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 stated at the start of the year. “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.