Based on insights from member pharmacies that serve as the front lines of healthcare delivery, the National Association of Chain Drug Stores (NACDS) has submitted extensive and thoroughly documented comments to the Centers for Medicare & Medicaid Services in support of the agency’s proposal to reform direct and indirect remuneration (DIR) fees – reform that relates directly to reducing patients’ out-of-pocket drug costs.


  • NACDS’ comments respond to a CMS proposed rule released in November 2018.
  • DIR fees are being misused by payers to claw back reimbursement paid to pharmacies for prescriptions filled for Medicare beneficiaries.
  • Payers penalize pharmacies for alleged failure to reach benchmarks – many of which are vague, undefined, inconsistent, unachievable or outside of the control of pharmacies.
  • Interpretations of specific terms used in Medicare have led to these claw-backs, to higher out-of-pocket drug costs for patients, and to increased healthcare costs overall.
  • NACDS describes: the harm of current DIR practices; support for DIR fee reform and for a properly-aligned pharmacy quality incentive program; ways that reform would reduce patients’ out-of-pocket drug costs and overall healthcare costs; and CMS’ authority to act.

“The proposed changes are consistent with several of the Administration’s priorities, including the goal to reduce prescription drug costs for patients; improve the Medicare program; and use ‘[Department of Health and Human Services] programs to build a value-driven healthcare system. We therefore strongly urge CMS to use its current authority to further update the Part D Program by implementing these much-needed reforms in the final rule…NACDS members’ experiences confirm that the abuses and harms of pharmacy DIR fees are genuine. And the situation is rapidly growing worse, as abusive pharmacy DIR fees continue to grow exponentially. Pharmacies are calling on CMS to eliminate these and other harms now, by implementing reforms to eliminate pharmacy DIR fees.”

– NACDS’ comments to CMS