Latest / Pharmacy Podcast Network / LTC Pharmacy at a Crossroads: Maximum Fair Price, the IRA, and What DC Means for 2026 and Beyond

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LTC Pharmacy at a Crossroads: Maximum Fair Price, the IRA, and What DC Means for 2026 and Beyond · Pharmacy Podcast Network

• 0:06
  Speaker 1: You are listening to the Pharmacy Podcast Network.
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  Speaker 2: You're listening to Framework Focus, the podcast that explores trends, innovations,
• 0:30
  Speaker 2: and insights in the long term care pharmacy industry. Join
• 0:34
  Speaker 2: us as we connect the entire LTC ecosystem.
• 0:37
  Speaker 3: Hey, welcome back to Framework Focus. This is the podcast
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  Speaker 3: for everything long term care pharmacy by Softwriters, and it's interesting.
• 0:47
  Speaker 3: They've been a partner of the Pharmacy Podcast Network for
• 0:50
  Speaker 3: several years. It's where I started my entire pharmacy career
• 0:55
  Speaker 3: at Softwriters, many many moons ago, two thousand and four.
• 0:59
  Speaker 3: Goodness gracious, making me feel old, and I have another.
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  Speaker 3: I don't want to call you old, Day, but I
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  Speaker 3: have another veteran of pharmacy here with us today talking
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  Speaker 3: about policy and things impacting long term care pharmacy.
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  Speaker 4: It's so good to see you, Day How are you good? Good?
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  Speaker 3: Thanks for having me today. You're very welcome. Doctor day
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  Speaker 3: Lee is a farm de you're a lawyer. You have
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  Speaker 3: a deep understanding of what's happening in different sectors of pharmacy.
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  Speaker 3: Today we're concentrating on the impact of several things happening
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  Speaker 3: in these United States that is going to trickle down
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  Speaker 3: is going to impact long term care pharmacy and the
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  Speaker 3: regulatory updates for long term care pharmacy. They always seem
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  Speaker 3: like they're shifting, they're changing depending what's happening at the
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  Speaker 3: state level federal level. We understand things are changing for
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  Speaker 3: maximum fare pricing in the Afflate Inflation Reduction Act. What
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  Speaker 3: I'm going to do today for our listeners is I'd
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  Speaker 3: like it to turn it over to you. I'd like
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  Speaker 3: you to give just a brief introduction of yourself and who,
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  Speaker 3: what firm that you're with, and what you do out
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  Speaker 3: there in pharmacy, and then we're going to dig deep
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  Speaker 3: into some of these questions impacting our long term care
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  Speaker 3: pharmacy operators.
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  Speaker 4: Thank you again. My name is day Lee.
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  Speaker 5: I'm a shareholder pharmacist attorney at Ucuana NGOs Rouny. My
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  Speaker 5: office is in Jersey and New York, but I think
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  Speaker 5: we have about seventeen or eighteen offices throughout the country
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  Speaker 5: with almost five hundred attorneys and the government professionals.
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  Speaker 4: My main practice is pharmacy.
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  Speaker 5: I represent a lot of independent pharmacies, different types, whether
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  Speaker 5: it be retail, long term care, mail order or specialty,
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  Speaker 5: whether it be true mom and pop or private equity back.
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  Speaker 5: I also represent plan sponsors and employers in their dealings
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  Speaker 5: against you top three or top six pharmacy benefit managers,
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  Speaker 5: and of course I do have different clientele a side
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  Speaker 5: of those, including manufacturers and wholesalers, so I pretty much
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  Speaker 5: touch upon every single topic involving pharmacy day.
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  Speaker 4: Thanks for setting the stage for us.
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  Speaker 3: It really helps if someone's driving, if they're walking their dog,
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  Speaker 3: and they're listening in. We always like to get an
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  Speaker 3: understanding of the insights and who it's coming from, and
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  Speaker 3: what a better person to have As we talk about
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  Speaker 3: maximum fare pricing which is known as MFP, what's happening
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  Speaker 3: with the national playing field for long term care pharmacy
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  Speaker 3: in the IRA Metacare drug price negotiations? Would you give
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  Speaker 3: us just an opening in a stage set so that
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  Speaker 3: we can ask some more specific questions about what's happening
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  Speaker 3: in reimbursement.
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  Speaker 4: Sure, a lot of I mean not limited to long
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  Speaker 4: term care.
