NCPA says DIR fees threaten pharmacies

ALEXANDRIA, Va. – After failing to get relief on direct and indirect remuneration fees through legislative and regulatory pathways, the National Community Pharmacists Association says it was left no choice but to file a lawsuit to stop what it says is an “existential threat” to independent pharmacies. 

The lawsuit, filed in January against the U.S. Department of Health and Human Services, states that the fees are without reasonable transparency, and they conceal from patients and taxpayers the true cost of prescription drugs. 

“This is not something we took lightly,” said B. Douglas Hoey, NCPA CEO and a pharmacist. “For one reason or another, Congress and the executive branch have so far failed to get it done. We aren’t giving up on those pathways but frankly, the damage caused by pharmacy DIRs escalated to an existential threat to community pharmacies.” 

In the lawsuit, NCPA seeks to close the “loophole” created by a rule allowing price concessions to be imposed on pharmacies long after the point of sale, which it says violates the language and intent of the Medicare Act.  

A recent study cited in the lawsuits shows that pharmacy DIR fees, in which pharmacy benefit managers claw back a portion of a pharmacist's reimbursement for the costs of a patient’s medication, have increased 1,600% since 2015, with $4 billion in DIR fees being squeezed from pharmacies in 2017 alone. NCPA says it routinely gets reports of pharmacy benefit managers clawing back $100,000 per pharmacy annually. 

Making it even harder: DIR fees vary widely by health plan, says the NCPA. 

“Some are pay to play, some are percentage based, some are tied to quality measures – they are all over the place,” said an NCPA source. “Some are clawed back monthly or quarterly, bi-annually or annually. From the perspective of our members, it’s hard to get a handle on.”