NCPA leads call for more DIR fee transparency

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ALEXANDRIA, Va. — The National Community Pharmacists Association has joined with a group of pharmacy industry stakeholders in calling for more clarity about direct and indirect (DIR) fees.


B. Douglas Hoey

NCPA said that this week it teamed up with 21 other organizations — including drug chains, drug suppliers, drug cooperatives and pharmacy associations, among others — in sending a letter to the Centers for Medicare & Medicaid Services (CMS) in support of proposed guidance that would provide greater transparency into DIR fees. The letter also included recommendation on how DIR fees should be reported as CMS gets set to close the fiscal books on the 2015 plan year.

Specifically, the guidance would require Part D plan sponsors or pharmacy benefit managers (PBMs) to report funds they receive from manufacturers separately from the money they receive from pharmacies. NCPA said that such a requirement would give CMS additional clarity into the amounts of money being assessed on pharmacies.

“DIR fees are confusing and misleading to pharmacies and beneficiaries alike,” NCPA chief executive officer B. Douglas Hoey said in a statement. “NCPA and others have long advocated for transparency around the fees. We commend CMS for its proposed guidance, as it will provide greater insight into the different types of DIR fees and their sheer magnitude”

The pharmacy organizations made three key recommendations. They proposed that CMS require plan sponsors to provide specific information on pharmacy fees and payments and what they represent, as well as to explain why they can’t be reasonably estimated in advance. In addition, they suggested that CMS give plan sponsors additional examples of the kinds of fees they should report, considering the volume and variety of names that the industry uses to describe such fees or payments.

And finally, they called for the creation of an additional, separate reporting field to address the differences between the reimbursement rate initially indicated to a pharmacy at the point-of-sale and the “contracted” or “effective” reimbursement rate after fees or payments are applied.

“We encourage the agency to consider the recommendations we’ve offered for the 2015 plan year and to implement its previously proposed guidance for plan years 2016 and beyond,” Hoey added.

Besides NCPA, the letter was signed by the Academy of Independent Pharmacy (Georgia), American Pharmacy Cooperative, Astrup Drug, Burlington Drug Co., Care Pharmacies Cooperative, Elevate Provider Network, Federation of Pharmacy Networks, Georgia Pharmacy Association, Independent Pharmacy Cooperative, Keystone Pharmacy Purchasing Alliance, Louisiana Independent Pharmacies Association, National Alliance of State Pharmacy Associations (NASPA), Northeast Pharmacy Service Corporation, PBA Health, Pharmacy Productions Inc. (dba QualityCare Pharmacies), Philadelphia Association of Retail Druggists, PPOK RxSelect Pharmacy Network, Rochester Drug Cooperative, RxPlus Pharmacies, Smart-Fill Management Group and the Southern Pharmacy Cooperative.

The letter also reiterated the importance for CMS to finalize its proposed guidance that would fully implement the new definition of “negotiated price” in Medicare Part D. NCPA said that definition would ensure more consistent reporting from plan sponsors regarding DIR fees going forward. The association noted that the guidance has received bipartisan support from members of Congress, as shown in an October 2015 letter to CMS from 11 U.S. lawmakers.



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