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Pharmacy Coalition Praises Legislation To Reform Pharmacy DIR Fees

DIR fees

With pharmacy access top-of-mind due to the pandemic and with drug- pricing concerns remaining a national policy priority, organizations representing pharmacies and pharmacists are lauding legislation to confront the serious issue of pharmacy direct and indirect remuneration (DIR) fees.

The organizations offered these comments:

 “DIR fees are exerting unnecessary and devastating pressures on patients, on pharmacies and on communities – particularly the most vulnerable and the underserved. We welcome the introduction of the Pharmacy DIR Reform to Reduce Senior Drug Costs Act, and we urge its passage this year.”

“We greatly appreciate the strong and bipartisan leadership on this issue in the U.S. Senate of Sen. Jon Tester (D-MT), Sen. Shelley Moore Capito (R-WV), Sen. Sherrod Brown (D-OH) and Sen. James Lankford (R-OK), and that in the U.S. House of Representatives of Rep. Peter Welch (D- VT), Rep. Morgan Griffith (R-VA), Rep. Buddy Carter (R-GA), Rep. Vicente Gonzalez (D-TX), Rep. Diana Harshbarger (R-TN), Rep. Abigail Spanberger (D-VA), Rep. John Rose (R-TN) and Rep. Raja Krishnamoorthi (D-IL).”

“We also commend the leadership of Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Chuck Grassley (R-IA) who advanced these legislative concepts with effectiveness and dedication last year during consideration of drug-pricing legislation. It now is imperative for this legislation to be passed and enacted.”

“Resulting from a regulatory loophole, DIR fees charged by payers to pharmacies have the net effect of needlessly inflating Medicare patients’ out-of-pocket prescription drug costs and jeopardizing the viability of pharmacies.”

  • A 2020 Drug Channels report found that DIR fees charged to pharmacies grew from $229 million in 2013 to an estimated $9.1 billion in 2019;
  • The Centers for Medicare & Medicaid Services (CMS) has attributed the growth of pharmacy DIR fees to plans’ use of “performance assessments” of pharmacies. These assessments are arbitrary, lack transparency and oversight and are often inappropriate based on the drugs the pharmacy dispenses and manages. According to one recent evaluation, CMS found that fees based on these measures skyrocketed by 225 percent from 2012 to 2017 – a trend that has sustained;
  • CMS has stated that DIR fee reform will save beneficiaries approximately $7.1 billion-$9.2 billion in reduced cost-sharing;
  • Needlessly inflated drug costs decrease the chances that patients take their medications as prescribed, which leads to diminished health outcomes and increased healthcare costs resulting from more expensive treatments that could have been avoided; and
  • According to IQVIA data, from December 2017 to December 2020, the U.S. lost more than 2,300 pharmacies.

“This pivotal legislation seeks to reduce patients’ cost-sharing, prevent plans and pharmacy benefit managers from clawing back fees from pharmacies, enhance price transparency and establish consistent pharmacy performance measures that foster quality care and that enhance the viability and predictability of pharmacy operations.

“Rightfully, much has been said during the pandemic about the importance of there being a pharmacy within five miles of 90 percent of Americans. This is a powerful statement about the needs of Americans and about the value of pharmacies, and the Pharmacy DIR Reform to Reduce Senior Drug Costs Act is a necessary response to the health and wellness needs of all Americans.”

The organizations include: National Community Pharmacists Association, National Association of Chain Drug Stores, National Association of Specialty Pharmacy, American Pharmacists Association, FMI – The Food Industry Association, National Grocers Association, National Alliance of State Pharmacy Associations and American Society of Consultant Pharmacists.

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