Value-based payment, consolidation threaten LTC pharmacies, report claims

The shift to value based payment models, drug repackaging restrictions and consolidations are among the biggest concerns for the long-term care pharmacy sector, according to report released Thursday by research firm Avalere Health and the Senior Care Pharmacy Coalition.

“Long-Term Care Pharmacy: the Evolving Marketplace and Emerging Policy Issues” is the first in-depth analysis for the LTC pharmacy sector since 2004, SCPC President and CEO Alan Rosenbloom told McKnight's.

The shift to value-based purchasing systems will put pressure on LTC pharmacies, as the facilities they serve are expected to meet stricter cost and quality objectives. Facilities will gravitate towards pharmacies that can provide the best medication management services to help them meet their quality goals, report authors note.

Consolidation across the LTC pharmacy sector also may put strain on skilled nursing facilities, the report warns.

“If there are only two or three monolithic pharmacies out there, what it is likely to do is put a lot of pressure on nursing homes to have to pay more for their drugs than if there is a more competitive market place,” Rosenbloom said.

The report also details the constraints placed on pharmacies when it comes to repackaging drugs into emergency kits. The Food and Drug Administration's recently released guidance on repacking drugs could place limits on a pharmacy's ability to put medications into special packages, like emergency medical kits. While the guidance is still in draft phase, enforcement of the limits as they are now could mean pharmacies would no longer be able to provide emergency medication kits to nursing homes, Rosebloom warned.

He added that while many LTC pharmacies are owned and operated by mid-sized provider companies, the contents of the report should be useful for all skilled nursing facilities.

To read the full report, click here.