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  Speaker 5: But right now pharmacy industry is filled with a lot
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  Speaker 5: of developments, right positive developments because for the past years,
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  Speaker 5: you know, several years or even a decade, pharmacy benefit managers,
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  Speaker 5: especially the top three CVS care mark United optimax As,
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  Speaker 5: Signe Express, Kris have been really you know, unfair, unfair
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  Speaker 5: treatment toors independent pharmacies, and they actually have you know,
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  Speaker 5: in my opinion, they have double standards because as you know,
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  Speaker 5: they are vertically integrated. They have their own pharmacies and
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  Speaker 5: they have their own providers, and they look kindly upon
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  Speaker 5: their own versus you know, non affiliated or non PBM
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  Speaker 5: owned pharmacies. So there's been a lot of positive development
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  Speaker 5: because more people have been getting educated, more legislators are
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  Speaker 5: trying to make the playing field leveled and fair for
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  Speaker 5: the independent pharmacies out there. So you know, in the
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  Speaker 5: Inflation Reduction Act, maximum fare price, those are you know
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  Speaker 5: some of the items or developments that you know brought
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  Speaker 5: positive impact on the pharmacy industry. So when people hear
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  Speaker 5: Inflation Reduction Act IRA, they think sometimes they think political
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  Speaker 5: talking point, right, But what it actually did and healthcare
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  Speaker 5: is fundamentally restructure the Medicare part the economics. And I
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  Speaker 5: think there are three pieces that long term care pharmacies
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  Speaker 5: need to understand regarding the IRA. The first one is
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  Speaker 5: Medicare is now negotiating prices for a certain high fall
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  Speaker 5: strugg that is a drug price negotiation program. Second thing is,
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  Speaker 5: you know, I believe starting in twenty twenty five the
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  Speaker 5: Medicare part D as in David, their benefit design shifted
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  Speaker 5: much more, shifted into putting much more financial liability onto
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  Speaker 5: the plans in the catastrophic phase.
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  Speaker 4: And the third one is the beneficiary.
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  Speaker 5: Now have I want to say two thousand dollars annual
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  Speaker 5: out of pocket cap So sounds patient friendly and in
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  Speaker 5: many ways it is. But every time, you know, Washington
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  Speaker 5: reduces beneficiary exposure, someone else absorbs the cost. And in
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  Speaker 5: this case it's primarily part of the plans and the manufacturers.
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  Speaker 4: And when plans absorb more liability.
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  Speaker 5: They're going to respond, right, They're going to tighten the contract.
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  Speaker 5: They're going to tighten the reimbursement and possibly the utilization
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  Speaker 5: of it. And that's when the long term care pharmacies
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  Speaker 5: they may start to feel pressure. Now, moving onto the
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  Speaker 5: maximum fair price MFP, under the ira uh CMS selects
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  Speaker 5: turn high costs singles the source drug without generic competition
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  Speaker 5: and negotiats is something called maximum fare price MFF. I
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  Speaker 5: want to say that first ten ten drugs took effect
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  Speaker 5: in twenty sixteen, and the more drugs that is going
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  Speaker 5: to uh are going to roll in in these subsequent years,
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  Speaker 5: and MFP it's essentially a government set sailing price for medicare.
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  Speaker 5: Now manufacturers must offer those prices to pharmacies, you know,
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  Speaker 5: dispensing to Medicare beneficiaries.
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  Speaker 4: So MFP governs.
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  Speaker 5: The ingredient cost and it's gonna it's gonna have an impact, right,
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  Speaker 5: It's gonna have an impact on not only the dispensing pharmacies,
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  Speaker 5: but also the plans because if you think about it,
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  Speaker 5: these plans are or plan sponsors are used to getting
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  Speaker 5: rebate checks, right, and the rebate checks you know, as
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  Speaker 5: you may know, the top three PBMs or at least
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  Speaker 5: two of them, op the Marx and Express have already
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  Speaker 5: come out and said that in response to all these pressures,
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  Speaker 5: legislative pressure that they're feeling and the public outcry, that hey,
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  Speaker 5: we're gonna move away from the rebate back end rebate
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  Speaker 5: and we're going to apply on the front end.
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  Speaker 4: It's going to reduce the ingredient cost. Okay, sort of
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  Speaker 4: like MFP does. Now, how are they going to capture that?
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  Speaker 4: I don't know.
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  Speaker 5: They haven't really provided any clarification on or laid out
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  Speaker 5: grounds work or showed methology on how the back end
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  Speaker 5: rebase is going to be applied on the front end
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  Speaker 5: and how it's going to impact the total drug spending
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  Speaker 5: of the plant sponsors and the out of pocket costs
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  Speaker 5: of the patient.
