DIR reform act gains praise from FMI

The Pharmacy DIR Reform to Reduce Senior Drug Costs Act, has been introduced by the House and is expected to be introduced on Thursday by the Senate, to amend title XVIII of the Social Security Act to reform requirements with respect to direct and indirect remuneration, or DIR, under Medicare Part D, and for other purposes.

Specifically, the law would require pharmacy-negotiated price concessions, payment, and fees, to be included in negotiated prices at the point-of-sale under Part D of the Medicare Program.

The bipartisan bill was introduced in the House, by Congressman Peter Welch, D-Vt. and will be introduced in the Senate by Senator Jon Tester, D-Mont.

The Food Industry Association applauded the introduction of the legislation, noting that this important legislation would work to address the lack of transparency and fairness in hidden “clawback” fees charged by drug middlemen that are shuttering pharmacies and costing patients more at the pharmacy counter.

“Supermarket pharmacies are proud to serve as health and well-being destinations, providing customers with the full range of pharmacy products and services – including COVID-19 vaccines – at the same location where they already purchase nutritious food and other household essentials,” said FMI president and CEO Leslie Sarasin.
 

Sarasin continued, “Despite their essential role in serving communities, however, supermarket pharmacies are struggling to stay in business due to the anticompetitive practices of PBMs, of which the clawback of DIR fees is perhaps the most egregious and damaging. In fact, nearly one-third of our members rank pharmacy DIR fees as having among the most negative effect on their sales and profits (U.S. Food Retailing Industry Speaks, 2020). As a result, some FMI members have shuttered or sold their pharmacies while others are considering having to do so in the future, leading to significantly reduced access for consumers.

“Health plans and their PBMs attribute the excessive growth of DIR fees to pharmacy performance assessments, but the assessments and metrics lack transparency, are arbitrary, and have no oversight – all areas this legislation attempts to address,” she said. “By putting a stop to the predatory practice of imposing fees on pharmacies long after the point of sale while charging patients more up front for their drugs, this legislation would generate savings and create pricing transparency for both pharmacies and their patients. FMI thanks the bill sponsors for their leadership and looks forward to working with them to advance this legislation.”