NCPA letter asks Trump to eliminate DIR fees

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NCPA letter asks Trump to eliminate DIR fees

By Sandra Levy - 07/22/2020

National Community Pharmacists Association CEO Doug Hoey in a letter to President Trump is urging that as part of any efforts on drug pricing, the administration must eliminate direct and indirect remuneration, or DIR, fees. Hoey said DIR fees play a role in increased out-of-pocket costs for patients and impact pharmacies' bottom lines. 

"Pharmacy DIR fees increase prescription drug costs. Period. They are not only bad for seniors but are also detrimental to taxpayers and neighborhood pharmacies," Hoey said. "If policymakers were to change the current policy and end the secretive rebate game without also reforming pharmacy DIR, there is no doubt in my mind that PBMs will maneuver to leverage even more DIR fees to make up the difference."

In the letter, Hoey notes that any administration efforts administration efforts on drug pricing must include pharmacy DIR fee reform, in order to be effective. 

Hoey’s letter follows reports that the administration may soon issue executive orders dealing with drug costs, potentially seeking to end the safe harbor protections for rebates paid by manufacturers to the PBMs owned by large insurance companies. NCPA had reservations about the administration’s previous rebate proposal, because pharmacy DIR fee reform is needed to prevent PBMs from utilizing other forms of remuneration to make up for loss of revenue on the rebates, according to NCPA.

Hoey pointed out that according to the Centers for Medicare and Medicaid Services, DIR fees increase by 45,000% between 2010 to 2017. An additional analysis released by XIL Consulting found that “DIR pharmacy fees overall have skyrocketed by 1,600% in the last five years, totaling $8.5 billion since 2013.”

“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. 

Hoey cited a recent study in JAMA Network Open showing that older Americans visit community pharmacies almost twice as frequently as their primary care doctors. According to the research, patients visit local pharmacies 13 times per year, on average, compared wit seven annual doctor visits.

“Community pharmacies are the most accessible health care providers in the country, and DIR fees are shutting them down. The administration must fix this problem before it is too late,” said Hoey.

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