A new viewpoint article published in the Journal of Managed Care & Specialty Pharmacy examines how key provisions of the Inflation Reduction Act (IRA) of 2022 may unintentionally destabilize long‑term care (LTC) pharmacies—providers that serve many of the nation’s most vulnerable older adults.
The analysis, authored by PhD Candidate Shiven Bhardwaj and Associate Professor Douglas Barthold of the University of Washington School of Pharmacy’s CHOICE Institute, Weston Schmutz (Schmutz Health Solutions), and Jonathan H. Watanabe (University of California, San Francisco) evaluates how the law’s drug‑pricing reforms could create significant financial and operational challenges for pharmacies operating in LTC settings.
One of the paper’s central findings points to the projected impact of the IRA’s Maximum Fair Price (MFP) reimbursement structure. For drugs selected under the Drug Price Negotiation Program, LTC pharmacies could face an estimated 85% decline in revenue, a shift driven by reduced payments paired with already inadequate dispensing fees.
The researchers also highlight cash‑flow concerns arising from new Medicare Part D payment flows. Reimbursement timelines are expected to lengthen from roughly 14 days to 22–24 days, potentially creating liquidity shortfalls for pharmacies operating on narrow margins.
The article further notes that requirements tied to the IRA’s Monthly Prescription Payment Plan (M3P) are often incompatible with the retroactive billing processes common in long‑term care. These conflicts could increase administrative burden and introduce friction in medication access for residents.
Beyond identifying risks, the authors outline several policy recommendations designed to stabilize the LTC pharmacy sector. These include codifying refund amounts to maintain acquisition discounts, aligning reimbursement with value‑based care models, and implementing targeted adjustments to ensure continuity of care. The work was supported in part by the Plein Center for Aging.
The researchers emphasize that without policy responses, the future of LTC pharmacies and their essential functions may be jeopardized.
The full viewpoint article is available through JMCP at this link.