Any Willing Provider and Negotiated Retail Pharmaceutical Prices

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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 2010 the state of Maine required insurance plans subject to state law to reimburse any pharmacy that agrees to the plan's terms. Using insurance claim level data and across state variation in exposure to the regulation, we estimate increases in negotiated pharmaceutical prices. The increase is concentrated on generic pharmaceuticals. Our results are consistent with AWP regulations reducing competition by inhibiting the ability of insurers to move demand across competing pharmacies.