In December, the NCPA asked our members for their feedback on the issues of highest priority to them. Their input is invaluable. The 2018 priorities survey helps inform NCPA’s advocacy agenda and helps us push for a marketplace where community pharmacies and their patients can thrive.
What our members told us, loud and clear, is that the elimination of retroactive direct and indirect remuneration (DIR) fees in Medicare Part D plans is their highest priority. These fees are recouped from pharmacies by pharmacy benefit managers (PBMs) weeks or even months after seniors pick up their prescription. The uncertainty is maddening for community pharmacists. After all, how do you operate your business when you can’t predict cash flow? And, these fees are bad for seniors who pay the inflated price and are pushed more quickly into the Medicare Part D coverage gap.
Spurred by NCPA’s concerns, the Centers for Medicare and Medicaid Services (CMS) has expressed skepticism about the way DIR fees are applied. In January 2017, CMS warned that DIR fees increase costs for Medicare beneficiaries and the federal government. Then in April 2018, CMS issued a final rule asserting its statutory authority to require that some portion of rebates and pharmacy DIR fees be applied at point of sale. The final rule stops short of requiring such a change, instead stating that new requirements “would be proposed through notice and comment rule-making in the future."
The regulatory progress is one route, but NCPA is also advocating for passage of S. 413/H.R. 1038 in Congress, "The Improving Transparency and Accuracy in Medicare Part D Drug Spending Act," which would prohibit pharmacy DIR fees from being applied retroactively.
The second advocacy issue identified by NCPA members is the continued lack of transparency in how PBMs calculate reimbursement rates for generic drugs. PBMs use multiple maximum allowable cost (MAC) lists, which can under-reimburse pharmacies, yet they charge plan sponsors a higher price for the drug and profit from the spread. The take-it-or-leave-it PBM contracts that community pharmacies must sign enshrine this inequity.
So how is NCPA addressing this challenge? One way is by supporting H.R. 1316, “The Prescription Drug Price Transparency Act,” which would provide clarity for how MAC prices are determined. The bill also creates an appeals process for contesting below-cost reimbursements and bans PBMs from requiring patients use mail order and specialty pharmacies where the PBM has an ownership interest. These changes would apply to Medicare Part D, TRICARE, and the Federal Employee Health Benefits programs.
Up next: The third priority