NASP President Speaks About PBM Regulation and DIR Fees

Once an attempt to identify proper Medicare reimbursement, direct and indirect remuneration (DIR) fees have gone on to have a harmful impact on specialty pharmacies and their patients, according to specialty stakeholders. Since these fees are charged after the point of sale by pharmacy benefit managers (PBMs), pharmacies may be filling prescriptions well below cost. This practice has been said to harm specialty pharmacies and their patients, who are facing complex illnesses.

PBMs and DIR fees have become the target of state legislation around transparency, with lawmakers attempting to increase regulation and protect patients.

The National Association of Specialty Pharmacy (NASP) has taken action against DIR fees, citing that many pharmacies and patients are negatively impacted by DIR fees. Regulating the industry may be a necessary approach to reducing the impact of DIR fees.

In part 3 of this 3-part interview with Specialty Pharmacy Times, Rebecca Shanahan, JD, chief executive officer of Avella Specialty and president of NASP, speaks about how PBM regulation may affect specialty pharmacy.

Review part 1 of the interview.

Review part 2 of the interview.

SPT: How could proposed transparency legislation related to DIR fees affect PBM operations?

Shanahan: NASP’s efforts are squarely focused on 2 things: first, fostering a true understanding around the cost savings that PBMs claim they are achieving; then understanding exactly what PBMs are doing with those savings. Legislation to boost transparency would be a step in the right direction to solve a lot of problems related to high prescription medication costs.

Specialty pharmacies and the seniors we treat need PBMs to demonstrate, in a way that is much more transparent, how they calculate reimbursement for specialty services and care. If PBMs had done that from the get go, they wouldn't be seeing states introducing legislation to require more transparency.

Big PBMs are really acting like a public utility, because they are—particularly with respect to Medicare—managing access to pharmacy benefits, controlling access to medications by their management of the drug formulary, and managing access to a pharmacy benefit that's provided by government payers. Any public utility must be transparent, and PBMs have not been transparent enough.

SPT: How would increasing regulations on PBMs benefit specialty pharmacies and their patients?

Shanahan: Increasing transparency within big PBMs would benefit the industry and the patients we serve, because we could finally institute clear metrics and incentives that would be aligned with the services and patient outcomes that specialty pharmacy provides.

More transparency would assure that sick seniors have access to the healthcare they need, including the comprehensive services that are provided by a specialty pharmacy to patients with very complex, life-altering or life-threatening diseases, who need help navigating the complicated healthcare delivery system.

By requiring more transparency from big PBMs, we can protect patient choices and ensure access to specialty pharmacy. We know specialty pharmacy produces better outcomes for patients by treating them with prescription medications for the least amount of time required, while maximizing clinical outcome. Basically, specialty pharmacies help patients to be more successful on therapy by getting them on the right dose of the right drug at the right time.

SPT: Would legislation to boost transparency result in lower drug costs for patients?

Shanahan: We know that enhancing transparency would lower prescription medication costs for sick patients. Hepatitis C drugs are a good example, as they can cost anywhere from $40,000 to over $75,000 for a course of treatment.

When a patient’s course of treatment is managed by a specialty pharmacy, they demonstrate increased adherence to and persistency with the prescribed treatment regimen, despite adverse side effects related to the drugs. Specialty pharmacies are in a unique position to mitigate costs by reducing treatment duration for appropriate patients and ensuring no excessive fills beyond 12 weeks, unless clinically appropriate. This shows that when patients are provided with the appropriate support from specialty pharmacy, they can save significantly, while receiving the right drug, in the right dose, at the right time.

Studies have been undertaken by both PBMs and specialty pharmacies around certain disease categories, and avoidance of hospitalization or shortening the length of hospitalization if patients must be admitted to the hospital to be treated for the duration of a disease. There are several ways to lower the cost of prescription medications by virtue of how patients are managed and by whom they are managed.

To continue providing much-needed, high-quality, white-glove care for sick seniors enrolled in Medicare, specialty pharmacies need to be fairly reimbursed for the drugs and services we provide. That requires more transparency from PBMs.

CMS should exercise its regulatory authority by overseeing its contracted entities — PBMs – to ensure compliance with statutes, regulations and guidance. On the legislative side, NASP has proposed language to reinforce Medicare’s Any Willing Provider law. Our proposed language basically restates that PBMs should do what CMS has already said they should do, which is not provide substandard reimbursement for specialty drugs and services. We have also proposed legislative language to establish an independent third party responsible for setting specialty pharmacy standards.

SPT: The Centers for Medicare and Medicaid Services recently proposed reporting requirements related to DIR fees. How will the requirements for DIR fees impact specialty pharmacies?

Shanahan: Specialty pharmacy is very comfortable with reporting data about outcomes related to our patients. We do it all the time... as a part of our accreditation process; in our day-to-day operations; and oftentimes in conjunction with manufacturers that require reporting, either because of a FDA-mandated REMS program or because of other reporting requirements.

We are very confident in our ability to provide strong information about the work that we do and the outcomes we deliver for our patients. We’d love to see CMS require big PBMs to share more of the information they collect, as well. If DIR fees are really providing cost savings for sick seniors enrolled in Medicare like the big PBMs claim, we’d like to see some proof. And NASP is not alone. There is growing concern over increasing prescription drug costs, and we need everyone to come to the table with as much information, data and details as possible to have an open, honest and transparent conversation. That’s the only way we can work together to find real solutions for sick seniors nationwide.

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