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  Speaker 4: Literally, get into that, get into it.
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  Speaker 5: It was more of a I want to say, reactive
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  Speaker 5: response by the PBMs to.
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  Speaker 4: A lot of legislative pressure and a public outcry.
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  Speaker 3: Yeah, I remember. And it's been like a jigsaw puzzle
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  Speaker 3: with different things happening, not only from the state perspective.
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  Speaker 3: That then some of the data and outcomes of different
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  Speaker 3: state legislation for PBM reform then impacts other states, and
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  Speaker 3: then that rolls up to our federal We know that
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  Speaker 3: state representative Texas State Representative Beth Van Dowan and her team,
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  Speaker 3: and this is nice because it's bipartisan representatives from the
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  Speaker 3: state of Illinois, Democrats, Republicans from Georgia. Buddy Carter, shout
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  Speaker 3: out to that guy. He's just amazing. They're all working
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  Speaker 3: on h R. Five zero three one, which is the
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  Speaker 3: Preserving PATI Access to Long Term Care Pharmacies Act, and
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  Speaker 3: that of course overlays everything else that's happening with these
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  Speaker 3: other things that like I said today, it's very confusing
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  Speaker 3: to follow how it fits like a chainsaw puzzle, But
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  Speaker 3: can you kind of give some of your insights to
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  Speaker 3: how that might play into a resolution where we're not
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  Speaker 3: going to lose long term care pharmacies moving forward.
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  Speaker 5: Sure, I mean, I don't think we're going to lose
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  Speaker 5: long term care pharmacies in the future. As you may know,
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  Speaker 5: there are states that are trying to prohibit TBMs to
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  Speaker 5: own their own pharmacies, such as Arkansas, and then I
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  Speaker 5: believe very recently, it could have been as recent as
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  Speaker 5: yesterday that Tennessee actually passed the law or interested the
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  Speaker 5: bill trying to follow the Arkansas footsteps. So and plus,
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  Speaker 5: chain pharmacies are closing, right and there will be a
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  Speaker 5: lot of influx into the independent pharmacy, whether it be
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  Speaker 5: retail or long term care. Okay, and all these you know,
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  Speaker 5: legislative pressure and a lot of clients sponsors getting educated.
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  Speaker 5: That's going to bring positive impact on non PBM owned pharmacies.
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  Speaker 5: But at the same time, what we got to really
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  Speaker 5: you know, watch out for is PBMs. They're vertical integrated.
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  Speaker 5: Their parent companies are listed as you know, public companies.
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  Speaker 5: They have their stock and you know, share value, right,
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  Speaker 5: They're going to have to make up some of the
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  Speaker 5: lost revenue from somewhere else, and I feel like that's
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  Speaker 5: going to be from the non PBM owned independent pharmacies,
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  Speaker 5: whether it be retail or mailoader or even a long
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  Speaker 5: term So you know, we have to be vigilant in
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  Speaker 5: terms of pushing back on any egregious practice that are
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  Speaker 5: going to be deployed by those PBMs.
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  Speaker 4: Day what imp have we seen?
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  Speaker 3: It's now we're moving into the the end of the
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  Speaker 3: of the first quarter of twenty twenty six, soon to
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  Speaker 3: be second quarter, and the senior care pharmacies it is
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  Speaker 3: studying this stuff and we of course pay attention to
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  Speaker 3: SCPC and what they're doing. But they posted something about
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  Speaker 3: HR five zero three one and also three one five
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  Speaker 3: nine preserve patient access to long term care pharmacies, and
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  Speaker 3: they were going through some of the issues and they
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  Speaker 3: said that when the negotiated price took effect on January
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  Speaker 3: first of twenty twenty six, long term care pharmacies will
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  Speaker 3: face on They use the word unsustainable revenue loss on
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  Speaker 3: birth and name medications that are included under the Medicare
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  Speaker 3: party price negotiation program. So I and I know that
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  Speaker 3: there's lots of there's lots of hearsay, meaning there's people
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  Speaker 3: that are very intelligent that have data and they try
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  Speaker 3: to project what might happen. But what has happened in
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  Speaker 3: this first quarter of twenty twenty six in some of
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  Speaker 3: the changes that were that were made on January first
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  Speaker 3: of twenty twenty six.
