IRA Drug Supply Fee Bill For LTC Pharmacies Could Prevent $4.8B Cost To Taxpayers

DATE: November 18, 2025

Long-term care (LTC) pharmacies are stepping up their calls for Congress to pass the bipartisan, bicameral Preserving Patient Access to Long-Term Care Pharmacies Act with the release of a new analysis Monday (Nov. 17) by the Senior Care Pharmacy Coalition (SCPC) that found failure to ensure LTC pharmacies are not negatively impacted when new maximum fair prices for select Medicare Part D drugs become effective next year may cost taxpayers up to $4.8 billion in increased health care costs over the next decade.

SCPC says its members report that if lawmakers don’t pass the bill this year — which would establish a targeted, time-limited $30 supply fee to long-term care pharmacies for every Part D drug selected for price negotiations in 2026 and a slightly higher fee in 2027 — 60% of operators will be forced to close pharmacies next year, 90% will lay off staff, and 80% will have to reduce services and increase charges to facilities and residents in 2026. This may result in higher hospital utilization and admissions to nursing homes that will further drive up the cost of care, the analysis says.

According to an internal SCPC analysis of Medicare data, if such utilization increased by just 1% per year due to LTC pharmacy closures and service reductions, and if medical inflation is only 2.5% per year, Medicare spending will increase $1.8 billion over 10 years. If the utilization rate increased to 2.5% and the medical inflation rate was 4% per year, this would increase Medicare spending by $4.8 billion over 10 years. Meanwhile, the cost of passing the supply fee bill to avert mass loss of LTC pharmacies is $825 million over 10 years, the analysis found.

Sens. James Lankford (R-OK) and Markwayne Mullin (R-OK) introduced companion legislation this month to a House version of the bill that was introduced in August.

“Without this LTC pharmacy fix, Medicare Part D price negotiations taking effect January 1, 2026, will devastate many LTC pharmacies — and it will only worsen as more medications are negotiated in 2027,” SCPC President and CEO Alan Rosenbloom said in a statement while applauding the Senate bill.

SCPC first started contacting key congressional committees earlier this year with the initial proposal that became the House and Senate bills. The proposed legislation was modeled after a fix Congress implemented after passing the Medicare Modernization Act, which established the Part D program. The 2003 law incorporated changes to the Part B payment model that led to financial strain for doctors dispensing certain drugs, so a supply fee was created to solve the issue.

CMS contacted Part D plan sponsors in August to encourage them to ensure pharmacies receive adequate payment for drugs with new negotiated prices when they go in effect in January, but the advisory does not require plans to comply with the agency’s recommended actions.

Now that the longest government shutdown in history has ended, Rosenbloom told Inside Health Policy it’s too soon to tell what the chances are of the legislation being included in a year-end package, and that even if the bill were enacted this month, there wouldn’t be time for CMS to effectively implement the supply fee policy by Jan. 1. But even if it were to mean CMS would have to apply the supply fee retroactively, Rosenbloom says the sooner policymakers enact the fix, the better for LTC pharmacies as well as the government.

The bill has been sent to the Congressional Budget Office for scoring. 

Read the full article on Inside Health Policy here