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New TRICARE Pharmacy Contract


In October 2021, we reported a major departure from the TRICARE pharmacy network; the TRICARE partnerships with Walmart and Sam’s Club pharmacies ended when both left the network in 2021.

That could have been the end of the story, but it was not. In October 2022, we reported another story about thousands of TRICARE beneficiaries also potentially dropping out of the network over disagreements over pricing. The actual overall number was under 15 thousand pharmacies leaving in 2022.

Add to that an announcement on the TRICARE official site from December 2022 that Kroger and its associated brands were also leaving the network, and it’s no surprise that Military Times reported, “Advocates and lawmakers have expressed concern about the decrease in pharmacies and its effect on beneficiaries.”

Related: Ultimate TRICARE Guide

A New TRICARE Contract

On March 10, 2023, the Under Secretary for Personnel and Readiness wrote an op-ed published on Army.mil, stating there was a need to “correct the record” based on criticism of a new TRICARE contract replacing the version pharmacies operated under previously.

The op-ed states, “The previous (TRICARE) contract had two major problems.” TRICARE’s former system used a “straight-line distance” measurement from a beneficiary’s house to a network pharmacy.

As such, “it failed to consider traffic, road conditions, or topography—such as the need to cross a body of water or go around a mountain—that could make for an unacceptably long journey.

Related: TRICARE for Active Duty Service Members

Pharmacy Efficiency Issues

Another complaint about the old system was that it was inefficient, according to the op-ed. “The network included pharmacies that were filling few or no prescriptions for our beneficiaries, resulting in unnecessarily high costs.”

The op-ed notes that the DoD recognized a way to “improve service for beneficiaries” while saving money via a more “competitively priced” network.

Results of the New TRICARE Pharmacy Contract

The op-ed claims that under the new agreement, nearly all (98%) of TRICARE pharmacy users “live within 15 minutes’ driving time of a network retail pharmacy, and more than 99% live within a 30-minute drive.”

According to the Undersecretary of Personnel and Readiness, that puts TRICARE within standards established by the Veterans Health Administration. It is also said to exceed “the Medicare pharmacy-access standard.”

The op-ed claims that some 4 thousand pharmacies that departed the TRICARE network have since returned. But some feel the return of 4 thousand out of an estimated 15 thousand departing pharmacies may not be enough to ease concerns over the exodus. But even with those numbers, DoD officials seem to be celebrating a win with the new pharmacy contract.

A More Efficient Pharmacy Contract?

The op-ed concludes with a statement acknowledging that the new TRICARE pharmacy policies have “generated feedback” but argues that the new agreement is “more efficient and does right by beneficiaries and taxpayers.”

And it’s worth noting that the DoD also claims to have created the new pharmacy contract “while maintaining among the lowest cost-sharing of any health plan.”

As evidence of this, the article notes that TRICARE users can fill prescriptions in various ways “for $0 copays—that’s right, no out-of-pocket cost—at a military pharmacy.” At a retail pharmacy, the op-ed notes, a 30-day prescription “costs no more than $14 for generics (TRICARE beneficiaries pay the lower of the actual cost or $14) and $38 for name-brand drugs.”

Related: TRICARE Prime Versus Select: How to Decide

About the author

Editor-in-Chief | + posts

Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.