Abstract
IMPORTANCE: Increasing integration across medical services may have important implications for health care quality and spending. One major but poorly understood dimension of integration is between physician organizations and pharmacies for self-administered drugs or in-house pharmacies. OBJECTIVE: To describe trends in the use of in-house pharmacies, associated physician organization characteristics, and associated drug prices. DESIGN, SETTING, AND PARTICIPANTS: A cross-sectional study was conducted from calendar years 2011 to 2019. Participants included 20% of beneficiaries enrolled in fee-for-service Medicare Parts A, B, and D. Data analysis was performed from September 15, 2020, to December 20, 2023. EXPOSURES: Prescriptions filled by in-house pharmacies. MAIN OUTCOMES AND MEASURES: The share of Medicare Part D spending filled by in-house pharmacies by drug class, costliness, and specialty was evaluated. Growth in the number of physician organizations and physicians in organizations with in-house pharmacies was measured in 5 specialties: medical oncology, urology, infectious disease, gastroenterology, and rheumatology. Characteristics of physician organizations with in-house pharmacies and drug prices at in-house vs other pharmacies are described. RESULTS: Among 8 020 652 patients (median age, 72 [IQR, 66-81] years; 4 570 114 [57.0%] women), there was substantial growth in the share of Medicare Part D spending on high-cost drugs filled at in-house pharmacies from 2011 to 2019, including oral anticancer treatments (from 10% to 34%), antivirals (from 12% to 20%), and immunosuppressants (from 2% to 9%). By 2019, 63% of medical oncologists, 20% of urologists, 29% of infectious disease specialists, 21% of gastroenterologists, and 22% of rheumatologists were in organizations with specialty-relevant in-house pharmacies. Larger organizations had a greater likelihood of having an in-house pharmacy (0.75 percentage point increase [95% CI, 0.56-0.94] per each additional physician), as did organizations owning hospitals enrolled in the 340B Drug Discount Program (10.91 percentage point increased likelihood [95% CI, 6.33-15.48]). Point-of-sale prices for high-cost drugs were 1.76% [95% CI, 1.66%-1.87%] lower at in-house vs other pharmacies. CONCLUSIONS AND RELEVANCE: In this cross-sectional study of physician organization-operated pharmacies, in-house pharmacies were increasingly used from 2011 to 2019, especially for high-cost drugs, potentially associated with organizations' financial incentives. In-house pharmacies offered high-cost drugs at lower prices, in contrast to findings of integration in other contexts, but their growth highlights a need to understand implications for patient care.