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  Speaker 5: Lost revenue, the reduced reimbursement. Look pharmacies, non PBM owned pharmacies,
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  Speaker 5: you know, for them to make profit, you have to
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  Speaker 5: buy the drugs at certain price and then you know,
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  Speaker 5: sell the drugs at certain cost or price. Right, so
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  Speaker 5: they that's the delta equity and cost is already there.
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  Speaker 5: It's not going to drastically change. What drastically change does
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  Speaker 5: far are is the reimbursement rate. Reimbursement rate went down,
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  Speaker 5: so the delta is shrinking or even delta is into negatives.
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  Speaker 5: That's that's one hundred true for non TVM owned pharmacies,
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  Speaker 5: whether it be retail or long term care of pharmacies.
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  Speaker 5: And I'm I personally, I'm not a big proponent of
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  Speaker 5: government pricing negotiation, you know, and those brand drugs. You know,
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  Speaker 5: let's say the price goes on, but it's but that
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  Speaker 5: doesn't mean that the cost of buying the drugs are
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  Speaker 5: going down from the pharmacies, from from pharmacies perspective. So
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  Speaker 5: so the delta is shrinking is into the negatives. And
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  Speaker 5: you know, and plus on top of that, what I've
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  Speaker 5: seen U in first quarter is a lot of our
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  Speaker 5: audit activity, okay, a lot of added audit activity.
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  Speaker 4: On the pharmacies.
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  Speaker 5: And you know, those audit activities require the audits by
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  Speaker 5: the PBMs require response, right, and it's going to take
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  Speaker 5: away a pharmacy providers not only time, their staff, but
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  Speaker 5: also money because they're gonna lose time to treat the patient.
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  Speaker 5: They're gonna lose staff time to treat the patient, They're
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  Speaker 5: gonna have to defend any egregious or unwarranted audit findings.
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  Speaker 5: And at the same time, you know, let's say there's
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  Speaker 5: an audit finding, you know, just throwing out a number here,
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  Speaker 5: one hundred thousand, okay, and EBMs can start with holding
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  Speaker 5: the money or the start with holding the payments submitted
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  Speaker 5: that should have been paid on the most recent claim
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  Speaker 5: submit about the pharmacies, even when the aud it's it's
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  Speaker 5: few resolution.
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  Speaker 4: Procedure has not been exhausted.
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  Speaker 5: The pharmacy is going to feel the financial strain until
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  Speaker 5: the audit is resolved.
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  Speaker 4: Is the thirty dollar says?
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  Speaker 3: The bill addresses the LTC pharmacy fix by creating a
• 16:19
  Speaker 3: temporary I don't like that word, temporary thirty dollars supplemental
• 16:24
  Speaker 3: supply fee for prescriptions subject to Medicare and negotiated price
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  Speaker 3: the MFP in twenty twenty six. And then they say
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  Speaker 3: and twenty twenty seven, which I'm just like, h like,
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  Speaker 3: this is just going to carry on. But that is
• 16:38
  Speaker 3: that thirty dollars? Is that a band aid?
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  Speaker 5: Not even a band aid, but you know, we could
• 16:45
  Speaker 5: call it as a band aid.
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  Speaker 4: That's not cool, No, not cool at all.
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  Speaker 5: And when a lot of times when pharmacies fill brand
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  Speaker 5: drugs aims.
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  Speaker 4: They lose a lot more than thirty dollars.
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  Speaker 5: Yeah, some lose hundreds, two hundreds, or even three hundreds.
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  Speaker 4: Yep. Yeah.
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  Speaker 3: The excitement of different sectors of pharmacy is knowing that
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  Speaker 3: they will thrive and they will have a different way
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  Speaker 3: of being reimbursed. And long term care always seemed like
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  Speaker 3: it was more insulated than the retail side of things,
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  Speaker 3: and now that's just not the case, especially with the
• 17:29
  Speaker 3: play tectonics of how pharmacies will be in pharmacists will
• 17:33
  Speaker 3: be reimbursed for more of their services and insights in
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  Speaker 3: the future. So if you're a pharmacy owner day and
• 17:42
  Speaker 3: I guess it depends on which state you're in, But
• 17:44
  Speaker 3: if you serve multiple states, for example, what do you
• 17:48
  Speaker 3: encourage these owners and operators to do when it comes
• 17:53
  Speaker 3: to helping their own state and then thus the nation
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  Speaker 3: come up with something that is sustainable in the laws?
• 18:02
  Speaker 3: Are you? Are you pro like reaching out to state
• 18:05
  Speaker 3: representatives to educate them what's going on because of how
• 18:08
  Speaker 3: confusing this all is. What steps would you take as
• 18:11
  Speaker 3: a pharmacy owner?
