Medicare drug price negotiations impact non-chain pharmacies

A new survey from the National Community Pharmacists Association revealed that Medicare drug price negotiations intended to expand access to necessary drugs might not provide as many benefits as expected if pharmacies aren't ensured fair and timely reimbursement.

The survey, conducted between Sept. 24 and Oct. 11, 2024, was sent to 4,135 independent pharmacy owners and received 467 responses. Among the many questions in the survey, several focused on the Medicare Drug Price Negotiations program and contracts for participating in the 2025 Medicare Part D pharmacy network.

According to the survey results, most independent pharmacy owners have not finalized their 2025 Medicare Part D contracts, with only 27% of respondents saying that they have finalized their contracts and know which plans they will participate in.

The Medicare Drug Price Negotiations program was triggered when President Biden signed the Inflation Reduction Act into law, allowing CMS to negotiate drug prices for Medicare Parts B and D.

The press release from the National Community Pharmacists Association (NCPA) states that under the Medicare Drug Price Negotiations program, pharmacies will be waiting over 30 days for manufacturer refunds, leaving many pharmacies with $27,000 in expenses to stock the drugs that will not be refunded for at least one month.

Although this might be a challenge for more extensive pharmacy networks and retail pharmacy chains, the difficulties pose an even more significant financial hurdle for smaller independent pharmacies that lack the cash flow for this system.

As a result, many independent pharmacies are considering not stocking these drugs. For example, 51% of respondents in this survey stated that they are strongly considering not stocking the ten drugs in the Medicare Drug Price Negotiations program, which includes Januvia, Fiasp, Farxiga, Enbrel, Jardiance, Stelara, Xarelto, Eliquis, Entresto and Imbruvica. An additional 40% stated that they are somewhat considering not stocking these drugs, while only 9% confirmed that they would continue to stock the medications.

The NCPA maintains that strategies to enforce fair and timely reimbursement to pharmacies are necessary for patients to have access to the medication.

"Lower prices won't mean much to people who can't find the drugs," said NCPA CEO B. Douglas Hoey, pharmacist, MBA, in the press release. "Unfortunately, the new CMS guidance fails to ensure fair reimbursement for pharmacies that dispense the drugs. It also fails to ensure timely reimbursement. Pharmacists are health care providers and pharmacies are also businesses that can't afford to lose money on prescriptions they dispense. The president's entire program is in jeopardy if that isn't addressed."

The NCPA states that 35% of pharmacy business is attributed to Medicare Part D patients; however, reimbursement challenges force many pharmacists to forgo participating in the program or consider backing out.

Beyond the challenges associated with these negotiated prices, reimbursement negotiations with pharmacy benefit managers (PBMs) drive independent pharmacies away from participating in the Medicare Part D program.

"The PBMs offer take-it-or-leave contracts. They don't negotiate because of their dominant market share, which is one reason why the FTC is investigating their business practices," added Hoey. "Pharmacists who want to keep their patients are often forced to dispense prescriptions for less than their cost to acquire the medicine. That's why there are now 10 percent fewer pharmacies for patients to choose from, and it's why many are considering dropping out of the Medicare Part D program altogether."

According to the organization, PBM reforms being considered by Congress might help address some of these challenges; however, timely action is necessary.

"If Congress doesn't get this done this year, a lot of pharmacies will drop out of the Medicare Part D program, and patients will be stranded," Hoey said. "Many others will close their doors permanently, leading to more consumers living in pharmacy deserts."

Veronica Salib has covered news related to the pharmaceutical and life sciences industry since 2022.