NASP Strikes Back at DIR Fee Study Claiming Cost Savings for Medicare

National Association of Specialty Pharmacy states that direct and indirect remuneration fees increase drug costs for seniors.

The Executive Director of the National Association of Specialty Pharmacy (NASP) Sheila Arquette recently issued a statement that counters a newly-released report regarding direct and indirect remuneration (DIR) fees.

The Pharmaceutical Care Management Association (PCMA) commissioned Milliman to write the report, which gives an overview of how DIR fees may be beneficial to the federal government, despite the severe scrutiny the topic has received.

The report suggests that price concessions negotiated by PBMs that are reported as DIR fees stand to save the federal government $48.7 billion in Medicare Part D drug spending over the next decade. The PCMA also stated that DIR fees have saved $87.8 billion through 2016 and will reach $308.2 billion by 2026.

Review our full coverage of the DIR fee report.

However, several pharmacy advocate groups, including the National Community Pharmacists Association and NASP, believe that the benefits of DIR fees outlined in the report are untrue. Both groups have previously stated that the fees pose harms to pharmacies and patients alike.

“The answer is simple: DIR fees collected from specialty pharmacies are neither beneficial to the taxpayer-funded Medicare Part D program, nor to the sick seniors enrolled in the vital safety net program,” Arquette said in a news release.

The report accounted for both rebates and fees retroactively collected from pharmacies, stating that a majority of DIR fees are related to rebates; however, DIR fees for specialty pharmacies continue to increase drug costs for seniors, according to NASP.

Furthermore, NASP said that PBMs use strategies to increase reimbursement and patient costs, but then take a large portion back from pharmacies after the point-of-sale, resulting in seniors paying more than they should and pharmacies filling drugs below their cost.

This practice is said to cause seniors to enter the coverage “donut hole” faster and pay more for their drugs out-of-pocket. After the patients reach catastrophic coverage, 80% of the drug costs are paid for by the government through taxpayer dollars.

“That’s why we’re advocating to keep the point-of-sale negotiated drug prices as transparent as possible, so sick seniors can choose between one drug versus another based on the understanding of the actual out-of-pocket cost to them, in addition to the Medicare program,” Arquette wrote.

DIR fees especially affect specialty pharmacies because the performance measures used are typically not applicable, which results in higher fees being charged, according to NASP.

NASP also advocates for increasing transparency among PBMs to ensure that savings are passed back to patients.

“Increasing transparency within big PBMs would benefit the industry and the patients we serve, helping us to finally institute clear metrics and incentives that would be aligned with the services and patient outcomes that specialty pharmacy provides, and which also align with the foundational goals of the Medicare Part D program: quality, cost effectiveness, and patient satisfaction,” NASP said in the release.

NASP added that the new study is a way that PBMs and their advocacy groups are trying to validate practices that result in high out-of-pocket spending for seniors and harm the specialty pharmacies that serve them.

“To continue providing much-needed, high-quality, white-glove care for sick seniors enrolled in Medicare, specialty pharmacies need a fair reimbursement structure for the drugs and services we provide,” Arquette concluded.

Click to read an interview with NASP President Rebecca Shanahan, JD, on DIR fees.