Abstract

http://ssrn.com/abstract=2183279
 
 

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The Effect of Any Willing Provider and Freedom of Choice Laws on Prescription Drug Expenditures


Jonathan Klick


University of Pennsylvania Law School; Erasmus School of Law; PERC - Property and Environment Research Center

Joshua D. Wright


Federal Trade Commission; George Mason University School of Law

February 24, 2014

U of Penn, Inst for Law & Econ Research Paper No. 12-39

Abstract:     
Any Willing Provider and Freedom of Choice laws restrict the ability of managed care entities, including pharmacy benefit managers, to selectively contract with providers. The managed care entities argue this limits their ability to generate cost savings, while proponents of the laws suggest that such selective contracts limit competition, leading to an increase in aggregate costs. We examine the effect of state adoption of such laws on prescription drug expenditures, finding that any willing provider/freedom of choice laws are associated with cost increases of at least 3 percent. These results suggest that these laws are harmful from a spending perspective.

Number of Pages in PDF File: 24

Keywords: managed care, pharmacy benefit managers, spending, selective contracting

JEL Classification: I18, K32, L42

working papers series


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Date posted: December 1, 2012 ; Last revised: February 26, 2014

Suggested Citation

Klick, Jonathan and Wright, Joshua D., The Effect of Any Willing Provider and Freedom of Choice Laws on Prescription Drug Expenditures (February 24, 2014). U of Penn, Inst for Law & Econ Research Paper No. 12-39. Available at SSRN: http://ssrn.com/abstract=2183279 or http://dx.doi.org/10.2139/ssrn.2183279

Contact Information

Jonathan Klick (Contact Author)
University of Pennsylvania Law School ( email )
3501 Sansom Street
Philadelphia, PA 19104
United States
2157463455 (Phone)
Erasmus School of Law ( email )
3000 DR Rotterdam
Netherlands
PERC - Property and Environment Research Center
2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

Joshua D. Wright
Federal Trade Commission ( email )
601 New Jersey Ave., NW
Washington, DC 20580
United States
George Mason University School of Law ( email )
3301 Fairfax Drive
Arlington, VA 22201
United States
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