More than half of independent pharmacies are warning that they might no longer stock the first 10 drugs subject to new lower, Medicare-negotiated prices once the program starts in 2026. Over 9 in 10 said they are “strongly” or “somewhat” considering not distributing the drugs.
Nine million seniors take at least one of the targeted medications, making this month’s survey results from the National Community Pharmacists Association something of a canary in a coal mine.
Pharmacists across settings insist that a lack of access to such popular drugs — used to treat heart disease, diabetes, clotting and more — could become a real crisis for seniors who are supposed to benefit from lower prices.
In survey results published Oct. 15, 51% of respondents said they were “strongly considering not stocking the drugs because of the potential underwater reimbursements from pharmacy benefit managers.” Another 40% say they are “somewhat considering” not stocking the medications, NCPA said.
NCPA is a membership advocacy organization that includes a long-term care division. It shares some membership overlap with the American Society of Consultant Pharmacists, which has been trying to raise awareness about how the Inflation Reduction Act’s drug pricing provisions threaten access and services that have made pharmacists key partners to nursing homes and other residential care providers.
“Our pharmacies are not going to not carry things or not buy things, but if those pharmacies go out of business, what fills the gap? Is there any pharmacy left to fill the gap? That’s more what we think about,” ASCP CEO Chaz Worz told McKnight’s Long-Term Care News.
NCPA CEO B. Douglas Hoey painted a dire picture if Congress doesn’t bring some kind of relief “this year.”
“[A] lot of pharmacies will drop out of the Medicare Part D program and patients will be stranded,” he forecast in a statement. “Many others will close their doors permanently, leading to more consumers living in pharmacy deserts.”
Cutbacks may be ahead
Worz added that pressure on pricing has been in the community for “some time.”
“Now it’s sort of influencing long-term care as well,” he noted. “We don’t have solutions if a long-term care pharmacy were to close in a rural area and it’s the only pharmacy serving that area.”
As the NCPA survey appears to indicate, even if an independent pharmacy were still operating nearby, it may very well refuse to carry a given drug because it costs them too much to do so. Further complicating matters, CMS plans to list another 15 drugs for price negotiation by February, with lower prices by 2027.
Low-balling dispensing fees and being shorted in other ways, Worz said, have been traditional tradeoffs for a larger share of the drug price. But those “sins of the past” might make the model unsustainable when combined with lower payment and higher upfront costs for long-term care pharmacists and others.
“Pharmacy, as a whole, has been trained and pushed to think generics are the least expensive, and we want to try to promote those. The system has said, you’re not going to make any money on generics, but that’s OK, because you make money over on these branded medications,” Worz said. “Well, now you’re taking away the money you can make on the branded medications and you’re just not leaving space for a pharmacy to survive.”
He and others are trying to emphasize to policymakers the important services delivered to nursing homes, which can include special packing for safer distribution, emergency and 24/7 deliveries, and routine medication reviews for patient safety. While he doesn’t believe his members would decline to carry the 10 Medicare-priced drugs, he expects they will look for other ways to control costs if the government doesn’t remedy the loss of revenue.
“All those services are a little bit different than what you might get in a community setting, and if you’re not going to acknowledge or fairly reimburse those services, those services start to fall away. The survival of those pharmacies is at risk and the system suffers as a consequence,” Worz explained. “Now you’re risking those services, and the quality of those services. That’s kind of the world we’re in. It’s no surprise that smaller independents are feeling it first. Certainly, even big pharmacies are feeling the impact of this.”
Little time for Medicare fixes
An estimated 7,000 pharmacies have closed in the last five years, with Walgreens and CVS announcing thousands more closures to come.
If national chains can’t take the heat, the new structure could be that much more problematic for independent pharmacies without deep pockets. NCPA estimates pharmacies that dispense drugs with Medicare-negotiated prices will each have to tie up $27,000 a month to stock the drugs and wait a month or longer for manufacturer refunds.
“For many pharmacies, the resulting cash flow crunch will be too much for them to absorb in an already difficult payment environment,” the association said in releasing survey results. “Importantly, the CMS guidance offered no assurances that the payments to pharmacies from PBM middlemen would cover the pharmacy’s costs to acquire and dispense the medicine.”
That concern has led Worz to seek meetings with policymakers, who he says are now deep in implementation mode. There remains just a little more than a year to tackle deep questions that will affect not just pricing but access to affected medications if more pharmacies go out of business. The Senior Care Pharmacy Coalition has previously warned that without fixes, the program threatens LTC pharmacists’ “very existence.”
Interestingly, Worz said some independent pharmacists got into the long-term care field to help add scale in the small communities they serve. Now, though, that approach is backfiring
“On that part of the business they were seeking because it was helping keep them alive, it’s now being diminished and it’s threatening the overall health of their pharmacies,” he said.
The NCPA survey was conducted from Sept. 24-Oct. 11 and sent to approximately 4,135 independent pharmacy owners and managers, with approximately 465 responding.
