Drugstore Chains, Pharmacy Groups Support CMS DIR Fee Rule

February 11, 2019

More than 150 pharmacy stakeholder organizations - including drug chains such as Walgreens - support a Centers for Medicare and Medicaid Services’ proposal that would eliminate direct and indirect remuneration (DIR) fees.

More than 150 pharmacy stakeholder organizations - including drug chains such as Walgreens - support a Centers for Medicare and Medicaid Services’ proposal that would eliminate direct and indirect remuneration (DIR) fees.

NACDS, NCPA, and hundreds of other organizations and retailers submitted a joint letter of support for the CMS proposed rule, “Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses”.

“We urge the administration to finalize the proposed changes to the ‘negotiated price’ definition … that seeks to include all pharmacy price concessions at the point of sale, while excluding additional positive contingent amounts,” write the pharmacy stakeholder groups, including the American Pharmacists Association, Hannaford Pharmacy, Walgreens, and Hy-Vee, in the letter. “This change would effectively eliminate retroactive pharmacy price concessions, which have a demonstrably negative impact on patients and pharmacies, and ensure all fees are charged at point of sale. As you noted in the proposed rule, post-point-of-sale pharmacy price concessions, net of all pharmacy incentive payments, grew an extraordinary 45,000 percent between 2010 and 2017.”

“NCPA had asked CMS to include all pharmacy price concessions at the point of sale - or, ideally, eliminate pharmacy DIR altogether,”said B. Douglas Hoey, RPh, CEO of NCPA. “This proposed rule is evidence that we are being heard, and we applaud the administration for putting out this proposal to include pharmacy price concessions at the point of sale. Eliminating the retroactive application of these fees would provide much-needed predictability and stabilization to pharmacy operations and would save Part D beneficiaries billions of dollars.”

Plus, several patient advocacy organizations support the proposed rule on the premise that, if finalized, the pharmacy DIR fixes will save the average patient nearly $200 per year or more in some cases on their out-of-pocket prescription drug costs, NCPA said in a statement.

NACDS members’ experiences confirm that the abuses and harms of pharmacy DIR fees are genuine, says NACDS in a statement prior to the release of the rule. “And the situation is rapidly growing worse, as abusive pharmacy DIR fees continue to grow exponentially.”

Several letters supporting the proposed DIR fixes are also being sent by members of Congress.

“Now is the time to bring more transparency into our health care system and a reprieve to small business community pharmacies and seniors. We are grateful to the administration for recognizing this, and strongly encourage them to finalize this proposal,” Hoey said. “Community pharmacists are ready partners in this and other ongoing efforts to lower drugs costs and eliminate pharmacy DIR once and for all.”

NACDS also noted the importance of establishing appropriate quality measures. “Vital to the success of these reforms will be the development and establishment of a Medicare Part D: Pharmacy Quality Incentive Program that is built on a standard set of pharmacy performance metrics that drive better health outcomes and reduce the total cost of care.”