Most independent pharmacies may not carry negotiated Medicare Part D drugs

Photo: Jeff Lagasse/Healthcare Finance News

A new national survey shows more than 90% of independent pharmacists may not sell drugs for which the Medicare Part D program is trying to negotiate lower prices. If they don't, the administration's effort to reduce prescription drug prices is bound to fail, according to the National Community Pharmacists Association.

The administration announced in August a list of 10 drugs for which the Medicare Part D program will seek to negotiate lower prices. They include drugs for diabetes, blood clots, heart disease and other conditions. 

The drugs subject to the new pricing include Januvia, Farxiga, Enbrel, Jardiance, Setalara, Xarelto, Eliquis, Entresto, Imbruvica, and the Fiasp, or NovoLog FlexPen. The new prices are set to go into effect for people with Medicare Part D prescription drug coverage beginning January 1, 2026.

According to the survey, 51% of respondents say they are strongly considering not stocking the drugs because of the potential underwater reimbursements from pharmacy benefit managers. (Underwater reimbursement is when a pharmacy is paid less than the cost of acquiring a drug.) Another 40% of respondents say they are somewhat considering not stocking the medications.

WHAT'S THE IMPACT?

The Medicare Drug Price Negotiation Program starts in January of 2026. NCPA estimated pharmacies that dispense drugs in the program will have to tie up about $27,000 of their own money every month to stock the drugs, and then wait a month or more for manufacturer refunds to "make the pharmacy whole."

For many pharmacies, the resulting cash flow crunch will be too much for them to absorb in an already difficult payment environment, said NCPA, which added that guidance from the Centers for Medicare and Medicaid Services offered no assurances that the payments to pharmacies from PBM middlemen would cover the pharmacy's costs to acquire and dispense the medicine.

Serving Medicare Part D patients accounts for roughly 35% of the average pharmacy's business, but low reimbursements are forcing many independent pharmacists to reconsider participating in the program. In a February survey, 93% said they were considering dropping out this year. In this most recent survey, 73% said they have not yet finalized their contracts for 2025, and they don't know which plans they'll be in.

According to NCPA, low reimbursements are limiting patient access to other drugs as well. Prescriptions for the popular and expensive GLP-1 drugs for diabetes and weight loss often result in insurance company payments that are less than what the pharmacy paid for the drug, it said. 

Ninety-five percent of pharmacists who dispense them say they lose money on the drugs, according to the survey. Fourteen percent no longer stock them at all, and another 59% are considering not dispensing them.

NCPA referenced a congressional hearing in July at which lawmakers from both parties questioned CEOs of the three largest PBMs. At that hearing, the head of Express Scripts testified that his company is happy to negotiate with pharmacists for fairer reimbursements. But, according to the NCPA survey, 98% of pharmacists said they weren't able to negotiate with Express Scripts before the hearing, and 96% say they haven't been successful at negotiating with Express Scripts since.

THE LARGER TREND

President Biden signed the Inflation Reduction Act into law in 2022. It gave Medicare the ability to directly negotiate the prices of certain high expenditure, single-source drugs without generic or biosimilar competition. CMS selected 10 drugs covered under Medicare Part D for the first cycle of negotiations for initial price applicability in the year 2026, and engaged in voluntary negotiations with the drug companies for the selected drugs.

CMS has said that if the new prices for the 10 drugs selected for negotiations had been in effect last year, Medicare would have saved an estimated $6 billion, or approximately 22%, across the 10 selected drugs. These negotiated prices range from 38% to 79% discounts off list prices. About nine million people with Medicare use at least one of the 10 drugs selected for negotiation.

People with Medicare prescription-drug coverage are expected to see aggregated estimated savings of $1.5 billion in their personal out-of-pocket costs in 2026, according to CMS' fact sheet.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.