PBMs: DIR Fees Reduce Costs for Consumers
PCMA states that direct and indirect remuneration fees are mischaracterized.
It is no secret that pharmacy benefit managers (PBMs) have recently been scrutinized for direct and indirect remuneration (DIR) fees. However, PBMs and advocacy groups believe that misinformation is being spread by opposition groups.
DIR fees are charged to pharmacies after a transaction is completed, and are designed to ensure the pharmacy operates within certain standards.
PBMs are facing criticism over DIR fees due to 2 recently published reports regarding the topic. A study by the Community Oncology Alliance alleged that PBMs charge these fees to reap profits from pharmacies to maximize profits, while potentially inflicting patient harm through increased cost-sharing.
However, this may not be the whole story. Since the perspective of PBMs has not been discussed at length, many individuals who have read the reports may have misconceptions about DIR fees.
The Pharmaceutical Care Management Association (PCMA) is a support organization that advocates for PBMs and the cost-saving tools and techniques they use to improve healthcare. This organization has made it their mission to ensure that the public is fully informed about how PBMs work, and the positive impact they can have on the healthcare industry.
PCMA told The American Journal of Pharmacy Benefits in an interview that DIR fees are not harmful, which is how the recent reports have painted them to be.
“They don’t harm the health industry in any way. They only help it,” PCMA President and CEO Mark Merritt told AJPB. “It reduces costs for consumers and for Medicare. The reason people attack DIR is they sign a contract to pay for it, and then they don’t want to hold up their end of the bargain. The reality is payers are going to demand discounts, concession, and rebates to reduce costs to pass those savings along to consumers.”
PBMs and their advocates argue that DIR fees actually help patients save money on premiums and out-of-pocket costs, since PBMs are able to negotiate lower drug costs.
CVS Health, a PBM that covers thousands of patients, released a statement that said DIR fees ensure pharmacies are performing well and serving patients properly. They also said that their profit margins would remain unchanged if DIR fees were stopped, which reinforces the notion that PBMs are not gaining much from these fees.
In an effort to combat the misinformation presented by these reports, PCMA developed drugbenefitsolutions.com to explain how drug pricing works.
“It’s part of a broader effort for us to counter the misinformation out there that special interest groups have been pushing to reduce their own costs, and increase their own profits,” Merritt said in the interview.
While the general public may not know about, or understand DIR fees, it is important that PBMs and advocacy groups tell their side of the story on why DIR fees are necessary.
“Those who know what they [DIR fees] really are understand that they save money for consumers, but sometimes people who have to pay these discounts and rebates don’t want to pay them because they reduce their profit margin -- that’s why they’re fighting them,” Merritt concluded.