Pharmacists Say They May Not Stock Less-Expensive Medicare Drugs

by Brian Scott-Smith

ALEXANDRIA, VA – A new survey by the National Community Pharmacist Association(NCPA) says that around 90% of their nearly 20,000 independent pharmacy members say they may opt not to sell reduced priced Medicare Part D program drugs starting in 2026.

The survey comes on the heels of the federal government’s first successful effort to negotiate lower prices for an initial 10 drugs in the Part D program that treat diabetes, blood clots, and heart disease in an attempt to help those who need them spend less on the otherwise expensive prescription drugs.

National Community Pharmacist Association CEO B. Douglas Hoey Credit: Contributed photo / NCPA

However, as NCPA CEO B. Douglas Hoey says, the Centers for Medicare & Medicaid Services (CMS) has missed a key part of the problem.

“Unfortunately, the new CMS guidance fails to ensure fair reimbursement for pharmacies that dispense the drugs,” Hoey said. “It also fails to ensure timely reimbursement. Pharmacists are healthcare providers and pharmacies are also businesses that can’t afford to lose money on prescriptions they dispense. The president’s entire program is in jeopardy if that isn’t addressed.”

A big part of the equation is what are called Pharmacy Benefit Managers, or PBMs. These are middlemen who effectively control the drug market in the US, from how drugs are priced to reimbursing pharmacies for dispensing them, and even deciding which drugs people can access.

Hoey says the Medicare Drug Price Negotiation Program, which starts in January 2026, will tie up around $27,000 a month of pharmacies’, money leaving them to wait for reimbursement.

“For many pharmacies, the resulting cash flow crunch will be too much for them to absorb in an already difficult payment environment,” Hoey said. “Importantly, the CMS guidance offered no assurances that the payments to pharmacies from PBM middlemen would cover the pharmacy’s costs to acquire and dispense the medicine.”

PBMs have been around since the late 1960s in the US. They were supposed to help health insurance companies manage prescription drug spending but as time went on, they have become more powerful as third-party administrators who continue to work on behalf of the health insurance companies that own them.

Three of the largest PBMs in the country are:

• CVS Caremark, owned by CVS Health;
• Express Scripts, owned by health insurance giant Cigna, and;
• OptumRX part of the United Health Group Insurance company.

Between them, according to the NCPA, they control around 80% of all prescriptions in the US.

Connecticut Pharmacists Association CEO Nathan Tinker, Ph.D Credit: Contributed photo / Connecticut Pharmacists Association

Nathan Tinker, CEO of the Connecticut Pharmacist Association, says that because of these powerful PBMs, in Connecticut alone, over the past few years the state has seen the number of independent pharmacies drop from over 130 to around 65.

“PBMs have made it extremely difficult for independent pharmacies particularly to make money on prescriptions,” Tinker said. “And, you know, when you’re being reimbursed 80 cents on the dollar on what it costs you to buy the drugs wholesale, there’s no way that you can maintain a business at that level.”

Currently the Federal Trade Commission is suing the three big PBMs for engaging in what they allege is “anticompetitive and unfair rebating practices” that have artificially inflated the price of drugs like insulin, used by millions of Americans.

In 2012, a 30-day supply of insulin cost $271. By 2021 it had almost doubled in price to $499.

However, relief for diabetics may be in sight as three large diabetic drug manufacturers – Sanofi, Novo Nordisk and Eli Lilly – have all agreed to cap the cost of insulin to $35 a month for many patients, but not before state lawmakers around the country began pushing back against the rising cost of this life saving drug.

Connecticut, like other states, has passed limited legislation to try to make PBMs more transparent in their negotiations with pharmacies and about prescription drug costs.

But Tinker says the legislation has made little impact so far and the General Assembly needs to do more.

“Do they try to save and promote small independent pharmacies and create better access for patients? Or do they listen to, let’s face it, major employers in the state who may have a different approach?” Tinker asks. “So, I don’t envy Connecticut’s agencies and legislature on this front. But they have to do a much better job looking at PBM transparency and how it is actually affecting patients in their districts and in their towns.”

Greg McKenna, who chairs a small group of five independent pharmacies in Middlesex and New London counties called Nutmeg Pharmacy, attested to the difficulties.

McKenna’s store in Moodus, which opened originally in 2020 when the existing pharmacy closed following the death of its owner, has had to cut its daily opening hours and close on Sunday just to stay in business.

He said it’s because of the way PBMs conduct their business with independent pharmacies like his, playing “hard-ball” and offering “take it or leave it” contracts that force the pharmacies dispensing prescription drugs to accept reimbursement at cost or below cost, leaving them financially underwater when they have staff and other overhead costs to pay.

McKenna has started speaking out more about the PBMs to his clients and giving unvarnished presentations to local customers about the “reality of healthcare costs” and why the fight is “their problem as well.”

He says he hasn’t decided yet as to what his position will be for the Medicare Part D drugs in 2026, but he also isn’t happy with the status quo regarding PBMs and his perception that there’s been a lack of action by the state.

“If we agree that affordable value-based healthcare for all is the goal, then PBM transparency is a necessity, for business people, state-based regulators and managers, taxpayers and key legislators,” McKenna said, adding that “they need to be able to understand where all the money is being spent, or wasted, or directed toward the chosen few. But PBM transparency without the necessary legislation that enforces this goal fails everyone in our nation that are working hard to make healthcare for all a reality.”