Key Takeaways for Independent Pharmacy Owners
- MFN and MFP pricing shift financial risk to dispensing pharmacies.
- Expect increased audit and data-request activity.
- Do not assume manufacturers have automatic audit rights.
- Cash-flow strain is as significant as margin compression.
- Inventory decisions must be proactive, not reactive.
Throughout 2025, the Trump administration signed deals with pharmaceutical manufacturers to lower prescription drug prices for Americans by tying them to a most-favored-nation (MFN) pricing model. These agreements function alongside the federal government’s implementation of maximum fair price (MFP) reimbursement under Medicare and Medicaid, fundamentally altering how certain drugs are priced and reimbursed.
These manufacturer agreements also intersect with the Medicare Drug Price Negotiation Program established under the Inflation Reduction Act (IRA), which took effect on January 1, 2026. Under this program, the Centers for Medicare & Medicaid Services (CMS) will require pharmacies to dispense certain high-cost drugs at full acquisition cost and later reconcile reimbursement through manufacturer-paid refunds tied to the negotiated MFP. CMS has already finalized guidance for the first 10 MFP drugs, compressing the timeline for pharmacies to adapt reimbursement processes, system configurations, and administrative workflows.
While these patient-focused policies reduce costs for individuals, they shift significant financial, operational, and compliance burdens onto pharmacies. Independent pharmacies may lack the scale, purchasing leverage, and balance-sheet flexibility needed to absorb pricing distortions created when reimbursement benchmarks change faster than acquisition costs.
The most recent agreements, involving nine manufacturers, tied drug prices to the MFN model and reduced prices for Medicaid patients with chronic conditions such as type two diabetes, rheumatoid arthritis, multiple sclerosis, asthma, chronic obstructive pulmonary disease, hepatitis B and C, human immunodeficiency virus, and certain types of cancers. Critically, the discounted prescriptions are only available to patients who purchase them from Trump Rx.
For many independent pharmacies, these developments raise serious concerns about dispensing viability, reimbursement shortfalls, audit exposure, and cash-flow sustainability. While the agreements directly impact drug manufacturers, independent pharmacies must be prepared for significant downstream operational and financial impacts.
MFN and MFP Models: Why Independent Pharmacies Are Exposed
Under MFN and MFP frameworks, manufacturers are pressed to lower prices paid by government programs. However, pharmacy acquisition costs do not automatically adjust in real time. Under CMS’s final MFP guidance, pharmacies will continue to purchase drugs at market or contract rates, dispense them at full acquisition cost, and then wait weeks for a manufacturer-paid refund reflecting the negotiated MFP.
This structure creates a pricing and timing mismatch. Pharmacies must finance high-priced inventory upfront while reimbursement is delayed and subject to reconciliation. In many cases, reimbursement benchmarks tied to the MFP may fall below the pharmacy’s actual acquisition cost, particularly where wholesaler pricing lags or contract terms exclude negotiated products.
As a result, independent pharmacies may be required to front the cost of high-priced inventory while receiving reimbursement below acquisition cost or receiving delayed refunds. For high-cost or specialty medications, even a small pricing differential or reimbursement delay can create a material loss.
Notably, pharmacies cannot easily opt out. Patient care obligations, network participation requirements, and PBM contract terms may require continued dispensing, even when doing so produces a negative margin.
Manufacturer Audit Activity: What Has Changed and Why It Matters
Historically, when pharmaceutical manufacturers are faced with government pricing pressure, they often increase audit and data-collection efforts to protect margins and identify opportunities for revenue offsets.
In 2025, AstraZeneca, the manufacturer of FARXIGA, one of the drugs selected for price negotiations in 2026, sent letters to independent pharmacies seeking detailed purchasing and dispensing reports. These types of requests, in which other manufacturers have also been engaged, seek to identify revenue offsets and mitigate financial exposure.
