Pharmacies To Face Low Cash Flow For MFP Drugs Until Fixes Emerge

DATE: February 25, 2026

By Gabrielle Wanneh | Inside Health Policy

A bill introduced last year aiming to ensure long-term care (LTC) pharmacies can continue to supply and dispense Medicare Part D drugs despite lower prices resulting from the price negotiation program will need to be tweaked to ensure the intended relief is retroactive, according to Alan Rosenbloom, executive director of the Senior Care Pharmacy Coalition (SCPC).

Stakeholders are waiting to see whether Congress will update and pass the legislation to mitigate the negative financial impact pharmacies have been anticipating would result from drug price negotiation. CMS also has yet to address its current plan for reimbursing pharmacies for drugs with effective maximum fair prices (MFP), which has created a strain on cash flow, according to multiple pharmacy groups.

House lawmakers introduced the bipartisan Preserving Patient Access to Long-Term Care Pharmacies Act last year to mitigate the unintended consequences of drug price negotiations on reimbursement specifically for LTC pharmacies. The bill would set up a $30 supply fee for plan year 2026 and a slightly higher fee amount for plan year 2027 to ensure there’s continued access to the government-mandated LTC pharmacy services once the MFP for certain drugs go into effect. Companion legislation was introduced in the Senate in November. The bill was sent to the Congressional Budget Office for scoring.

But the bill did not pass out of Congress before the end of last year, and now that the new prices for the first set of MFP drugs are effective, the bill must be updated before moving forward.

“It’s unclear exactly what the right process would be, but what you would have to do is just modify the language,” Rosenbloom told Inside Health Policy. “You have to amend it to recognize the retroactivity to Jan. 1. That’s really the only change that we would want to make, just to be clear that we’re covering the period that really needs to be covered.”

The House bill has amassed 38 co-sponsors since its introduction, but the Senate companion bill has yet to garner more traction. Rosenbloom is hopeful both bills will see more momentum from lawmakers through 2026, as critical mass will be key to passing the legislation.

“We are actively in the year, so we should start to see the impact. It’s not going to be immediate, but as the first quarter turns into the second quarter, I do know that pharmacies have already laid off staff in anticipation of this,” Rosenbloom said. “That probably has not yet translated into cutbacks on certain services, although it will, or the potential closures that we think might occur. So, our problem is still there. We’re still trying to deal with it with the government one way or the other.”

While the legislation is a potential temporary fix, Rosenbloom says implementation of the drug price negotiation program is also still disruptive to the reimbursement pharmacies will receive for purchasing and dispensing MFP drugs now that the newer, lower prices are effective.

Previously, pharmacies would buy a brand medication at its wholesale acquisition cost and the Part D plan or pharmacy benefit manager would reimburse a higher amount — consisting of the ingredient cost and a dispensing fee, which leaves a margin to help cover pharmacy overhead.

According to SCPC, Part D plans only reimburse a fraction of the true dispensing costs for an LTC pharmacy and often prefer instead to set reimbursement for ingredient costs, especially for brand medications, that will force a pharmacy to make up dispense cost losses using the margin on ingredient costs — the difference between what the pharmacy is reimbursed by a plan or PBM and what it cost to acquire the drug.

Since Jan. 1, Part D plans and PBMs have reimbursed pharmacies at or below the lower negotiated price up front for MFP drugs. Drug companies have 14 days to make separate refund payments to pharmacies to make up the difference between the MFP and the pharmacy’s acquisition cost.

The current overall timeline for getting these refunds to pharmacies is also expected to delay cash flow. Before a drug company can refund a pharmacy, a Part D plan or PBM must approve the claim for the patient and then remit the negotiated payment to the pharmacy within 14 days of approving the claim.

CMS must then be notified of the claim’s approval and relay that information to the Medicare Transaction Facilitator (MTF) and to the drug manufacturer, and it’s once the company receives that notification that a refund payment must be made to the pharmacy within 14 days.

Rosenbloom also notes this problem is likely to vary from manufacturer to manufacturer since they are tasked with developing their own plans.

“I don’t think that there was adequate thought given to how the negotiated prices would impact the supply chain, and in particular the impact on pharmacies and the ability of pharmacies to continue in operation,” Rosenbloom told IHP.

The new negotiated prices for the first 10 Part D drugs selected to undergo price negotiations in Medicare went into effect Jan. 1. Since the passage of the Inflation Reduction Act in 2022, pharmacies had been warning policymakers that because the law lacked clear requirements to ensure Part D plans and pharmacy benefit managers fairly reimburse pharmacies for MFP drugs, pharmacy businesses would struggle to sustain themselves.

A January 2025 survey conducted by the National Community Pharmacists Association found that 93% of independent pharmacists surveyed were debating whether to not stock one or more of the 10 Part D drugs. About 60% of the group’s members said they are still considering whether to pull out from supplying the selected drugs while roughly 33% had already decided they will not sell them.

SCPC found that without a fix to Inflation Reduction Act’s current provisions for the Medicare drug price negotiation program, 60% of its members will likely be forced to close pharmacies in 2026, 90% will lay off staff and 80% will have to reduce services and increase charges to facilities and residents, which could lead to in higher hospital utilization and admissions to nursing homes that will further raise the cost of care.

A separate internal analysis conducted by SCPC last year also found that if hospital utilization were to increase by just 1% per year due to LTC pharmacy closures and service reductions while the rate of medical inflation is at 2.5% per year, Medicare spending would increase $1.8 billion over 10 years. This figure jumps up to $4.8 billion over 10 years If the utilization rate increases to 2.5% and medical inflation is at 4% per year.

The SCPC analysis found the cost of passing the supply fee bill to keep LTC pharmacies in business and capable of providing the MFP drugs would be $825 million over 10 years as opposed to the billions of dollars it will cost Medicare if the fix isn’t implemented.

“I can tell you that as the IRA was being developed, there was not a whole lot of information sharing that allowed for input from long term care pharmacies, because if there were, we certainly would have identified these problems, and there may have been ways to deal with this part of the legislation,” Rosenbloom said.

Read the full article on Inside Health Policy here.