News Releases

NCPA Reacts to New Medicare DIR Fee Analysis

by NCPA | Jan 19, 2017

ALEXANDRIA, Va. (Jan. 19, 2017) Today National Community Pharmacists Association (NCPA) CEO B. Douglas Hoey, RPh, MBA, issued the following statement based on an initial reading of an analysis of direct and indirect remuneration (DIR) fees published by the U.S. Centers for Medicare & Medicaid Services (CMS):

"NCPA commends CMS for its attention to this issue and for publishing what will serve as a vital resource going forward. For approximately two years NCPA and its member independent community pharmacists have raised serious concerns with the proliferation of and accounting for retroactive pharmacy DIR fees in the Medicare Part D program. The issue has rightly commanded the attention of CMS officials and U.S. Senators and Representatives across the political spectrum.

"As CMS explains and contrary to what Part D plans and pharmacy benefit managers (PBMs) have previously asserted, DIR fees on pharmacies do not reduce the cost of drugs for beneficiaries at the point of sale and in fact push seniors into the 'donut hole' or catastrophic phase of the Part D benefit faster. This is especially true for the most vulnerable patients who use their prescription drug benefit the most. CMS also details that Part D plans and PBMs favor the use of these post point-of-sale price adjustments because it shifts more liability to the Medicare program and the federal government and away from the Part D plan and PBM.

"In addition, DIR fees have wreaked havoc on independent community pharmacies and their ability to continue serving patients. These fees, typically assessed by PBMs well after prescriptions are dispensed to patients, blow a hole in community pharmacy operating budgets that is difficult to mend.

"The CMS analysis is timely given the recent OIG report that documented a sharp increase in government spending on catastrophic coverage under Medicare Part D—a rise that has coincided with the steep jump in the prevalence and magnitude of pharmacy DIR fees. OIG determined that these costs—borne completely by Medicare and the taxpayers who support it—have gone from $10 billion in 2010 to $33 billion in 2015. Similarly, MedPAC has expressed concern with the apparently decreasing amount of risk sharing that Part D plan sponsors incur that is tied to this trend.

"The CMS analysis is an important step toward greater transparency and program integrity for Medicare Part D. Some important next steps could be for CMS to finalize the 'negotiated price' guidance as proposed to require fees be approximated at point-of-sale and for Congress to consider enacting bipartisan legislation to eliminate all retroactive pharmacy DIR fees or price concessions."

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The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 22,000 independent community pharmacies. Together they represent an $81.5 billion health care marketplace and employ more than 250,000 individuals on a full or part-time basis. To learn more, go to www.ncpanet.org, visit facebook.com/commpharmacy, or follow NCPA on Twitter @Commpharmacy.