Challenges of the Inflation Reduction Act for long-term care pharmacy: Examining impact and policy solutions

The Inflation Reduction Act of 2022 contains several health care provisions aimed at reducing costs for Medicare beneficiaries. Although these goals are critical, the legislation may have unintentional adverse impacts on long-term care (LTC) pharmacies. This article examines how specific provisions of The Inflation Reduction Act of 2022 may destabilize the LTC pharmacy sector, creating barriers to access for LTC residents.We analyze the financial implications of the Medicare Drug Price Negotiation Program, illustrating how the shift to maximum fair price reimbursement combined with inadequate dispensing fees could result in an estimated revenue decline of more than 85% for drugs selected within the program. We also outline how new payment flows for the maximum fair price involving the Medicare Transaction Facilitator will likely extend reimbursement timelines, creating liquidity challenges for pharmacies operating on thin margins.Beyond finances, we discuss operational conflicts with the Medicare Prescription Payment Plan. Specifically, we argue that alerting requirements are incompatible with LTC workflows and pose unnecessary administrative burden on pharmacies. To address these vulnerabilities, we propose near-term legislative and regulatory remedies, including appropriating funds to ensure timely manufacturing payments and codifying the standard default refund amount to protect acquisition discounts. Finally, we recommend structural reforms that shift reimbursement away from volume-based models to value-based care. By aligning payment with patient outcomes, policymakers can ensure the financial sustainability of LTC pharmacies and the continued delivery of highly effective pharmaceutical care to the nation's aging population.