• 18:15
  Speaker 5: Be involved in your state legislation, Be very involved, and
• 18:20
  Speaker 5: if there's a comment opportunity, make sure you submit a comment.
• 18:26
  Speaker 5: Otherwise BCMA the lobby and group for the PBMs, they're
• 18:31
  Speaker 5: going to submit comments detrimental to your position, to the
• 18:36
  Speaker 5: pharmacy's position, and continue to push forward, continue to educate legislators,
• 18:43
  Speaker 5: patients and everybody else because.
• 18:46
  Speaker 4: You know, and then also.
• 18:50
  Speaker 5: Maintain records because pharmacies will be audited, and be forceful
• 18:58
  Speaker 5: when responding to those all audits.
• 19:02
  Speaker 3: The audits are always uh, it's almost like riding a
• 19:08
  Speaker 3: roller coaster, and then you find out through the mail
• 19:10
  Speaker 3: or something that you're going to be audited, and being
• 19:13
  Speaker 3: prepared for that is is so key. There's there's probably
• 19:18
  Speaker 3: something in your policy and procedures manuals to prepare you
• 19:21
  Speaker 3: for such audits. Is that also tied back to star
• 19:26
  Speaker 3: ratings and how you're impacting the overall plan?
• 19:31
  Speaker 4: Ultimately? Yes?
• 19:32
  Speaker 5: OK, but the you know, but pharmacies will feel the
• 19:38
  Speaker 5: financial strain first when PBMs start with holding money, recouping money,
• 19:45
  Speaker 5: and then you know, based on those findings, PBMs are
• 19:50
  Speaker 5: going to impose additional sanctions network in eruption, suspension, or termination.
• 19:59
  Speaker 5: But I want to end this or end my comment
• 20:04
  Speaker 5: with a positive tone, which is a lot of good
• 20:07
  Speaker 5: things are happening right now in the pharmacy industry in general,
• 20:11
  Speaker 5: or the non PBM owned or affiliated pharmacies let's call
• 20:14
  Speaker 5: it independent pharmacies. A lot of good things happening. We
• 20:18
  Speaker 5: just need to keep the momentum and shift the momentum
• 20:22
  Speaker 5: or rEFInd the momentum to the right direction that actually
• 20:25
  Speaker 5: helps the industry and the patients exactly.
• 20:30
  Speaker 3: All right, if you're listening, you may not be watching
• 20:33
  Speaker 3: on YouTube or some of our social media. If you're
• 20:36
  Speaker 3: just listening in your car driving you want to know
• 20:40
  Speaker 3: the SCPC has a ton of information if you can
• 20:43
  Speaker 3: go to Senior Care Pharmacies dot org and I'll have
• 20:47
  Speaker 3: a link in the show notes for that, and then
• 20:50
  Speaker 3: also reach out to doctor day Lee. He's active on
• 20:53
  Speaker 3: LinkedIn his information. I'll make sure that we have a
• 20:57
  Speaker 3: link to LinkedIn for you to reach out today if
• 20:59
  Speaker 3: you have questions, if you'd like to do something with
• 21:03
  Speaker 3: Buchanan and team up with them to get insights and
• 21:08
  Speaker 3: get a pathway, please definitely reach out today. Every time
• 21:13
  Speaker 3: I talk with you day I feel like I'm empowered
• 21:15
  Speaker 3: to understand things based on the information that's out there,
• 21:18
  Speaker 3: and with all those puzzle pieces on the table of
• 21:21
  Speaker 3: what is the business and ecosystem of pharmacy, you start
• 21:24
  Speaker 3: to really make sense of it.
• 21:25
  Speaker 4: So we always appreciate you. I appreciate they thank you.
• 21:30
  Speaker 3: Hey, you were listening to another episode of Framework Focus
• 21:34
  Speaker 3: Podcasts for everything long term care pharmacy. Take a look
• 21:38
  Speaker 3: Framework ltc dot com Forward Slash podcast once again, that's
• 21:42
  Speaker 3: Framework ltc dot com. Reach out to that team and
• 21:46
  Speaker 3: ask questions if you have any questions about your specific
• 21:51
  Speaker 3: States legislation and how it will impact your long term
• 21:55
  Speaker 3: care pharmacy. They have resources to help you with those
• 21:58
  Speaker 3: and like I said, Day and his team are also
• 22:01
  Speaker 3: available and we thank you for listening.
• 22:03
  Speaker 4: The framework focus