Shop around with Medicare Plan Finder tool or call.
Cost may not be your only consideration.

Whether you have a new Part D plan for 2026 or kept one that you’ve had for years, don’t forget to review your plan’s pharmacy network, even though Medicare open enrollment is over.

Just like health plans have in-network doctors and hospitals, stand-alone Part D drug plans and private Medicare Advantage plans with drug coverage have in-network pharmacies where you’ll save money on your prescription medications. Some plans cover only medications filled at in-network pharmacies.

And some plans go a step further and have in-network preferred pharmacies where consumers can pay even less on their out-of-pocket drug costs.

“Many people understand that there are certain pharmacies where their drugs may be less expensive,” says James McSpadden, senior policy adviser at AARP’s Public Policy Institute and the author of a September 2024 AARP report on the topic. “But I’m not sure that people fully grasp the cost differences that may be available” between in-network and out-of-network pharmacies and even between pharmacies within a network.

Here are five things to know about how pharmacy networks work and steps you can take to get the best deal on your meds.

1. An in-network pharmacy offers the best Rx benefits

Ever notice how the same medication can cost more at one pharmacy versus another?

If you’re filling your prescription drugs at an out-of-network pharmacy, you’ll most likely pay more than at an in-network pharmacy. That’s because health plans contract with a group, or network, of pharmacies — including in-person pharmacies and mail-order pharmacies — to offer prescription drugs and other services to their members at a lower cost.

So see if your favorite pharmacy is included in your plan’s network. If not, your budget will thank you for finding a new favorite within your prescription drug plan.

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.

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.

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Rachel Nania is an award-winning health editor and writer at AARP.org, who covers a range of topics including diseases and treatments.

Tony Pugh is an award-winning writer and editor covering Medicare for AARP. He has also covered Medicare for Bloomberg Law and as a national correspondent for Knight Ridder/McClatchy Newspapers.

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