Democrats in Washington have spent the last two years celebrating the Inflation Reduction Act’s drug-pricing provisions. And, yes, lower prices and a $2,000 out-of-pocket cap make for good headlines, but beneath that victory lap sits a part of the health-care system almost no one thinks about: the pharmacies that serve nursing-home residents. Their stability determines whether millions of elderly Americans receive the medications they rely on every day.
Those pharmacies are the weak point in the IRA rollout, and the pressure on them is building.
Long-term-care (LTC) pharmacies aren’t retail storefronts. They don’t rely on walk-in traffic, and they don’t have the product mix that helps chains absorb financial shocks. They package medications in unit doses, run emergency deliveries, support nursing stations with medication carts, and provide around-the-clock pharmacist access for residents with multiple chronic conditions. Federal rules require nursing homes to maintain these services, and LTC pharmacies are the ones equipped to meet those expectations.
Their business model only works when reimbursement reflects the actual cost of those services.
What Changes Under the IRA
Beginning in 2026, Medicare will apply the first round of negotiated “maximum fair prices” under the IRA. CMS has already published the negotiated prices and affected drugs, and more will be added in 2027, as CMS outlines in its program guidance.
Lower prices benefit beneficiaries. They also strip away the margin LTC pharmacies use to fund the services nursing homes depend on. Retail chains can weather reduced margins. LTC pharmacies do not have that cushion. Their operating costs remain the same whether a drug price is high or low. A financial analysis from ATI Advisory, based on data from nearly 2,500 LTC pharmacies, projects about a 35 percent decline in operating margins in the first two years of IRA implementation.
And now, the operators themselves are sounding the alarm.
There's a national survey from the Senior Care Pharmacy Coalition (SCPC) found that 60 percent expect closures, 90 percent expect layoffs, and 80 percent expect service cuts or higher charges. These numbers appear in their impact analysis and legislative update.
If closures begin at that scale, nursing homes will struggle to comply with federal requirements. Some will face medication delays or service disruptions, and residents with complex medical needs will feel the impact immediately.
When Medication Access Falters, Everything Gets More Expensive
LTC pharmacies help keep residents stable. They prevent medication errors, maintain precise schedules, and provide the structure that keeps frail patients from landing in the hospital. When that system weakens, emergency-room visits and hospitalizations rise.
SCPC’s modeling estimates that even a 1 percent annual increase in hospital and ER use could add $1.9 billion to Medicare spending over ten years. A 2.5 percent increase raises that projection to $4.8 billion. The same analysis estimates that stabilizing LTC pharmacies with a temporary payment adjustment would cost roughly $826 million over the same period. Those figures appear in the coalition’s technical paper.
Advocacy aside, the basic fiscal logic is hard to dispute: the downstream costs of inaction are higher than the cost of preventing disruption.
Two Routes to a Fix
Congress has a bipartisan bill, the Preserving Patient Access to Long-Term Care Pharmacies Act, introduced as H.R. 5031. It would create a temporary supply fee for LTC pharmacies dispensing IRA-negotiated drugs. The bill details and summary are on Congress.gov, and Rep. Van Duyne’s office outlines the legislative intent in a public release.
Another route sits inside the Department of Health and Human Services. CMS has the authority to create demonstration projects under Section 402 of the Social Security Amendments. The agency has used that authority for the Part D Premium Stabilization Demonstration and for earlier premium-stabilization work. A similar model could support LTC pharmacies during the early years of IRA implementation.
Either option would keep the system from buckling in 2026. What’s missing is a public decision. LTC pharmacies need clarity soon, not months after the new prices take effect.
A Preventable Failure
Health-care policy often takes years to correct course, even when the path forward is obvious. LTC pharmacies are warning that their economics no longer work. Nursing homes cannot operate without them. Residents cannot tolerate disruptions in access to critical medications.
Congress can act. CMS can act. The administration can act.
If nothing changes, the fallout will begin inside nursing homes and emergency rooms, long before it shows up in budget reports. Families will face problems they had no reason to anticipate.
Washington still has time to prevent that outcome. The window is narrowing.
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