LTC pharmacies said this would happen. New data says they were right.

DATE: July 20, 2026

By Donna Shryer // Published July 18, 2026 in McKnight’s Long-Term Care News

Long-term care pharmacies predicted a steep reimbursement hit from the Inflation Reduction Act’s Medicare drug pricing changes. Now they say they have the data confirming it.

A new analysis of member financial data shows reimbursement for drugs subject to the law’s negotiated prices has fallen by more than 50% since 2026 prices took effect, with added dispensing fees covering only a fraction of the gap. 

The findings land as a bipartisan fix has sat stalled in Congress for months, with pharmacies warning that locations could close without it.

Many payers responded by increasing dispensing fees on the affected drugs by an average of $7.61 per prescription. But a separate, earlier ATI Advisory analysis estimated that LTC pharmacies would need an additional $20.43 to $31.67 per prescription to offset the losses — meaning the higher fees cover only about 24% to 37% of the estimated shortfall, leaving pharmacies to absorb roughly $13 to $24 per claim.

Long-term care pharmacy services have long been financed differently than those at retail pharmacies. 

Unlike retail pharmacies, of course, long-term care pharmacies provide medication management, consultant pharmacist services, compliance packaging, emergency deliveries and round-the-clock clinical support for residents of nursing homes and assisted living communities — services whose costs, industry groups say, aren’t fully covered through a separate, dedicated payment stream.

To help cover those costs, the Senior Care Pharmacy Coalition says stronger margins on certain frequently prescribed brand-name drugs historically offset losses on other prescriptions and subsidized the labor-intensive services LTC pharmacies provide. 

As McKnight’s Long-Term Care News has reported, Medicare’s negotiated prices substantially reduced reimbursement on those drugs without reducing pharmacies’ staffing, delivery and clinical-care costs — removing much of the revenue that had helped hold the model together.

SCPC has framed the issue not as opposition to lower Medicare drug prices, but as a warning that the new prices took effect without a permanent payment mechanism for the specialized pharmacy services LTC residents still require.

An ATI Advisory analysis released last year projected that the first round of Medicare-negotiated prices would reduce LTC pharmacies’ Part D revenue by 57%. The new member data, collected after the prices took effect, shows reimbursement on those drugs falling by more than 50%. Although revenue and reimbursement are not identical measures, both findings point to a steep post-implementation decline.

The financial findings also follow an earlier SCPC survey in which 60% of LTC pharmacies predicted they would close locations and 85% expected to limit services after the pricing changes took effect.

SCPC is urging Congress to pass the Preserving Patient Access to Long-Term Care Pharmacies Act, which would require Medicare Part D plans to pay LTC pharmacies a $30 supply fee for each affected prescription in 2026, with an inflation-adjusted fee in 2027. 

It also would direct the Government Accountability Office to study the sector’s financial sustainability and recommend a permanent payment model. The House version, HR 5031, remains before committee, as does the Senate companion, S 3159. Neither bill has advanced beyond introduction.

For nursing homes and assisted living communities, the potential consequences extend beyond whether a pharmacy can fill a prescription. Continued losses could threaten medication delivery, compliance packaging and clinical support woven into daily resident care. SCPC warns that losing access to those services would be particularly difficult for rural areas to absorb.