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01/10/2022

Pharmacy orgs praise Biden administration’s action on DIR fees 

The National Association of Chain Drug Stores, National Community Pharmacists Association and American Pharmacists Association commended the Biden administration for initiating action to rein in DIR fees.
Sandra Levy
Senior Editor
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The Centers for Medicare & Medicaid Services recently issued a proposed rule for Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs, which is scheduled to be published on Jan. 12, 2022, in the Federal Register. 

The National Association of Chain Drug Stores, the National Community Pharmacists Association and the American Pharmacists Association commended the Biden administration for initiating action to rein in DIR fees.

NACDS said that the proposed rule would have the practical effect of preventing the needless inflation of seniors’ out-of-pocket drug costs that results from a current regulatory loophole. This same loophole jeopardizes pharmacy viability with unpredictable and often below-cost payments from payers to pharmacies for the medications that they dispense.

[Read more: Organizations make push for pharmacy DIR fee reform]

“DIR fees have needlessly inflated seniors’ out-of-pocket drug costs and have been a bane of pharmacies’ existence — and a threat to their existence — for more than a decade. NACDS welcomes the Biden administration’s action, which is critical for retail pharmacies of all formats and sizes,” NACDS president and CEO Steve Anderson said in a statement. “We will continue to engage and we will comment formally to help make the most of this moment. We also look forward to working with the administration, with Congress and with other key stakeholders for the establishment of consistent, relevant and workable pharmacy quality measures that are essential to the success of true DIR fee reform.”

NACDS noted that the reforms proposed by CMS are estimated to reduce seniors’ costs by $21.3 billion over 10 years. CMS states pharmacy DIR fees grew more than 107,400% between 2010 and 2020.

“NACDS expresses deep appreciation to the sponsors of the Pharmacy DIR Reform to Reduce Senior Drug Costs Act (S. 1909/H.R. 3554) in this Congress — and to those who have helped lead the charge for DIR fee reform in prior Congresses,” Anderson said. “We look forward to their continued leadership and engagement throughout the regulatory process and to address any and all remaining legislative needs.”

[Read more: NCPA to CMS: Address 91,500% hike in DIR fees]

“This is an encouraging development. We are grateful to HHS secretary Becerra and CMS administrator Brooks-LaSure for this proposal. After many years and multiple administrations, this is as close as we’ve ever come to reforming pharmacy DIR fees,” the National Community Pharmacy Association CEO Douglas Hoey, said. “We look forward to working with all our partners, members, and champions in Congress to ensure the best possible rule is finalized for plan year 2023. ”

Hoey continued, “Local pharmacies are such an important part of the national health care infrastructure. Since the start of the COVID-19 pandemic, pharmacists have delivered 200 million doses of vaccine. Independent pharmacies are especially important because of their reach into some of the most vulnerable and hard-to-reach populations. Pharmacy DIR fees are forcing many pharmacies to reduce services, and others to close their doors — at a time when pharmacist services have proven they are essential to the health of the country.”

If finalized, this is a major step forward for patients and pharmacies,” said Scott Knoer, APhA executive vice president and CEO. “We appreciate CMS’ bold proposed action to lower patients’ out-of-pocket costs at the pharmacy counter, which responds to APhA’s years of advocacy to eliminate Part D plans’ and PBMs’ harmful use of retroactive DIR fees. APhA thanks CMS for listening. We will be working to ensure that CMS finalizes a rule that benefits both patients and pharmacies.

[Read More: New York Gov. Hochul signs legislation bringing regulatory structure to PBMs]

Knoer added, “Eliminating the retroactive use of DIR fees is a step in the right direction, but we must go further to end PBMs’ devastating business practices. APhA will continue to work with the administration to eliminate these harmful practices in order to advance health equity in rural and underserved communities, where the local community pharmacy may be the only health care provider for miles.”

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