New Analysis Finds the Medicare Drug Price Negotiation Program Threatens Financial Stability of American Pharmacies
Today, the National Community Pharmacists Association released a first-of-its-kind analysis, Unpacking the Financial Impacts of Medicare Drug Price Negotiation, conducted by 3 Axis Advisors. The report concludes that the Inflation Reduction Act's Medicare Drug Price Negotiation Program (MDPNP) exposes small and independent pharmacies to significant financial risk, potentially disrupting seniors' access to essential medications and services.
The analysis warns that the implementation of the MDPNP represents a fundamental shift in pharmacy operations and reimbursement practices for many of Medicare's most widely used prescription brand medicines. Under the MDPNP, pharmacies face lost revenue and significant disruption in cash flow — without adequate protection to help absorb these changes.
Findings from the analysis further revealed that these policy changes will result in:
Payment delays: Pharmacies will face prescription payment settlement delays of at least seven additional days for negotiated drugs, exceeding current Medicare Part D prompt pay requirements.
Weekly cash flow shortfalls: Each pharmacy stands to lose nearly $11,000 in weekly cash flow due to delayed payments.
Annual revenue losses: Pharmacies could forfeit an average of $43,000 in annual revenue — roughly equivalent to a pharmacy technician's yearly salary.
These financial impacts could lead to significant consequences, such as pharmacy closures, reduced medication availability and staffing cuts, ultimately causing disruptions for seniors at the pharmacy counter. The financial disruptions come at a time when community pharmacies are closing at an unprecedented rate. Over 7,000 pharmacies have closed in less than 10 years.
Furthermore, as explored in the analysis, 340B covered entities may have less revenue available for charitable care or expanded health care services (i.e., dental care) as a result of the MDPNP. Additionally, while 340B contract pharmacies may receive a fixed amount per 340B prescription, the reduction in revenues may result in reduced dispensing fee payments or carveouts (i.e., removal of MFP drugs from 340B relationships between covered entities and contract pharmacies).
'Like many government programs, the intent is good, but the unintended consequences undermine the goal,' said NCPA CEO B. Douglas Hoey, pharmacist, MBA. 'That's exactly the case here. Everyone wants to reduce drug costs for seniors and taxpayers. But, as our research shows, the program is structured in a way that will force many independent pharmacies out of the Medicare Part D program. Drug costs may come down, but there will be a shortage of pharmacies to dispense medicine. Seniors will be stranded without a pharmacy, and they won't get the benefit of lower drug prices.'
The MDPNP was introduced under the Inflation Reduction Act of 2022 with the stated goal of lowering Medicare prescription drug costs. The program grants Medicare the authority to directly negotiate prescription drug costs with drug manufacturers for a select number of high-cost drugs covered under Medicare Part D (outpatient drugs) and, later, Medicare Part B (physician-administered drugs). Medicare has already completed negotiation for the first 10 medications whose prices, known as the Maximum Fair Price (MFP), will take effect Jan. 1, 2026. As established by the Inflation Reduction Act, additional drugs will be subject to negotiation each year. Earlier this month, the Centers for Medicare & Medicaid Services announced the 15 drugs that will be subject to negotiation in 2027. However, expanding the list of MFP drugs is already raising concerns for pharmacies, as a recent NCPA member survey revealed that 93.2 percent of independent pharmacies are either considering not stocking or have already chosen not to stock one or more of the first 10 drugs included in the MDPNP.
Unpacking the Financial Impacts of Medicare Drug Price Negotiation emphasizes that pharmacies bear significant financial strain under this policy. The analysis offers several recommendations for pharmacies to mitigate risks, including establishing short-term financing solutions, closely monitoring manufacturer settlement timelines, and proactively adjusting liquidity and financing strategies — none of which address the fundamental flaws in the program's design.
With the program set to take effect at the start of 2026, implementation is already underway across all the implicated stakeholders, including pharmacies. Accordingly, NCPA strongly urges the new administration and Congress to immediately freeze implementation until robust safeguards are in place to protect both pharmacies' financial viability and seniors' access to essential medications.
