Pharmacy Equity Laws

Mail order pharmacy companies have been expanding rapidly and capturing an ever larger share of prescription drug sales.  In 2008, mail order accounted for about 20 percent of all prescription spending.

The growth in mail order has little to do with consumer preferences. Numerous surveys have found that consumers strongly prefer retail pharmacies, which offer face-to-face consultations, medical information, and a range of healthcare services.

The growth in mail order can be attributed to insurance plans, many of which use economic incentives and other means to coerce consumers into using a mail order pharmacy. Pharmacy benefit management companies (PBMs), which contract with HMOs to provide prescription drug benefits, often, for example, require a substantially lower co-pay if the consumer purchases by mail rather than through a retail store. Their motivation? The top three PBMs, which cover two-thirds of all insured Americans, own their own mail order companies.  (See the NCPA’s Fact Sheet on PBMs for more information.)

Several states, including Arkansas, Illinois, Mississippi, Missouri, and Tennessee, have enacted pharmacy equity laws that require insurers to make co-pays equal regardless of the type of pharmacy the consumer chooses.


Drug Benefit Equity Law – Illinois

Illinois enacted an HMO reform bill in 1999 that includes a provision barring health insurers from favoring certain types of pharmacies (e.g., mail order) over others (e.g., independent retail pharmacies). … Read More
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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.