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NCPA files lawsuit against HHS to eliminate pharmacy DIR fees

Sandra Levy
Senior Editor
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The National Community Pharmacists Association has filed a federal lawsuit against the Department of Health and Human Services regulations, alleging that direct and indirect remuneration, or DIR, fees are without reasonable transparency and they conceal the true cost of prescription drugs.

“Pharmacy clawbacks are fundamentally dishonest and unfair for patients and pharmacies, and they make it impossible for pharmacies to predict their costs,” said NCPA CEO Doug Hoey. He also said that 60% of community pharmacies believe they may go out of business in the next two years if the clawbacks are not addressed.

"That’s not just a threat to community pharmacies but also to the millions of patients who rely on them, whether during a public health emergency or otherwise. This is about fairness for community pharmacies and access for their patients,” Hoey said. "NCPA and others have pursued a fix through the regulatory and legislative processes for years. We have exhausted those options and unfortunately, small business independent pharmacies cannot wait any longer,” Hoey said.

The case, NCPA versus Azar, was filed in the U.S. District Court for the District of Columbia. In its complaint, NCPA argues that a rule allowing price concessions to be imposed on pharmacies long after the point of sale violates the language and intent of the Medicare Act. The lawsuit addresses an exception included in a Centers for Medicare & Medicaid Services rule that states all negotiated prices must include price concessions from network pharmacies, except those contingent price concessions that cannot reasonably be determined at the point of sale.

A recent study analysis from XIL Consulting cited in the complaint showed that pharmacy DIR fees have increased 1,600% since 2015, with $4 billion in DIR fees being squeezed from pharmacies in 2017 alone. Furthermore, the exception was inserted into the final rule without providing notice to interested parties or letting them comment. That, NCPA claims, violated the legal process for proper rulemaking.