Bill Aims to Offset Reimbursement Losses for Long-Term Care Pharmacies Catering to Nursing Homes

DATE: September 24, 2025

By Zahida Siddiqi
Skilled Nursing News

Starting in January, falling prices for costly drugs may strain long-term care pharmacies, but proposed legislation backed by advocacy groups aims to subsidize some of this loss. And nursing home advocacy groups are among those urging Congress to pass the Preserving Patient Access to Long-Term Care Pharmacies Act.

The solution the bill proposes is a $30 supplemental supply fee for drugs dispensed by long-term care pharmacies under Medicare price negotiations. This fee, modeled after a Medicare Part B provision, would help keep pharmacies operational, its supporters argue.

Warning of a looming crisis that could impact millions of older adults, leading long-term care organizations — including the American Health Care Association and Center for Assisted Living (AHCA/NCAL), LeadingAge, Argentum, and the Senior Care Pharmacy Coalition (SCPC) – say that swift passage of the bill before this year’s end would ensure that residents in nursing homes and other long-term care facilities could continue to have access to essential, life-saving medications.

“[We] have been hearing on a frequent basis the serious challenges that implementation of new drug prices in January 2026 will cause for our long-term care pharmacies,” the organizations said in a joint letter to the Secretary of Health and Human Services (HHS), Robert F. Kennedy Jr., in early September. 

Under the Inflation Reduction Act (IRA), starting January 1, 2026, Medicare Part D will enforce negotiated lower “maximum fair prices” for 10 selected single‐source brand name drugs – those without generics or biosimilars – that currently have high spending, the HHS has said.

This price adjustment means that LTC pharmacies will see lower reimbursement amounts for many high‑cost drugs in the negotiated set. If reimbursement doesn’t include adequate margin or service and dispensing cost compensation, this may squeeze profitability, sector leaders argue.

“These pharmacies primarily serve Medicare Part D beneficiaries and depend on brand-name drug reimbursement to offset losses on generics – which make up the vast majority of what they dispense – due to the way [pharmacy benefits managers] structure payments,” the letter by long-term care sector advocates states. “The unexpected and unintended consequence of the recent Part D changes to brand-drug reimbursement poses a real threat to both beneficiaries and the facilities in which they reside.”

Over five million Medicare beneficiaries depend on long-term care, with one in four living in facilities that rely on LTC pharmacies for round-the-clock, specialized medication services, the advocacy groups stated.

Pharmacy lobby groups also stress that LTC pharmacies provide irreplaceable services such as 24/7 medication access, custom packaging, consultant pharmacist oversight, and quality controls. 

“Older adults living in nursing homes, assisted living, and other LTC communities often manage multiple chronic conditions and rely on an average of 13 prescription drugs per day,” said Katie Smith Sloan, President and CEO of Leading Age. “LTC pharmacies make it possible to deliver safe, high-quality and compassionate care. Protecting their stability is crucial to meeting the needs of our aging population, and we’re proud to stand behind this bill.”

Long-term care pharmacies are facing financial challenges. Omnicare, for example, entered into Chapter 11 bankruptcy proceedings Monday, and is considering various paths forward, including a standalone restructuring or a sale.

Skilled Nursing News reached out to Omnicare for comment, but the company hadn’t responded by the time of publication.

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