Lawmakers, Pharmacy Groups Urge DIR Fee Reform Despite Exclusion from CMS Rule

The recently-finalized CMS drug pricing rule excluded direct and indirect remuneration fee reform.

With the exclusion of pharmacy direct and indirect remuneration (DIR) fee reform from the recent Centers for Medicaid and Medicare (CMS) drug pricing rule, members of Congress and pharmacy groups are urging the Trump administration to reconsider.

Most recently, members of the House of Representatives penned a bipartisan letter to President Trump expressing disappointment at the lack of DIR fee reform legislation in the ruling.1 The letter, which was signed by 105 House members, follows another sent by Senate members earlier this month expressing a similar sentiment.2

The new CMS rule, which was published in May 2019, failed to finalize DIR fee reform as included in CMS’ original proposal. The rule is intended to reduce out-of-pocket spending for enrollees at the pharmacy and other sites of care. However, in the letter, House members wrote that “finalizing this rule without including DIR fee reform is a missed opportunity to deliver real cost savings to Medicare beneficiaries.”1

They also cited CMS data indicating that DIR fees on pharmacies participating in Part D grew by 45,000% between 2010 and 2017. “This increase in unacceptable and unsustainable and creates uncertainty not only for community and specialty pharmacies but also for the patients who rely on Part D prescription drugs,” they wrote.1

According to CMS data, these reforms would have saved Medicare beneficiaries between $7.1 and $9.2 billion in cost sharing over the next decade.1

The letter echoes the one sent by 28 bipartisan members of the Senate, led by Senators Shelley Moore Capito (R-WVa) and Jon Tester (D-Mont), in early June.

As a response to the letters, the National Community Pharmacists Association (NCPA), National Association of Chain Drug Stores (NACDS), National Association of Specialty Pharmacy (NASP), American Pharmacists Association, Food Marketing Institute, National Grocers Association, National Alliance of State Pharmacy Associations, and American Society of Consultant Pharmacists issued a joint statement.

“We appreciate this strong and bipartisan demonstration that DIR fee relief is needed now, to deliver savings to patients and to the Medicare program, and for the viability of pharmacies,” they said in the statement.1 “It is essential that this powerful statement is translated into action on DIR relief this year, through Executive Branch action, through inclusion in drug-pricing legislation, or both. Reform is needed to address the gaming of the system through DIR fees, and to work toward pharmacy-specific metrics to enhance patient outcomes and appropriately evaluate pharmacy performance.”

The pharmacy organizations expressed frustration when the proposed ruling was first published. A previous statement issued by NCPA and NACDS underscored the importance of DIR regulation for pharmacies.

“Pharmacies are in a tenuous situation, and our organizations are exploring all options to accomplish desperately needed reforms to pharmacy DIR. It is necessary for community pharmacies and for the benefit of seniors that this reform take effect as soon as possible.”2

In addition, Sheila Arquette, RPh, executive director of NASP, said in an earlier statement, “CMS’s decision to turn a blind eye is a significant blow to patients seeking relief from the high out-of-pocket costs they face on drugs at the pharmacy counter and is severely out of step with the administration’s proactive and ambitious approach to confronting practices that drive up patient and government spending on drugs.”3

DIR fees can largely impact specialty pharmacies and their patients, and be especially harmful for seniors with chronic, complex diseases that are costly to treat.

Despite the setback, there will likely be continued bipartisan Congressional pressure for legislative action on the issue, as represented by the recent letters, as well as joint efforts from pharmacy organizations that continue to advocate for their businesses and patients.

References

  • 105 US Reps., 28 US Senators Urge Trump Administration to Fix Pharmacy DIR Fees [news release]. NCPA. https://www.ncpanet.org/newsroom/news-releases/2019/06/20/105-u.s.-reps.-28-u.s.-senators-urge-trump-administration-to-fix-pharmacy-dir-fees. Accessed June 24, 2019.

  • NCPA, NACDS Statement on Drug Pricing Rule’s Failure to Reform Pharmacy DIR [news release]. NCPA. https://www.ncpanet.org/newsroom/news-releases/2019/05/16/ncpa-nacds-statement-on-drug-pricing-rule-s-failure-to-reform-pharmacy-dir. Accessed June 24, 2019.

  • Final Medicare Drug Pricing Rule Fails to Lower Prices at the Pharmacy Counter [news release]. NASP. https://naspnet.org/nasp-news/. Accessed June 24, 2019.