Colorful pills on top of money.

Organizations make push for pharmacy DIR reform

In a letter to Congress, 249 organizations made the case for how pharmacy direct and indirect remuneration, or DIR fees, affect seniors and pharmacies.
Sandra Levy
Senior Editor
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Hundreds of organizations representing community pharmacies, grocery store pharmacies, specialty pharmacies, chain pharmacies, patient groups, buying groups, health systems, wholesalers and business groups are making an all-out push for legislation that would stop the abuse of pharmacy price concessions charged by third-party middlemen, which have increased 91,500% in recent years.

The Pharmacy DIR Reform to Reduce Senior Drug Costs Act (S. 1909 / H.R. 3554) was introduced in the Senate by Sens. Jon Tester (D-Mont.) and Shelley Moore Capito (R-W.Va.) and in the House by Reps. Peter Welch (D-Vt.) and Morgan Griffith (R-Va.).

In a letter to Congress signed by 249 organizations, they explained how pharmacy direct and indirect remuneration, or DIR fees, affect seniors and pharmacies:

“These fees, which lead to higher costs for beneficiaries at the pharmacy counter, impose ever‐increasing challenges on struggling seniors, putting them at risk for reduced medication adherence and poorer health outcomes. These fees also make it harder for pharmacies to continue operating and providing seniors and special needs populations with the medications and services they desperately need. Many pharmacies have closed over the past few years and have cited DIR fees as a primary cause. These pharmacy closures reduce access to vital healthcare services; especially in rural and underserved areas where healthcare options are already limited.

“Pharmacy DIR fee reform is urgently needed. CMS has stated that eliminating retroactive pharmacy DIR fees will save beneficiaries an estimated $7.1-$9.2 billion in reduced cost sharing. This common-sense, bipartisan legislation would reduce beneficiary cost-sharing on drugs and eliminate the plans/PBMs clawing back fees from pharmacies, providing increased price transparency for patients and pharmacies. Importantly, this legislation would establish a new pharmacy performance system based on standardized, evidence-based measures to reward and improve quality of care provided by pharmacies.

"Today, billions of dollars in pharmacy DIR fees are assessed weeks, and sometimes months, after the point of sale. These fees significantly drive up out-of-pocket costs for seniors and other patients, doing nothing to improve health care. As fees have increased sharply in recent years, they have contributed to pharmacies shutting their doors.

"The importance of pharmacies as part of the national healthcare infrastructure has never been more important. According to a recent federal report, retail pharmacies have delivered more than 80 million doses of COVID-19 vaccine in the last five months. Without DIR reform, many pharmacies will disappear, say the leaders, and millions of Americans will lose access to healthcare providers just when the need is greatest."

Commenting on release of the letters, the National Association of Chain Drug Stores president and CEO Steve Anderson said, "NACDS appreciates the strong support of these 249 groups for DIR fee reform. This legislation is sorely needed to help reduce seniors' out-of-pocket drug costs and to preserve pharmacies' viability. This week alone, NACDS members also have sent nearly 9,000 letters to more than 90% of the U.S. Congress on this issue. The message is clear: solutions are needed to fix this dire situation for patients and for the pharmacies that serve them."

Several members of the coalition gathered at Grubb’s Pharmacy, a locally owned store in Washington, D.C., just a short walk from the Capitol, before presenting the stakeholder letter of support to bill sponsors. Among them were the National Association of Chain Drug Stores, the National Community Pharmacists Association, FMI – The Food Industry Association, the American Pharmacists Association, the National Grocers Association and the National Association of Specialty Pharmacy.

Click here for the Senate letter.

Click here for the House letter.