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

Authors

Jonathan Klick, University of Pennsylvania Carey Law SchoolFollow
Joshua D. Wright, George Mason UniversityFollow

ORCID

Jonathan Klick 0000-0003-1505-360X

Document Type

Article

Publication Date

2015

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 total state healthcare spending, 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.

Keywords

managed care, pharmacy benefit managers, spending, selective contracting

Publication Title

American Law & Economics Review

Publication Citation

17 Am. L. & Econ. Rev. 192 (2015)

Repository Citation

Klick, Jonathan and Wright, Joshua D., "The Effect of Any Willing Provider and Freedom of Choice Laws on Prescription Drug Expenditures" (2015). All Faculty Scholarship. 438.
https://scholarship.law.upenn.edu/faculty_scholarship/438