Pharmacy DIR Fee Loophole Must Close NACDS RxIMPACT Urges

Arlington, Va. – The NACDS RxIMPACT program has launched an Action Alert, urging Congress to provide “DIR fee” relief in time to save pharmacies and to reduce seniors’ out-of-pocket drug costs.

Through NACDS RxIMPACT, pharmacy advocates are contacting U.S. Senators and members of the U.S. House of Representatives to build support for the Phair Pricing Act (H.R. 1034/S. 640). The bill would do what a recent Medicare rule left undone: providing relief from abusive pharmacy direct and indirect remuneration (DIR) fees. The goal is to assure this is part of a drug-pricing bill that is enacted soon.

Congress’ Solution

U.S. Sens. John Kennedy (R-LA), Jon Tester (D-MT), and Shelley Moore Capito (R-WV) are the lead sponsors of the Senate bill. U.S. Reps. Doug Collins (R-GA) and Vicente Gonzalez (D-TX) are sponsors of the House bill.

“If our government is serious about stopping this unacceptable treatment of pharmacies, about reducing patients’ drug costs at the pharmacy counter, and about reducing overall healthcare costs, then they need to close this loophole and end the abuses of pharmacy DIR fees now,” said NACDS President & CEO Steven C. Anderson, IOM, CAE.

“A solid proposal was put forward in the Medicare proposed rule for plan year 2020, and then it was not included in the final rule to the shock of many members of Congress. Through NACDS RxIMPACT, our message to Congress is simple: pharmacies and our patients are counting on you to take the action that is needed right away.”

DIR Fees Explained

Pharmacy DIR fees occur when health plans and pharmacy benefit managers (PBMs) exploit a loophole and claw back reimbursement paid to a pharmacy for Medicare prescriptions. These claw-backs often occur months after a drug is dispensed, and they can result in devastating below-cost reimbursement to pharmacies. It also leads to higher cost-sharing for patients. That is because cost-sharing is supposed to be based on a drug’s cost, which is artificially inflated when claw-backs are not figured in.

DIR Fees’ Impact

The Centers for Medicare & Medicaid Services (CMS) said in its November 2018 proposed rule that pharmacy DIR fees grew 45,000 percent between 2010 and 2017. CMS also said that DIR relief would reduce patients’ drug costs by $7.1 to $9.2 billion over 10 years.

The NACDS Access Agenda website includes resources helpful for explaining this issue and its critical importance to patients and to pharmacies.