Under the Inflation Reduction Act (IRA), for designated drugs that are negotiated by CMS in Medicare Part D, the pharmacy is no longer paid by just the Part D plan sponsor but also later will receive a refund amount from the drug company. This dynamic leaves open the possibility of pharmacies running into low cashflow scenarios, for which CMS is proposing a program to help those pharmacies maintain positive balance sheets.
However, under CMS’ proposed plan, the Medicare Drug Negotiation Program, under the IRA, the agency would allow drug companies the sole decision-making authority to decide whether a pharmacy has a cashflow problem. PCMA recently submitted comments to CMS urging the agency to take a different approach to this issue impacting pharmacies. Permitting a drug company to determine if a pharmacy will have cashflow problems in the future is a direct conflict of interest and will lead to drug companies protecting their own financial interests. Otherwise stated, we believe drug companies will decide not to provide pharmacies with any financial assistance.
Don’t take our word for it. The National Community Pharmacists Association (NCPA) warns that “more than 90% of independent pharmacies may decide, or have already decided, to not stock or dispense the selected MFP drugs in the Medicare Drug Price Negotiation Program because of the potential financial losses.” They claim pharmacies will “have to float” thousands of dollars every month waiting for manufacturer refunds.
The Trump Administration has recently gone so far as to acknowledge the existing problems with the current guidance for the Medicare Drug Price Negotiation Program in its April 15, 2025 Executive Order, titled “Lowering Drug Prices by Once Again Putting Americans First.” The executive order requires the Secretary of HHS to gather stakeholder feedback on how drug manufacturers will effectuate the program. This underscores the Administration’s view that current CMS guidance is insufficient and requires further evaluation.
To alleviate these issues, PCMA recommends specific considerations to address these concerns and ensure a transparent, fair, and functional program. CMS should develop standards and maintain oversight to determine if a pharmacy will experience financial problems in the program and what assistance manufacturers are required to provide. There should also be standard mitigation and audit processes, and prompt pay protections to ensure that pharmacies can remain solvent and open for business to serve Medicare patients.
PCMA believes the Administration and CMS need to provide new guidance that includes fixes to these issues to ensure the proper standards and protections are available to pharmacies needing financial help from drug manufacturers to participate in this Medicare Program.
PCMA Recommendation: To alleviate these issues, CMS should create standards by which dispensing entities can qualify as being determined to have cash flow concerns and establish an appropriate mitigation process for qualified pharmacies. CMS must take these steps to protect Medicare beneficiaries so that pharmacies can continue to serve them.
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PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 289 million patients.
