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NACDS urges adoption of DIR reform

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ARLINGTON, Va. – In a statement to the Senate Finance Committee Thursday, the National Association of Chain Drug Stores stressed the importance of finalizing Health and Human Services (HHS) secretary Alex Azar’s proposals to reform pharmacy direct and indirect remuneration (DIR) fees, and of developing a standardized pharmacy quality incentive program.

Alex Azar

“The FY2020 HHS Budget Request notes steps the department took in the past year aimed at lowering the cost of prescription drugs, including ensuring beneficiaries are benefiting from price concessions at the pharmacy counter,” NACDS wrote. “We urge HHS to continue these actions in FY2020 by finalizing provisions in the November 2018 Centers for Medicare and Medicaid Services (CMS) proposed rule ‘Modernizing Part D and Medicare Advantage to Lower Prices and Reduce Out-of-Pocket Expenses’ that would increase competition in the Medicare Part D program and lower beneficiary out-of-pocket costs by reforming pharmacy [DIR] fees. CMS has proposed to reform pharmacy DIR by requiring that pharmacy price concessions are passed on to patients.”

NACDS also emphasized, “Finalizing pharmacy DIR reform needs to be coupled with the development of standardized pharmacy quality metrics and a pharmacy quality incentive program.” NACDS’ statement reflects its comments submitted to CMS in January regarding the proposed rule. DIR fees are based on a regulatory loophole that plans have exploited to increase beneficiary drug costs. The fees are being misused by payers to claw back reimbursement to pharmacies for the prescription drugs that they provide to Medicare beneficiaries. For example, payers impose penalties for pharmacies’ alleged failure to achieve certain benchmarks — many of which are vague, undefined, inconsistent, unachievable or outside of the control of pharmacies. Interpretations of specific terms that are used in the Medicare program related to pharmacy reimbursement and drug pricing have led to these clawbacks, and ultimately to higher out-of-pocket drug costs for patients and increased costs for the government.

In February nearly one-third of the Senate signed a bipartisan letter, led by Sens. Shelley Moore Capito (R. W. Va.) and Jon Tester (D., Mont.), that urged Azar to advance his DIR fee reform proposals. The senators wrote, “We believe the policy outlined in the proposed rule would provide needed relief from the impact of pharmacy DIR fees have had on patients’ out-of-pocket costs and community pharmacies.”

In addition to emphasizing DIR fee reform, NACDS’ statement:

• Articulated strategies for further addressing the opioid abuse epidemic

• Indicated a continued commitment to work with CMS on the implementation of the gag-clause prevention law enacted in October 2018 – which prevents plans from restricting pharmacists from information patients of specific ways to save money on prescription drugs

• Urged approaches that will simultaneously reduce prescription-drug costs while also ensuring access to needed prescription drugs for Medicare beneficiaries.

• Asked for congressional support for HHS’ adoption of provisions that allow prescribers to make coverage determinations and access cost information at the point of prescribing.

• Expressed support for efforts of HHS and CMS to integrate a patient-specific real-time benefit tool into the Part D benefit to drive lower prescription drug spending and minimize beneficiary out-of-pocket costs.


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