Front-Line Impacts of Point-of-Sale DIR Fees on Community Pharmacies: Mid-Year Update with AAP

At the Total Pharmacy Solutions Summit Summer 2024, held July 13, a roundtable session titled “Front-Line Impacts of Point-of-Sale DIR Fees on Community Pharmacies: Mid-Year Update with AAP” discussed the real-world implications of applying Direct and Indirect Remuneration (DIR) fees at the point of sale rather than through retroactive clawback.

The roundtable discussion featured 4 speakers: Jeff Harrell, an independent pharmacy owner and president-elect of the NCPA Board of Directors; Wayne Boese, vice president of sales at American Associated Pharmacies, Carter Tatum, solution sales and strategy manager of financial solutions at EnlivenHealth; and Jason Ausili, PharmD, MSLS, head of pharmacy transformation at EnlivenHealth.

“Going into Q3 and Q4 of last year, we were really concerned about the impact of the DIR fees coming at the time of the transaction and of course those quarterly clawbacks coming in Q1 and Q2 of this year,” Boese said during the session. “In the initial comments and conversations I had with pharmacy owners, there was a lot of people [who were] not really understanding the impact and I don’t think taking it seriously. But I think there was enough communication that that actually did change over the last 2 quarters of last year.”

On January 1, 2024, a new provision from the Centers for Medicare and Medicaid Services took effect which required insurances plans and pharmacy benefit managers (PBMs) to apply DIR fees at the point of sale. Although this rule aimed to bring more transparency to the industry, many were concerned that it would result in a cash crunch for independent pharmacies.—and that’s exactly what happened. According to a poll conducted by the National Community Pharmacists Association, 32 percent of respondents said they may shut their doors in 2024 because of the cash crunch resulting from the CMS provision.¹

“For 31 years I’ve been working with independent pharmacies,” said Boese at the conclusion of the session. “What I will say, and I say this all the time to my team, no matter what’s happening, there are going to be pharmacy owners that are going to adapt, they’re going to find a way to make it. There are new pharmacy owners coming up all the time, younger people with new ideas, and those people are adapting…Pharmacy owners will find a way. They will flourish.”

References

1. Local Pharmacies on the Brink, New Survey Reveals. News Release. NCPA. February 27, 2024. Accessed July 26, 2024. https://ncpa.org/newsroom/news-releases/2024/02/27/local-pharmacies-brink-new-survey-reveals