B. Douglas Hoey

ALEXANDRIA, Va. – In comments submitted today, National Community Pharmacists Association CEO B. Douglas Hoey said independent pharmacy has strong concerns about the Centers for Medicare & Medicaid Services’ proposed Medicare Part D rule, which includes the latest efforts of the agency to lower out of pocket drug costs for patients and address pharmacy direct and indirect remuneration fees.

Hoey wrote that without incorporating the changes suggested by NCPA, the proposed rule “will fail to achieve its intended goals.” NCPA has advocated for pharmacy DIR fee reform over the past decade, with independent pharmacies having identified this issue for many years as their No. 1 challenge and the biggest threat to their survival.

In his comments Hoey said that CMS must resolve or clarify the following for resulting policy changes to have a positive effect on patients and community pharmacies:

• Ensure transparency of pharmacy reimbursement at the point of sale
• Close the coverage gap loophole in the proposed rule
• Address the effects on pharmacy cash flow, which the changes would disrupt
• Implement appropriate standardized pharmacy performance measures
• Enforce existing network adequacy and contract provision requirements

NCPA commissioned an “Actuarial Memorandum of the Model and Assumptions in Analyzing the 2023 Proposed Rule Regarding Pharmacy Price Concessions at Point of Sale” (beginning on page 17 of Hoey’s comments), prepared for Avalere Health on behalf of NCPA, because CMS failed to address the basis of assumptions that this proposal could result in a “modest” potential indirect positive effect on pharmacy payment, nor did CMS contemplate this proposal’s impact on small business pharmacies. The report, prepared by Harold Neil Lund who has over 50 years of experience in the United States health care and insurance markets, including experience in the Part D program since its creation, indicates that plans will claw back the loss of network DIR. The average pharmacy likely faces a 2 percent reduction in reimbursement if plans lower net reimbursement by 2 percent or more, the memorandum finds. This is based on PBMs’ long history of reduced pharmacy reimbursement in the Medicare Part D program. Higher performing pharmacies could face even steeper reductions in reimbursement as the rule biases plans from pharmacy incentive programs.

Hoey wrote, “On behalf of the 19,400 independent community pharmacies across the country, NCPA urges CMS to address the concerns we have raised in this letter in the final rule for CY2023 to ensure the continued vibrancy and financial solvency of the independent pharmacies serving millions of patients in their local communities every day.”

Thousands of independent pharmacists submitted their concerns to CMS, and similar concerns are also being expressed by more than 200 organizations in pharmacy stakeholder comments. NCPA helped coordinate these comments and build support. The organizations are urging CMS to eliminate retroactive pharmacy DIR fees and “ensure that these reforms ultimately achieve two things: reduce beneficiary drug costs and also protect pharmacy access.”

The proposed rule was released on Jan. 6, 2022, with the comment period closing on March 7.