About Unpacking the Financial Impacts of Medicare Drug Price Negotiation
Unpacking the Financial Impacts of Medicare Drug Price Negotiation was developed by 3 Axis Advisors, with funding from NCPA, to assess the financial and operational impact of the Medicare Drug Price Negotiation Program, as enacted by the Inflation Reduction Act, on pharmacies. The findings highlight the urgent need for reforms that protect pharmacies — especially smaller, community-based businesses — and ensure they can continue to provide critical health care services to seniors. You can read the full analysis here and executive summary here.
Founded in 1898, the National Community Pharmacists Association is the voice for the community pharmacist, representing over 18,900 pharmacies that employ more than 205,000 individuals nationwide. Community pharmacies are rooted in the communities where they are located and are among America's most accessible health care providers. To learn more, visit www.ncpa.org.
About 3 Axis Advisors
3 Axis Advisors is an elite, highly specialized consultancy that partners with private and government sector organizations to solve complex, systemic problems and propel industry reform through data driven advocacy. With a primary focus on identifying and analyzing U.S. drug supply chain inefficiencies and cost drivers, 3 Axis Advisors offers unparalleled expertise in project design, data aggregation and analysis, investigative research, and public education. 3 Axis Advisors arms clients with independent data analysis needed to spur change and innovation within their respective industries. To learn more about 3 Axis Advisors LLC, visit.
Copyright Business Wire 2025.
PUB: 01/30/2025 11:25 AM/DISC: 01/30/2025 11:25 AM
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
13 hours ago
- Forbes
Time For Medicare Advantage Leaders—Including Me—To Eat Our Own Cooking
Dr. Oz just turned 65 and became a Medicare beneficiary. Everyone who operates a Medicare plan ... More should be required to be one as well. In every industry, the best leaders live the experience of the customer. Car executives drive their own vehicles. Airline leaders occasionally fly coach. Restauranteurs eat from their own kitchen. But in healthcare—and specifically in Medicare Advantage (MA), which now serves more than 30 million Americans—the leaders designing these plans rarely, if ever, use them themselves. This disconnect breeds an empathy gap between decision-makers and the seniors whose lives and well-being depend on these products. It's time to close that gap. As Dr. Mehmet Oz turns 65 and qualifies for Medicare, he is in a unique position to lead the charge in fixing this blind spot. But I'm not letting myself off the hook either. As a current CEO of company that sells Medicare Advantage plans, I am proposing a standard that would apply to me and every other leader in this space: if you run a Medicare Advantage plan—or sit on its executive team that runs these plans—you should be required to enroll in that plan. No carve-outs. No executive-only exemptions. No platinum side-door coverage. For those of us under 65, the proposal would also require a structural change: expanding Medicare eligibility to allow MA plan executives early, voluntary enrollment in their own plans. We should not be allowed to claim ignorance or detachment simply because of our age. I want to be clear: if such an early-enrollment window existed, I would enroll myself. I should have to live under the same benefit design, customer service, and network constraints as every other member. Leaders like me—and my peers across the industry—must eat our own cooking.A Modest But Necessary Reform The proposal is simple but powerful: 1. All managed care CEOs and executive teams must enroll in their own MA plan. 2. Congress and CMS should create a new category of Medicare eligibility that allows executives under 65 to voluntarily enroll in their own MA plans in a 'test user' capacity. This is the only way for leadership to truly understand the member experience. 3. No waivers, no special coverage allowances. The goal is to force leadership to live the true plan reality: the prior authorizations, the formularies, the network restrictions, the call centers, the appeals It Matters—for Me, and for the Industry I don't make this proposal lightly—because it would apply to me, too. If this became law or industry standard tomorrow, I would sign up. And I believe most honest leaders would welcome the clarity and accountability it would bring. Here's why it matters:- Operational Truth: You only truly understand the friction points—customer service delays, billing errors, prescription denials—if you live them yourself.- Accountability: Plan leaders would no longer tolerate broken systems they themselves have to endure.- Culture Change: A company where the C-suite shares the same risks and frustrations as members cannot help but become more consumer-focused.- Public Trust: Medicare Advantage is under increasing scrutiny from policymakers and the public. This move would send a clear, ethical signal: we stand behind what we sell.- Policy Innovation: The best ideas for simplifying prior authorization, improving networks, and reducing out-of-pocket costs would come not from distant consultants—but from firsthand More 'Not For Me' Products Too much of healthcare is designed by people who never have to use it. Too many decisions are made in corporate conference rooms far removed from the lived experience of real patients. If Medicare Advantage is the future of healthcare for seniors—as so many believe—its architects must also live that future. That includes Dr. Oz. That includes every MA CEO. And that includes me. It's time for all of us to eat our own cooking.
