The Service Line

Reimbursement: Independent pharmacies just got a preview of the next fight over what “fair” Medicare pay looks like

This week, the Pharmacy Coalition, led by the National Community Pharmacists Association, met with CMS officials to discuss what “reasonable and relevant” contract terms should mean between pharmacy benefit managers and pharmacies in Medicare Part D networks. The coalition had already filed two memos urging CMS to use its full statutory authority without deferring to Part D’s noninterference clause, and laying out concrete examples of PBM contracting practices it considers abusive. CMS told the group a formal request for information is coming soon so the public can weigh in on defining those terms, adding a second implementation track alongside the bona fide service fee and PBM delinking rulemaking CMS opened in June under the Consolidated Appropriations Act of 2026. New contract standards would first appear in plan year 2028 contracts and take effect January 1, 2029, a full year after the CAA’s delinking mandate lands, so operators are looking at a multi-year runway rather than one reform date. Confidence: High on the meeting and the planned RFI, based on NCPA’s own account. Low on what CMS ultimately adopts, since the RFI itself has not been released. Sources: NCPA’s account of the Pharmacy Coalition’s meeting with CMS, supplemented by McGuireWoods’ summary of CMS’s June Part D PBM reform request for information.

Enforcement: CVS’s long term care pharmacy unit clears its last vote before a judge decides whether its fraud settlement holds

Creditors in Omnicare’s Chapter 11 case had until September 11, 2026 to vote on the CVS Health subsidiary’s reorganization plan, the vehicle carrying the 440 million dollar False Claims Act settlement the long term care pharmacy reached with the Department of Justice on July 1 over more than 3.3 million prescriptions dispensed without valid orders between 2010 and 2018. Judge Stacey Jernigan, who approved the plan’s disclosure statement and voting process on August 12, has set the confirmation hearing for September 17 in the Northern District of Texas, the last formal step before the settlement, 130 million dollars from CVS up front and at least 310 million dollars from Omnicare’s bankruptcy estate, and the underlying 250 million dollar sale to GenieRx Holding can both close. For operators in long term care and institutional pharmacy, this remains the live template for how OIG’s standing “dispensing without a valid prescription” theory gets prosecuted and priced, and a confirmed plan next week closes the last open question from this vertical’s last check-in. Confidence: High on the dates and dollar figures, drawn from the court’s own docket. Medium on confirmation itself, since the creditor vote tally is not yet public. Sources: the Northern District of Texas bankruptcy court’s official case information site, supplemented by Arnold and Porter’s summary of the DOJ settlement terms.

Who’s Buying: The independent PBM tier just got its biggest player

Abarca Health and LucyRx completed their strategic combination on August 20, 2026, closing the deal roughly two months after announcing it and creating a combined pharmacy benefit manager serving more than 9 million commercial and government members, both now wholly owned subsidiaries of Healthcare Revolution Partners. The two brands, leadership teams, and client-facing systems stay separate for now, but the combination pairs LucyRx’s employer-market book with Abarca’s health-plan and government-program compliance expertise, exactly the kind of scale a mid-tier “transparent” PBM needs to absorb the compliance cost of 30-plus state transparency laws stacked on top of the CAA 2026 federal reforms. It is the clearest sign yet that the mid-tier PBM consolidation Drug Channels flagged when the deal was announced is playing out on schedule, and it sharpens the question every plan sponsor evaluating a PBM switch is actually asking: can a 9 million member independent PBM underprice the Big Three on an audited, all-in basis, not just a marketing one. Confidence: High on the close and member count, from the company’s own release. Low on comparative pricing performance, which has not been independently audited. Source: Abarca Health’s own announcement of the completed combination.

Clinical Policy: Medicare started paying toward GLP-1s for weight loss, and nobody has published a single enrollment number yet

CMS’s GLP-1 Bridge demonstration went live July 1, 2026, letting Medicare Part D enrollees with a body mass index of 35 or higher, or 27 or higher plus a qualifying condition, get Foundayo, Wegovy, or Zepbound for a flat 50 dollar monthly copay that does not count toward the deductible or the 2,100 dollar out of pocket cap, running through December 31, 2027 ahead of a planned successor model. CMS’s own modeling put the demonstration’s Medicare spend anywhere from roughly 1.3 billion dollars at 10 percent uptake to 10 billion dollars at 75 percent uptake over its 18 month run, a spread wide enough that formulary and staffing plans for next year are being built without real utilization data to anchor them. Separately, FDA’s window to permanently bar large-scale compounding of semaglutide and tirzepatide closed July 30 with still no final rule issued, so the compounded alternative operators have been steering patients away from remains technically legal even as the sanctioned Bridge option opens up. Confidence: High on program terms, from CMS’s own release. Low on actual uptake, since CMS has not published enrollment data as of this issue. Sources: CMS’s press release announcing the GLP-1 Bridge program, supplemented by CMS’s GLP-1 Bridge program page.

The Operator Metric: 24

NCPA’s own 2025 Digest put the number of independent community pharmacies at 18,960 as of July 2025, down from 18,984 in June 2024, a net loss of just 24 stores nationally in 13 months, far short of the “roughly one a day” closure framing that same trade group’s separate survey data implies once new openings are netted out. That does not mean the reimbursement pain is fictional. The same Digest found 2024 delivered a 10-year high in cost of goods sold, a 10-year high in average annual sales, and a 10-year low in gross profits, with average prescription volume per store climbing to 67,601 from 59,644 the year before, consistent with surviving independents absorbing the volume of the few that did close. Meanwhile the distribution layer behind those pharmacies is doing the opposite of struggling: Cencora is spending 1 billion dollars automating and expanding its US drug distribution network, including a 430,000 square foot Fontana, California facility slated to open this fall, while McKesson used its July ideaShare conference to pitch pharmacy customers on AI-driven central fill. If your specialty group or MSO depends on an independent or long term care pharmacy network for adherence, the risk this year is not a wave of closures, it is thinning margins and rising per-store volume at the pharmacies that remain, while the wholesalers between you and them get bigger and more automated. Confidence: Medium. This is NCPA’s own membership census and Digest data rather than an independently audited count, but the store-count and margin figures come from the same source and are internally consistent. Sources: NCPA’s 2025 Digest report, supplemented by Distribution Strategy Group on Cencora’s automation investment and Pharmacy Times’ coverage of McKesson’s ideaShare 2026.