LTC Pharmacies Need a Sustainable Payment Model Before It’s Too Late!
Lower drug prices are good for consumers, but the policy changes driving them have unintended consequences for LTC pharmacies, facilities, and patients, threatening access to medicines and essential pharmacy services, increasing costs, and encouraging more anticompetitive consolidation in health care.
The impact on LTC pharmacies will be severe and unless Congress acts, many small LTC pharmacies—which represent more than 90% of the sector—will close their doors in 2026.
The LTC pharmacy payment model is flawed. Medicare Part D Plans administered by pharmacy benefit managers (PBMs) force LTC pharmacies to subsidize inadequate payment for their specialized services with revenues from expensive brand name drugs. Policies driving lower drug prices like the American Rescue Plan and Inflation Reduction Act will unintentionally break the model with catastrophic consequences.
LTC residents rely heavily on insulin, inhalers, and 8 of the first 10 drugs subject to negotiated Medicare prices in 2026. If the flawed payment model isn’t fixed, most LTC pharmacies may not survive, and many seniors will lose access to essential services. The problem will only get worse as more branded drugs are subject to price negotiations each year.
Congress must ensure that Medicare Part D payments for LTC pharmacy services reflect the actual cost of essential and legally required services and must account for cost increases over time.
Congress must give CMS the direction and authority to level the negotiating playing field for pharmacies by assuring that Part D contracts allow LTC pharmacies to maintain services.
LTC pharmacies provide specialized services to patients in long-term care as required by federal law. There is no substitute for the essential services they provide, including: enhanced medication management, consultant services, patient-specific packaging, heightened quality controls, 24/7/365 delivery and more.
