Experts fear damage to long-term care pharmacies as CMS touts newly negotiated drug prices

DATE: August 16, 2024

By Jessica R. Towhey
McKnight’s Long Term Care News

Even as the federal government on Thursday touted the billions of dollars in savings seniors can expect to see from newly negotiated, lower drug costs, pharmacies that supply long-term care facilities are warning of dire consequences.

The Centers for Medicare & Medicaid Services announced Thursday morning that it had reached an agreement with drug makers to lower the list prices Medicare would pay for 10 of the most expensive drugs that are frequently prescribed to seniors by 38% to 79%. 

The drugs are: Eliquis; Jardiance; Xarelto; Januvia; Farxiga; Entresto; Enbrel; Imbruvica; Stelara; and Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, and NovoLog PenFill.

The new prices will go into effect Jan. 1, 2026.

Congressional budget estimators predicted about $100 billion savings over 10 years from drug negotiations, and a $3.7 billion savings in the first year alone, said US Department of Health and Human Services (HHS) Secretary Xavier Becerra in a press release. 

“Today we’re announcing that in our first year of negotiations we are saving Medicare an estimated $6 billion and Americans who pay out of pocket will be saving another $1.5 billion moving forward,” Becerra said. “Empowering Medicare to negotiate prices not only strengthens the program for generations to come, but also puts a check on skyrocketing drug prices.” 

Patients happy, providers wary

The announcement was cheered by consumer advocates such as AARP.

“AARP members from across the political spectrum overwhelmingly called lowering prescription drug costs a top concern — and this first round of Medicare-negotiated prices will bring financial relief to millions of older Americans” AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond said in a statement.

Top advocates for long-term care pharmacies, however, cautioned that, while they support lowering costs for seniors, the steep discounts will put even more pressure on these companies, which are already struggling to remain profitable. 

“Our financial impact studies predict these cuts will make it difficult for many LTC pharmacies to remain in business and serve the unique needs of their patients,” Alan Rosenbloom, president and CEO of the Senior Care Pharmacy Coalition, said in a press statement. “[T]he lower prices will become effective against the backdrop of a perverse Medicare Part D reimbursement model that is driven by the increasingly abusive practices of pharmacy benefit managers.”

Long-term care pharmacies are reimbursed approximately 25% of the costs required to provide legally required services by pharmacy benefit managers (PBMs). Rosenbloom said that payment structure leaves the pharmacies reliant on the revenues from high-cost drugs to stay in business. 

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