By Lee Pruitt
Takeaways
- Long-term care (LTC) pharmacies — not retail drugstores —
are essential to medication safety in nursing homes and other long-term
care facilities.
- Medicare drug price changes took effect January 1, 2026,
cutting key LTC pharmacy reimbursements. Without a fix, pharmacies may
cut staff and services or close, raising risks for residents.
- A bipartisan bill was introduced in 2025, but as of spring 2026 it’s still stalled.
When Congress passed the
Inflation Reduction Act in 2022, part of the goal was to lower
prescription drug costs for Medicare patients. For millions of seniors
in nursing homes and assisted living facilities, though, a
little-noticed side effect of that law is starting to hinder their
access to those drugs.
The Pharmacies You Haven’t Heard Of
Long-term care (LTC)
pharmacies are specialized pharmacies that have no walk-in customers or
front-of-store merchandise. Their sole purpose is to serve the roughly 2
million Americans who live in nursing homes, skilled nursing
facilities, assisted living communities, and hospices.
They
do far more than fill prescriptions. The typical nursing home resident
takes an average of 13 medications. Organizing and administering them
safely requires support that goes well beyond what a retail drugstore
provides.
LTC pharmacies specially
package medications to prevent errors, conduct monthly reviews of each
resident’s full medication regimen, and maintain emergency kits and
after-hours coverage. They also coordinate medication management when
residents transfer in from hospitals — a critical step, since errors
during those transitions are a common cause of avoidable hospital
readmissions.
These
critical services come at a cost. Dispensing medications to LTC
residents is costlier than dispensing to retail customers, due to the
specialized packaging, regulatory requirements, frequent deliveries, and
mandatory 24/7 staffing. Unlike retail pharmacies, which can offset
thin prescription margins with sales of snacks, greeting cards, and
cosmetics, LTC pharmacies have no such cushion. Their revenue largely
comes from Medicare Part D prescription reimbursements — making them
uniquely vulnerable to changes in how Medicare pays for drugs.
Why LTC Pharmacies Are Essential
The people that LTC
pharmacies serve are often among the most medically complex patients in
the health care system. Nursing home residents commonly live with
combinations of dementia, heart disease, diabetes, chronic respiratory
illness, and other serious conditions. Many are physically unable to
travel to a pharmacy, unable to manage their own medications, or both.
For these individuals, an LTC pharmacy is essential to their daily care.
LTC
pharmacies also play an important role for people with disabilities who
live in long-term care settings but are not elderly. These residents
may have complex medication regimens stemming from physical or
neurological conditions and rely on the same specialized services.
The
safety implications are substantial. Medication errors are among the
most common and serious adverse events in long-term care settings.
Having a dedicated pharmacist review each resident’s monthly medication
list and be available around the clock for consultations provides an
important safeguard against potentially dangerous mistakes. When LTC
pharmacies function well, they help keep people healthier, prevent
unnecessary hospitalizations, and improve quality of life for vulnerable
patients.
LTC
pharmacies also provide support to the nurses and aides working in these
facilities. Facility staff rely on LTC pharmacies to supply medication
carts, maintain emergency kits, manage complex delivery schedules, and
handle the administrative burden of prescription management. Without LTC
pharmacies, the workload on already-stretched staff would increase
substantially.
The Inflation Reduction Act and an Unintended Consequence
The Inflation Reduction Act
gave Medicare the authority, for the first time in the program’s
history, to negotiate prices directly with pharmaceutical manufacturers
for certain high-cost drugs. The resulting “maximum fair prices” took
effect on January 1, 2026, and are estimated to reduce costs for
selected drugs by roughly 38 percent to 79 percent. For Medicare patients who take those medications, that’s a genuine benefit.
For
LTC pharmacies, however, it is a financial gut punch. The problem lies
in how their business model works. LTC pharmacies have long relied on
the margins from brand-name drug reimbursements to cross-subsidize the
losses they routinely take on generic drugs, where reimbursement rates
are notoriously thin.
Eight
of the 10 drugs selected for the first round of Medicare price
negotiations are brand-name medications heavily prescribed to nursing
home residents. When the reimbursement rates for those drugs dropped
sharply on January 1, 2026, LTC pharmacies lost part of the financial
cushion that kept them viable — with no offsetting compensation for the
specialized, federally mandated services they provide on top of
dispensing the drugs.
The Senior Care Pharmacy Coalition
(SCPC), the leading advocacy group for LTC pharmacies, estimated that
the financial hit would be unsustainable. Without a way to make up for
the lost revenue, 60 percent of its member pharmacies would be forced to
close locations, 90 percent would lay off staff, and 80 percent would
have to reduce services and increase fees.
A
separate analysis found that pharmacy closures could ultimately cost
taxpayers up to $4.8 billion in increased health care costs over the
next decade, as nursing home residents lose access to the medication
management services that help keep them out of the hospital.
The Bill That Wasn’t Passed in Time
In August 2025, a bipartisan group of House members introduced the Preserving Patient Access to Long-Term Care Pharmacies Act.
Lead sponsors — Reps. Beth Van Duyne (R-TX) and Brad Schneider (D-IL) —
proposed a targeted fix: a temporary $30 supply fee paid to LTC
pharmacies for each prescription dispensed under the new Medicare
negotiated prices in 2026, with a slightly higher inflation-adjusted fee
in 2027. The bill would also require a federal study on the long-term
sustainability of LTC pharmacy reimbursement under Medicare. A companion bill was introduced in the Senate by Sen. James Lankford (R-OK) in November 2025.
Major
provider and pharmacy groups endorsed the legislation and urged the
U.S. Department of Health and Human Services to act. These efforts have
not yet yielded a solution.
The Crisis Is Here
January 2026 arrived
without a fix in place, and the consequences have unfolded as predicted.
“We are witnessing the collapse of America’s long-term care pharmacy
infrastructure in real time,” the SCPC has stated.
“These aren’t projections — these are decisions LTC pharmacies are
making right now because small and mid-size LTC pharmacies cannot
survive under the current reimbursement structure.”
Both
the House and Senate versions of the bill remain in committee as of
spring 2026, with no floor vote scheduled. Advocates are still pushing
for passage. However, the bill would now need amending to make any
relief retroactive to January 1. Staff layoffs have already begun at
pharmacies nationwide, and service reductions are expected to follow.
The
painful irony is that the people most harmed by this situation —
long-term care facility residents who depend on LTC pharmacies for safe,
reliable access to the medications that keep them healthy — are among
the Medicare patients who were supposed to be helped by the Inflation
Reduction Act.
Lowering
drug prices is only part of the equation. Getting that drug safely into
the hands of someone who can’t drive to a pharmacy, can’t manage their
own medications, and can’t wait until morning is a challenge that
requires its own infrastructure. Congress created the rules that require
that infrastructure to exist. So far, it has declined to ensure that it
can survive.
Created date: 05/26/2026
Full Article & Source:
Long-Term Care Pharmacy Crisis Hits Nursing Homes