We expect manufacturers to rely increasingly on pharmacy-level data to validate refund calculations, monitor distribution channels, and identify perceived pricing or utilization anomalies. These requests may therefore serve multiple purposes beyond simple verification, including supporting future repayment demands or expanded audit activity.
Manufacturer communications are frequently framed as “routine,” “voluntary,” or “compliance related,” but recent communications have become more aggressive and, in some cases, threatening. Pharmacies should proceed with caution. Responding to any manufacturer request without proper review and legal guidance can expose pharmacies to repayment demands, expanded audit scrutiny, or inappropriate use of pharmacy data.
Importantly, pharmacies often have no direct contractual relationship with manufacturers, which may limit a manufacturer’s legal right to demand access to pharmacies’ records. Providing incomplete, inconsistent, or unreviewed data may create discrepancies between acquisition cost, reimbursement, and refund records that later surface in manufacturer, PBM, or government audits.
Cash-Flow Pressure and Inventory Risk in 2026
MFN and MFP models are expected to create sustained cash-flow disruptions for independent pharmacies. Under CMS’s MFP framework, pharmacies must dispense covered drugs at full acquisition cost and then wait for a manufacturer-paid refund, with industry participants projecting reimbursement delays of three to four weeks or longer.
Industry estimates indicate that pharmacies dispensing MFP drugs may be required to float tens of thousands of dollars per month in acquisition costs.
This is not a one-time disruption. MFP reimbursement mechanics create an ongoing working-capital obligation that many independent pharmacies are not structured to absorb, particularly when combined with existing PBM reimbursement lag, retroactive pricing adjustments, and audit recoveries.
CMS guidance also permits manufacturers to calculate MFP refunds using either wholesale acquisition cost (WAC) minus MFP or actual acquisition cost (AAC) minus MFP. This variability increases reconciliation complexity and can result in inconsistent refund amounts across products or payors, complicating accounting, forecasting, and audit preparedness.
In certain cases, continuing to stock a specific negotiated drug may no longer align with a pharmacy remaining a viable business. Pharmacies may need to make intentional, data-driven inventory decisions rather than assuming losses can be offset through volume.
Why This Matters for 2026 and Beyond
The Trump administration’s drug pricing strategy reflects a broad, long-term shift toward government-driven pricing models. Similar dynamics are likely to expand across additional drugs, payors, and programs.
Independent pharmacies should anticipate continued margin pressure, heightened oversight, and evolving reimbursement structures well beyond 2026. Planning and risk mitigation will be essential to long-term sustainability.
What Independent Pharmacy Owners Should Do Now
Independent pharmacies should consider taking the following steps now:
- Identify drugs subject to MFN or MFP negotiations.
- Model MFP–related cash-flow exposure by drug, including refund timing assumptions.
- Review wholesaler contracts and reimbursement terms.
- Conduct internal audits of purchasing, dispensing, and inventory records.
- Assess whether the pharmacy’s systems can track MFP drugs and refunds at the National Drug Code level.
- Establish internal review protocols for manufacturers and PBM requests.
- Consult legal counsel before responding to audit or data demands.
How Barclay Damon Helps Independent Pharmacies Nationwide
As drug pricing policy evolves, independent pharmacies must remain proactive. Barclay Damon’s national Pharmacy Team advises pharmacies across the United States on manufacturer audit requests, PBM disputes, documentation practices, reimbursement issues, and compliance risks.
Establishing strong documentation and reconciliation procedures now will help protect your pharmacy if additional manufacturers adopt aggressive audit strategies in 2026 and beyond.
If your pharmacy has questions about drug pricing changes, manufacturer or PBM audit requests, or reconciliation issues, contact Barclay Damon for guidance.
If you have any questions regarding the content of this alert, please contact Brad Gallagher, co-leader of the Health Care Controversies and Pharmacy Teams, at bgallagher@barclaydamon.com; Alix Hirsh, associate, at ahirsh@barclaydamon.com; or another member of the firm’s Health Care Controversies or Pharmacy Teams.