Alex Azar

WASHINGTON — The National Association of Chain Drug Stores and the National Community Pharmacists Association (NCPA) have praised a bipartisan Senate letter to Health and Human Services Secretary Alex Azar. The letter thanked the secretary for concepts in the Centers for Medicare and Medicaid Services’ (CMS’) proposed rule, Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses, that would reduce patients’ out-of-pocket drug costs through reform of pharmacy direct and indirect remuneration (DIR) fees in the Medicare Part D program.

Led by Sens. Shelley Moore Capito (R., W.Va.) and Jon Tester (D., Mont.) and signed by 29 senators, the letter states: “We believe the policy outlined in the proposed rule would provide needed relief from the impact pharmacy DIR fees have had on patients’ out-of-pocket costs and community ­pharmacies … This proposal would amend the definition of ‘negotiated price’ to include all pharmacy price concessions at the point of sale, which would effectively eliminate the retroactive nature of pharmacy DIR fees. Additionally, the proposal states that CMS hopes to develop a standard set of performance metrics for pharmacies, which would recognize the role and value of pharmacists in the Medicare program and would encourage plan sponsors to motivate pharmacies with after-the-fact incentive payments that can drive greater quality and patient outcomes. CMS estimates their proposal would save Medicare beneficiaries $7.1 billion to $9.2 billion in reduced cost sharing over 10 years starting as early as 2020 … We commend you and the administration on this proposal to eliminate retroactive DIR fees and provide cost savings to seniors and urge you to finalize it as quickly as possible for plan year 2020.”

The senators pointed to the staggering increase in pharmacy DIR fees on pharmacies participating in the Part D program, which have increased by “more than 45,000% between 2010 and 2017.” The senators explained that these retroactive fees, which are taken back from pharmacies months later rather than at the point of sale, cause a reimbursement uncertainty that jeopardizes pharmacies. Loopholes in the method of calculating patients’ co-payments are such that the fees inflate the patients’ financial responsibility as well.

“We are grateful to Sens. Capito and Tester — and all the senators who signed the letter — for highlighting the serious repercussions to patients and pharmacies that pharmacy DIR fees cause, and for urging Secretary Azar to finalize this reform quickly to help reduce patients’ out-of-pocket costs, improve patient health outcomes and reduce overall costs,” said NACDS president and chief executive officer Steve Anderson.

“We appreciate the senators’ support on this vital issue, which urgently needs to be resolved. The increase in pharmacy DIR fees has caused higher costs for patients, which lead to reduced medication adherence and poorer patient health outcomes,” added NCPA CEO B. Douglas Hoey. “As CMS has noted, revising the structure of these fees could result in billions of dollars in savings for patients.”

The senators concluded by urging Secretary Azar to act swiftly on pharmacy DIR reform to eliminate the retroactive nature of these fees and to pass the subsequent savings on to those who need it most — ­patients.