U.S. Senators Move to Eliminate DIR Fees
The regulatory and legislative battle on direct and indirect renumeration (DIR) fees, in relation to Medicare Part D beneficiaries and pharmacies, has continued for years. IPA and our national partners have consistently advocated for pharmacists over this longtime debate. In recent news, Senator Sherrod Brown (D-OH), Senator Jon Tester (D-MT), Senator Shelley Moore Capito (R-WV), and Senator James Lankford (R-OK) sent a letter to the Centers for Medicare and Medicaid Services (CMS) requesting action on DIR fees. The letter proposes either working directly with Congress to eliminate DIR fees or to take administrative action to resolve this issue.
On December 14, 2021, Chiquita Brooks-LaSure, Administrator of CMS, responded to the Senators' inquiry. It reads in part:
“The agency has continued to study the role that pharmacy price concession fees play in the prescription drug marketplace. CMS agrees that the significant growth in DIR amounts is troubling and is planning to use our administrative authority to issue proposed rulemaking addressing price concessions and DIR.”
This letter is an exciting announcement for our nation's pharmacists and pharmacies, as DIR fees have increased by an incredible 91,500 percent in the last decade alone. Pharmacy benefit managers (PBMs), realizing the major revenue potential for DIR fees, have continued to exploit and abuse this loophole with little to no regulatory oversight. Notably, DIR fees are usually charged months after point-of-sale, are often based upon arbitrary metrics, and have a serious lack of transparency.
On Wednesday, January 12, CMS released their proposed rule. If finalized, it would eliminate PBMs' use of retroactive direct and indirect remuneration (DIR) fees. The proposed rule would revise Medicare Advantage (Part C) and Medicare Prescription Drug Benefit (Part D) program regulations, moving all pharmacy price concessions, including retroactive DIR fees, to the point-of-sale to benefit patients with lower cost sharing. IPA looks forward to submitting comments in support of the proposed rule.
IPA will also continue to advocate at the Iowa State Capitol this session for additional regulatory oversight of PBMs.