NCPA backs bill cracking down on DIR fees

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ALEXANDRIA, Va. — The National Community Pharmacists Association has endorsed new legislation designed to raise transparency and accuracy in Medicare Part D prescription drug spending and reporting.

NCPA said the bill, the Improving Transparency and Accuracy in Medicare Part D Spending Act (H.R. 5951), introduced Thursday, also would ban so-called direct and indirect remuneration (DIR) fees applied retroactively. The legislation is sponsored by Reps. Morgan Griffith (R., Va.), Peter Welch (D., Vt.), Lou Barletta (R., Pa.), Rod Blum (R., Iowa), Earl “Buddy” Carter (R., Ga.), Rick Crawford (R., Ark.), Walter Jones (R., N.C.), Cathy McMorris Rodgers (R., Wash.) and Pete Sessions (R., Texas).


B. Douglas Hoey

“Independent community pharmacists are on the front lines helping Medicare beneficiaries access their prescription drugs and get the maximum benefit out of using them properly,” NCPA chief executive officer B. Douglas Hoey said in a statement. “Unfortunately, their efforts are greatly undermined by the imposition of huge retroactive fees by PBM corporations that further complicate Medicare drug costs,”

NCPA said that DIR fees, huge clawbacks assessed by Medicare drug plans and pharmacy benefit managers often long after prescriptions are filled, has become a top concern of independent community pharmacies. H.R. 5951 would prohibit the imposition of such fees after pharmacies fill prescriptions.

In a recent NCPA survey of 640 community pharmacists, 67% of pharmacists said they receive no information about when DIR fees will be collected or their size. Many said DIR fees can total thousands of dollars each month and make it impossible to determine at the time of dispensing whether the net reimbursement will cover their costs, such as purchasing drugs.

“NCPA staff and members have delivered that message to Congress and Medicare repeatedly to raise awareness of the need for action,” Hoey stated. “We commend Reps. Griffith, Welch and their colleagues on introducing this commonsense legislation to increase transparency in Medicare drug spending.”

Congressional concern about the DIR fee issue has mounted, according to NCPA. Eighteen senators and 30 representatives have written to the Centers for Medicare & Medicaid Services (CMS) calling on the agency to implement proposed guidance to address pharmacy price concessions such as DIR fees. CMS has noted “variations in the treatment of costs and price concessions affect beneficiary cost sharing, CMS payments to plans, federal reinsurance and low income cost-sharing (LICS) subsidies, manufacturer coverage gap discount payments, and plan bids,” NCPA reported.

DIR fees not accounted for up front boost drug costs at the pharmacy counter and, in turn, hike beneficiary cost sharing, NCPA said. As a result, beneficiaries reach the coverage gap sooner and face increased co-insurance, which now applies to 58 percent of covered drugs, according to Avalere. DIR fees not accounted for up front also lead to inaccurate prices on Medicare Plan Finder, the association said.

In addition, H.R. 5951 wouldn’t increase Part D costs or prohibit pay-for-performance incentives in categories such as patient adherence to medication and avoidance of dangerous and costly drug interactions, NCPA reported.

“Increasingly policymakers and the general public are calling for more transparency into prescription drug costs,” Hoey added. “However, with the major escalation in DIR fees, PBM corporations are heading in exactly the opposite direction.”



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