DIR relief making slow moves, but it’s a start

Earlier today, the Senate Finance Committee marked up the package of legislation on drug prices and supply chain issues that was introduced on Tuesday. Among many other aims, the sweeping legislation would prohibit spread pricing in Medicaid programs and increase transparency of PBM practices in Medicare. These are matters of critical importance to pharmacists and their patients.

The bill the committee voted on today did not include an amendment to provide relief from retroactive direct and indirect remuneration (DIR) fees. APhA has been working nonstop to keep Capitol Hill informed about the desperate conditions many pharmacies are enduring because of these fees. The message has been, “These pharmacists need relief NOW, or we may be facing major closings in the near term!” We believe real DIR reform will have a significant impact on pharmacists’ ability to take care of patients. This may stem the flow of funds to the middleman and allow more effective patient care.

Assessed weeks or months after Part D beneficiaries’ prescriptions are filled, retroactive DIR fees complicate pharmacies’ decisions about staffing and whether to expand or even keep open a business. Pharmacies may not realize until long after a prescription is filled that they didn’t even recoup their costs. And patients pay higher out-of-pocket costs without benefiting from these price concessions at the pharmacy counter.

But there is hope. DIR fees weren’t part of the bill, but they were part of the conversation. We are grateful that the committee is taking another look at them.

In particular, I’d like to thank Sen. Sherrod Brown (D-OH) for his commitment to finding a solution to this issue. During the Committee meetings, Sen. Brown engaged in a conversation, technically known as a “colloquy,” with Committee Chair Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) to get their pledge for inclusion of DIR fee reform in future iterations of drug pricing legislation.  

During his remarks, Sen. Grassley lamented that CMS declined to finalize a proposed rule that would have ensured all pharmacy price concessions were assessed at point of sale—he even specifically called out “unfair clawback practices that affect pharmacists who are trying to take care of their patients.” He then pledged to work with Sen. Wyden to include similar policy in the legislation that will eventually come to a vote.

Sen. Brown also touted a bipartisan bill he introduced yesterday, the Phair Relief Act, which would freeze retroactive DIR fees for 5 years and establish standardized quality metrics that PBMs would have to use to assess any fees after the 5-year freeze ends.

Sens. Tom Carper (D-DE) and Rob Portman (R-OH) also highlighted the need for rebate savings to be passed directly to the patient. Sen. John Thune (R-SD) specifically named DIR fees as a target of his, and Sen. James Lankford (R-OK) called them out, too. These are very positive signs that relief from DIR fees that put pharmacies in peril and push Part D patients into the donut hole could be coming.

Since the senators will be heading back to their home states during August for the “summer recess,” you can let them know we need DIR relief NOW. Reach out to your senators and representatives and tell them how DIR fees harm you and your patients. Invite them to your pharmacy while they are at home for the August break, or visit their district offices. And encourage your patients and health care colleagues to do the same! Check out APhA's Advocacy resources for helpful hints for contacting legislators.

If you haven’t yet, check out and share these ads from our coalition partners at the National Community Pharmacy Association and National Association of Chain Drug Stores. Great work!