NCPA Letter to Trump Urges for DIR Reform to Lower Drug Prices

July 23, 2020

In a letter to President Trump, NCPA CEO explained that failure to implement sweeping DIR fee reform would be detrimental to independent community pharmacies and their patients.

The National Community Pharmacists Association (NCPA) pressured the Trump administration to eliminate pharmacy direct and indirect renumeration (DIR) fees that inflate drug costs for seniors and negatively impact independent community pharmacies.1

In a letter to president Trump, NCPA CEO B. Douglas Hoey explained that the viability of independent community pharmacies, especially given the amplified instability of pharmacies amid the novel coronavirus disease 2019 (COVID-19) pandemic, depends on DIR reform.2

In a NCPA press release, Hoey highlighted that pharmacy DIR fees are a secretive strategy by prescription drug management divisions (PBMs) to “raise prescription prices on seniors at the pharmacy counter.”1

But DIR fees not only hit seniors hard, according to Hoey. They are “also detrimental to taxpayers and neighborhood pharmacies,” he said.1

The letter to Trump presented NCPA’s reach across the nation, as the association represents the United States’ 21,000 independent community pharmacies, representing a $76 billion health care marketplace and 250,000 employees who provide pharmacy services to millions of patients each day.2

Hoey cited media reports warning that drug pricing may be addressed with executive orders from the Trump administration seeking to nix the safe harbor protections for rebates paid by manufacturers to the PBMs owned by large insurance companies. 1,2 NCPA therefore stressed the necessity of DIR fee reform in effectively lowering prescription costs and protecting independent community pharmacies, which serve some of the nation’s most vulnerable populations on the basis of health care access.1,2 

Systemic change supporting small business pharmacies amid the pandemic is critical; NCPA outlined the following minimum requirements if rebates are to be effectively eliminated:2

  • Fix pharmacy DIR fees
  • Secure timeliness of reimbursement payments for drug products through Medicare Part D protections
  • Solidify transparency of total and final reimbursement and chargeback amounts due at the point of sale, as well as receive claim-level detail that substantiate the total and final reimbursement of payer amounts and chargeback amounts
  • Secure financial viability, meaning that independent community pharmacies should not be liable for cost of implementing a system in response to the proposed rebate rule
  • Implement appropriate and effective agency oversight of a system contemplated by the proposed rebate rule
  • Safeguard small business protections, such as the right to appeal, inquire about missing payments, utilize audit processes, and engage in dispute resolution
  • Offer the opportunity for independent community pharmacies to choose business partners, where independent community pharmacies are offered the autonomy to engage in business with any treading partners in the supply, billing, or reconciliation chain in a new system contemplated by this proposed rebate rule

Though failure to implement sweeping DIR reform and independent community pharmacy protections would no doubt be detrimental to the viability of these pharmacies, NCPA also clarified that, in the end, it will be the patient who would be hurt the most.1

“Independent pharmacies cannot withstand these increases. Seniors can’t afford to continue paying higher prescription prices at the pharmacy counter that wind up padding the pockets of large insurance companies,” Hoey said.1 “The PBMs are using the fees to drive community pharmacies out of businesses and patients will suffer most.”

References

  1. NCPA CEO to Trump: Fix DIR Fees to Lower Drug Costs. News Release. NCPA; July 22, 2020. Accessed July 23, 2020. https://ncpa.org/newsroom/news-releases/2020/07/22/ncpa-ceo-trump-fix-dir-fees-lower-drug-costs.
  2. Hoey BD. Letter to President Trump. July 21, 2020. Accessed July 23, 2020. https://ncpa.org/sites/default/files/2020-07/ncpa-ltr-president-trump-eo-rebate.pdf.