Amid COVID-19, Bipartisan Letter Calls for Pharmacy DIR Reform As Part of Relief

April 27, 2020

115 members of the House have come out in support of eliminating DIR fees in future coronavirus relief packages.

A bipartisan letter has urged Congress to consider including provisions permanently prohibiting pharmacy direct and indirect remuneration (DIR) clawbacks by pharmacy benefits managers (PBMs) in future coronavirus relief packages.1

The published letter cited increased demand and existing financial strain being amplified during the current pandemic as reasons for the bipartisan push for pharmacy DIR reform. The letter was led by Representatives Buddy Carter (R-Ga), Peter Welch (D-Vt), Doug Collins (R-Ga), Raja Krishnamoorthi (D-Ill), John Rose (R-Tenn), and Vicente Gonzalez (D-Texas) and signed by 115 members of the US House of Representatives.1

Results published previously from a NCPA analysis reported that approximately 90% of community pharmacies are expected to apply for small business federal aid under the CARES Act due to the strain caused by the coronavirus.2

Pharmacists have been on the frontlines of the pandemic, addressing drug shortages and supporting their patients. In the letter, lawmakers wrote, “We cannot forget that prior to the pandemic, the pharmacy community was already facing extreme financial strain. Many of our districts have seen a wave of closures, with more than 2000 community pharmacies lost over the last 2 years.”1

Related: NCPA Survey: Nearly 90% of Community Pharmacies Report Drug Shortages

In the previous analysis, 66% of independent pharmacies reported negative cash flow issues such as DIR fees, decreasing reimbursement, and expenses due to COVID-19.3

The report asserted that half of pharmacy owners have payed upwards of $10,000 in pharmacy DIR fees since March 1. At this rate, the average independent pharmacies could have over $100,000 clawed back by next April.3

“Independent pharmacies are stepping up to help their communities through the coronavirus crisis. They are expanding home delivery zones, putting their own health and safety on the line, continuing to provide a paycheck to thousands of workers–quite literally, they are doing more with less as PBMs claw back funds and reimburse prescriptions below the pharmacy’s cost,” B Douglas Hoey, chief executive officer of NCPA, said in the press release. “The majority of neighborhood pharmacies are already experiencing negative cash flow issues and, for their efforts to help through this pandemic, will get a big bill months from now as PBMs come calling for DIR fees. Eliminating these fees and reining in PBMs has never been more vital if pharmacies are to continue operating now and when this emergency passes. Our continued thanks to those policymakers who understand this and are fighting for PBM reform.”3

References:

1. Carter EL, Welch P, Collins D, et al. Bipartisan letter urges permanent DIR fix. NCPA; April 27, 2020. https://ncpa.org/newsroom/qam/2020/04/27/bipartisan-letter-urges-permanent-dir-fix. Accessed April 27, 2020.
2. Local Pharmacies Overwhelmingly Need Coronavirus Small Business Aid as Reimbursement and Cash Flow Decline. News Release. NCPA; April 20, 2020. https://ncpa.org/newsroom/news-releases/2020/04/20/local-pharmacies-overwhelmingly-need-coronavirus-small-business. Accessed April 27, 2020.
3. Front Line Pharmacies Struggling to Pay Unfair Clawback Fees Even While Fighting COVID-19, Says NCPA. News Release. NCPA; April 27, 2020. https://ncpa.org/newsroom/2020/04/27/front-line-pharmacies-struggling-pay-unfair-clawback-fees-even-while-fighting. Accessed April 27, 2020.