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.
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.
