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Published on Friday, January 7, 2022

APhA welcomes CMS’ proposed elimination of retroactive DIR fees in potential win for patients and pharmacies

WASHINGTON, DC—The American Pharmacists Association (APhA) is pleased to see provisions in a new Centers for Medicare and Medicaid Services (CMS) proposed rule that would eliminate pharmaceutical benefit managers’ (PBMs’) use of retroactive direct and indirect remuneration (DIR) fees, which increase patient out-of-pocket drug costs and causes harmful impacts at pharmacies.

Retroactive DIR fees are price concessions not reflected at the point-of-sale for pharmacies participating in Medicare Part D networks. The retroactive fees, which are assessed weeks or even months after Part D beneficiaries’ prescriptions are filled, mean pharmacies may not realize that they didn’t recoup their costs until long after a prescription is filled. This complicates pharmacies’ decisions about staffing and whether to expand or even remain open. Patients may also pay higher out-of-pocket costs without benefiting from these price concessions at the pharmacy counter.

The proposed rule would move all pharmacy price concessions, including retroactive DIR fees, to the point-of-sale to benefit patients with lower cost sharing. It would increase predictability for pharmacies and address a regulatory loophole CMS opened in 2014 that allowed PBMs to have unlimited license to apply retroactive DIR fees.

“If finalized, this is a major step forward for patients and pharmacies,” said Scott J. Knoer, MS, PharmD, FASHP, APhA executive vice president and CEO. “We appreciate CMS’ bold proposed action to lower patients’ out-of-pocket costs at the pharmacy counter, which responds to APhA’s years of advocacy to eliminate Part D plans’ and PBMs’ harmful use of retroactive DIR fees. APhA thanks CMS for listening. We will be working to ensure that CMS finalizes a rule that benefits both patients and pharmacies.

“Eliminating the retroactive use of DIR fees is a step in the right direction, but we must go further to end PBMs’ devastating business practices. APhA will continue to work with the administration to eliminate these harmful practices in order to advance health equity in rural and underserved communities, where the local community pharmacy may be the only health care provider for miles,” Knoer said.

APhA continues to analyze the proposed rule and its impact.

About APhA

APhA is the only organization advancing the entire pharmacy profession. Our expert staff and strong volunteer leadership, including many experienced pharmacists, allow us to deliver vital leadership to help pharmacists, pharmaceutical scientists, student pharmacists, and pharmacy technicians find success and satisfaction in their work and advocate for changes that benefit them, their patients and their communities. For more information, please visit www.pharmacist.com.

 

 

CONTACT: Renee Kalu

202.429.7532; rkalu@aphanet.org

 

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