Pharmacy organizations applaud bill that will reform pharmacy fees

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Several major organizations representing pharmacies and pharmacists voiced their support for legislation that addresses pharmacy direct and indirect remuneration (DIR) fees.

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DIR fees charged to pharmacies grew from $229 million in 2013 to an estimated $9.1 billion in 2019, according to a 2020 study. The Pharmacy DIR Reform to Reduce Senior Drug Costs Act (H.R. 3554), introduced by U.S. Rep. Peter Welch (D-VT), seeks to reform DIR fees.

“DIR fees are exerting unnecessary and devastating pressures on patients, on pharmacies, and on communities – particularly the most vulnerable and the underserved. We welcome the introduction of the Pharmacy DIR Reform to Reduce Senior Drug Costs Act, and we urge its passage this year,” the organizations stated.

The legislation Is backed by the National Community Pharmacists Association, the National Association of Chain Drug Stores, the National Association of Specialty Pharmacy, the American Pharmacists Association, the Food Industry Association, the National Grocers Association, the National Alliance of State Pharmacy Associations, and ASCP.

“Resulting from a regulatory loophole, DIR fees charged by payers to pharmacies have the net effect of needlessly inflating Medicare patients’ out-of-pocket prescription drug costs and jeopardizing the viability of pharmacies,” the organizations said. “This pivotal legislation seeks to reduce patients’ cost-sharing, prevent plans and pharmacy benefit managers from clawing back fees from pharmacies, enhance price transparency, and establish consistent pharmacy performance measures that foster quality care and that enhance the viability and predictability of pharmacy operations.”

The organizations point out that the Centers for Medicare & Medicaid Services (CMS) has attributed the growth of pharmacy DIR fees to plans’ use of “performance assessments” of pharmacies. CMS found that fees based on these measures jumped 225 percent from 2012 to 2017.

DIR fee reform, according to CMS, will save beneficiaries approximately $7.1-$9.2 billion in reduced cost-sharing.

“Rightfully, much has been said during the pandemic about the importance of there being a pharmacy within five miles of 90 percent of Americans. This is a powerful statement about the needs of Americans and about the value of pharmacies, and the Pharmacy DIR Reform to Reduce Senior Drug Costs Act is a necessary response to the health and wellness needs of all Americans,” the organizations added.

A companion bill (S.1909) was introduced in the Senate by Sen. Jon Tester (D-MT).

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