Los Angeles Times
19 hours ago
- Los Angeles Times
Simplify your finances with fewer credit cards
Dear Liz: I have too many credit cards that I opened to get frequent flier points. I understand that closing a credit card lowers your credit scores. How long does the ding last? How long should I wait before closing another card? Do you have any other advice on this subject? You probably have discussed this in previous columns but might be worth repeating. Answer: If you have a lot of cards, closing a few is unlikely to significantly hurt your credit scores as long as you do so strategically. A big chunk of your credit scores is determined by how much of your available credit you're using. You want a large gap between the amounts you charge and your credit limits. Try to keep open the cards with the highest credit limits. If you have multiple cards with the same issuer, ask if the credit limit from a card you're closing can be transferred to one you're keeping. Even if your scores do dip because of a closure, the impact is likely to be short-lived if you continue using credit responsibly. Ideally, you would review your portfolio of credit cards every year or so to determine which cards to keep and which to close. Travel rewards cards typically have annual fees, sometimes significant ones, so you'll want to make sure every card you have is at least paying for itself in annual rewards and benefits. Also consider the mental load involved. As you age, you may find it more difficult to monitor multiple accounts and keep track of all the details. You may want to simplify your finances by winnowing your cards down to just one or two. At that point, keeping your finances manageable will be more important than maintaining the highest possible credit scores. Dear Liz: If someone inherits my retirement account, is there any way they can avoid having their Medicare premiums increased for 1 year? Answer: A large-enough retirement account could affect their Medicare premiums for up to 10 years, not just one. Normally inheritances aren't taxable, but retirement accounts are the exception. Withdrawals from inherited retirement accounts are usually taxable as income, and most non-spouse inheritors must drain a retirement account within 10 years. Withdrawals from inherited Roth accounts aren't taxable, but the accounts still must be drained by the inheritor within a decade. If the inheritor is on Medicare, taxable withdrawals could boost income enough to increase their Medicare premiums, thanks to the income-related monthly adjustment amounts (IRMAA). This surcharge starts once modified adjusted gross income exceeds certain amounts, which in 2025 is $106,000 for single filers and $212,000 for married couples filing jointly. Anyone who inherits a retirement plan should get advice from a tax pro, but that's particularly important when withdrawals might affect tax brackets and Medicare premiums. The pro can help determine how quickly or slowly the money should be withdrawn to maximize how much the inheritor gets to keep. Dear Liz: I waited until age 70 to start collecting Social Security. My wife turns 65 this year so her full retirement age is 67. Can she start collecting Social Security benefits now based on my benefit or should we wait until her full retirement age? Answer: If she applies for Social Security now, she would be 'deemed' to be applying for both her own benefit and her spousal benefit and given the larger of the two. She would not be allowed to switch to the other benefit later. Most people are better off waiting at least until their full retirement age to apply, and many will maximize their lifetime benefits by delaying until age 70. Her mileage may vary, of course, so it's worth using a Social Security claiming calculator and consider getting advice from an objective source, such as a fee-only financial advisor. Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the 'Contact' form at
Yahoo
20 hours ago
- Yahoo
An Open Letter to the President: Addressing our Debt
