NASP Calls on Members to Band Together Against DIR Fees


Direct and indirect remuneration fees have inflicted harm on specialty pharmacies and the patients they treat.

Direct and indirect remuneration (DIR) fees have made headlines due to concerns that these practices inhibit access to prescription drugs for elderly Americans insured through Medicare and threaten the livelihood of specialty pharmacies that service them.

At this year’s National Association of Specialty Pharmacy (NASP) Annual Meeting and Educational Conference, Phil Hagerman, RPh, CEO, and chairman at Diplomat Specialty Pharmacy, gave a much-anticipated session on everything you need to know about DIR fees. Hagerman was joined by 4 industry experts who advocate on behalf of NASP and the specialty pharmacy industry.

“In our NASP board of directors meeting and through the surveys we put out to our members, DIR fees continue to be one of the most pressing and relevant topics,” Hagerman said.

Jason Slotnick, partner at Health Policy Strategies, reported that there are 2 tracks when looking at DIR fees: regulations and the growth of the specialty pharmacy landscape. Due to the high costs of specialty drugs and the market boom, pharmacy benefit managers (PBMs) started charging more to manage the drug benefit, which led to enormous DIR fees starting around 2015, according to the session.

NASP has been extremely active setting up meetings to educate the Centers for Medicare and Medicaid Services (CMS) about what specialty is and the value it brings. Slotnick reports that as time goes on, NASP has been meeting with more high-level players who are now understanding specialty at a deeper level. Due to the increased understanding, a recent report from the CMS noted that the growth of DIR fees has been substantial, but other aspects—such as premiums—have not been reduced as a result of high DIR fees.

Earlier this year, NASP worked to develop and implement a solution among legislators, according to Barrett Thornhill, principal at the McManus Group. To do so, NASP is making DIR fees a “household name” and demonstrating how it is tied to drug costs, a top priority of the administration.

Thus far, Thornhill said that the new administration has been more willing to work with NASP to reform policies compared with the previous administration, which may lead to more significant changes.

“Congress is focused on us for the first time,” Thornhill said. “They’re looking into what they could do to restructure Part D that would benefit patients and they want to make sure specialty pharmacies have a place in the future.”

Jonathan Levitt, founding partner at Frier Levitt, LLC, said that several members of NASP’s board of directors met with Medicare’s council about DIR fees and how it impacts specialty pharmacies and their patients. NASP also submitted comments responding to proposed changes related to DIR fees to ensure that the concerns of specialty pharmacies are being considered in legislation.

Despite the progress that has been achieved, Ed Kaleta, vice president, Federal Government Relations and US Public Policy at ‎Walgreens, said that many Congress representatives may still be unaware of what DIR fees are and what PBMs do, as a result of the complexity of the issue. Kaleta advises that when talking about DIR fees and other health care issues, reminding policymakers about the impact on patients will likely have the greatest effect.

Rather than only calling on PBMs and manufacturers to become more transparent, pharmacies must also increase their level of transparency, which may come with new challenges, according to the panel.

An overall theme from the experts was that education for policymakers, stakeholders, and all Americans is necessary to continue the fight against DIR fees and to implement necessary changes. Capturing data and how DIR fees effect patients are also crucial aspects to incite policy changes that ensure patients and pharmacies are protected from DIR fees.

Hagerman said that this is an opportunity for all specialty pharmacies to band together and unite the industry against DIR fees for the benefit of patients.

“It has to be a group and industry effort,” Hagerman said. “We, as an organization, need to have a louder voice than we ever have before.”

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