Any Willing Provider and Negotiated Retail Pharmaceutical Prices

Daniel Hosken, David Schmidt and Matthew C. Weinberg

Journal of Industrial Economics, 2020, vol. 68, issue 1, 1-39

Abstract: Any Willing Provider (AWP) regulations require insurers to allow health care providers network membership, eliminating an insurer’s ability to commit to a limited network of providers. We study the effect of AWP on prices negotiated between insurers and providers by exploiting the introduction of a regulation targeting retail pharmacies in the state of Maine. Using insurance claim level data and across state variation in exposure to the regulation, we estimate increases in negotiated pharmaceutical prices. Our results are consistent with AWP regulations’ reducing competition by inhibiting the ability of insurers to move demand across competing pharmacies.

Date: 2020
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