Donald J. TrumpThe Mar-a-Lago Club1100 South Ocean BoulevardPalm Beach, Florida Dear President Trump: I voted for you in all three of your presidential campaigns. The first time, I cast my vote with cautious optimism. The third time, with enthusiasm. And I contributed financially to your campaign. You have achieved what few thought possible - a triumphant return, driven by a deep-seated belief among millions of Americans that only you can effectively challenge the entrenched political establishment. Your first 100 days were extraordinary, but if your presidency is to be remembered not just as bold but also historic, one challenge must rise above all others: - the national debt. The national debt, currently $37 trillion, is the result of pervasive fiscal irresponsibility, accumulated over many decades. Our annual interest payments now exceed $1trillion - more than we spend on our national defense. This is not just a financial burden. It is a threat to the survival of our country as a democratic republic. Without immediate, decisive action, the consequences are predictable: more credit downgrades, more increases in interest rates, and crippling obligations to service the debt. What would happen to our great country if annual interest payments exceeded not just our defense budget but also Social Security, Medicaid, and Medicare? Mr. President, if we are to remain a vibrant nation, this exploding national debt has to be attacked immediately and significantly. That will not happen without your leadership. Sadly, the Republican Party has shown that it is not a reliable ally. Even before Republicans regained control of the House, they held a secret vote. By a margin of 158 to 2 they brought back earmarks - the very same pork barrel spending practices that Speaker John Boehner put to bed. Since then, the Democratic Congress never dared to bring back earmarks. House Republicans did. The results were predictable, and immediate: $16 billion in earmarks. More than 7,500 pet projects. In the Senate, eight of the 12 largest earmarkers are Republicans. In the House, 48 of the top earmarkers are Republicans. Here are the largest earmarkers: Sen. Susan Collins of Maine (population 1.4 million) secured $870 million in earmarks. Sen. Lisa Murkowski grabbed $851.1 million in earmarks. Sen. Mitch McConnell took nearly $500 million in earmarks. My own congressman, Brian Mast, walked away with $437 million in earmarks. Obviously, eliminating pork barrel spending wont, by itself, address the structural problems in Washingtons budget process - or make the "big, beautiful bill" currently being debated in Congress deficit-neutral. But if members of Congress cant even control themselves, what kind of example do they set for the American people? How can politicians ask their fellow Americans to sacrifice when they wont do it themselves? Actions speak louder than words. Fiscal irresponsibility dominates the culture within Congress, within our government. That culture, obviously, will not change on its own. It can be changed. But only with your leadership. Mr. President, fortunately, today you have a tool to attack waste, fraud, duplication, and incompetence. Because of the cloud, Big Data, and the Freedom of Information Act, you can deliver every government expenditure to every citizens cell phone, iPad, and computer. You can bring a new era to government, i.e., transparency. Mr. President, you can be the launch pad for transparency. Imagine a government where every single taxpayer dollar that government spends is tracked and reported to the public. Imagine the cultural shift from secret votes, from wasteful spending to one where every government official knows their budgets will be scrutinized in detail. Mr. President, here are several all-encompassing, culture-changing, deficit-attacking actions you can announce tomorrow: Lead by example: Cut White House expenses by a defined percentage. Report the savings to the public every quarter. Challenge Congress: Ask every member to cut their office and committee budgets. Suggest at least 10%. Publish a quarterly report on every senator and representative. Eliminate pork-barrel projects: Call on Congress to abolish earmarks. Shine a light on every remaining earmarker until they fall in line. Mobilize the bureaucracy: Instruct all agencies to focus on rooting out waste, fraud, duplication, and incompetence, and report the progress quarterly. Say explicitly that you will monitor progress and report the bold and expose the complacent. Bringing transparency to government can do more than clean up wasted taxpayer dollars. It can rebuild trust. It can remind the American people that the government can still work for them. It will solidify your legacy as the chief executive who did not just talk about draining the swamp, you did it. Imagine our country if we did not have to spend $1 trillion each year on interest payments. That is the future Americans deserve. Mr. President, you have been given a historic mandate. You can leave office with a legacy as the president who did not just promise to "Make America Great Again," but who actually did it. America cannot be made great again without addressing the greatest threat to our countrys survival as a democratic republic - the exploding national debt. Respectfully, Thomas W. Smith Thomas W. Smith is the founder of Prescott Investors, Inc.
