Senate Introduces Bill to Combat High Pharmacy DIR Fees

A bill addressing the abusive business practices by pharmacy benefit managers (PBMs) that have resulted in the growth of pharmacy direct and indirect remuneration (DIR) fees and have led to pharmacy closures, was introduced this week to the U.S. Senate.

The Protect Patient Access to Pharmacies Act (S. 2052) will help to secure Medicare patients’, typically seniors, freedom to receive medications and care from the pharmacy of their choice by improving enforcement of the “any willing pharmacy” law. This law is intended to prevent the exclusion of pharmacies from Part D plan networks, according to a release by the National Association of Chain Drug Stores.

The Patient Access Act is only the most recent effort working toward DIR fee relief as the Centers for Medicare and Medicaid Services’ (CMS) proposed rule made in early 2022 goes into effect in the beginning of 2024. CMS’ proposed rule will work to reduce the financial burden on independent pharmacies and increase transparency in the PBM industry.

According to CMS, retroactive DIR fees have increased by 107,400% between 2010 and 2020 — a massive climb from the 45,000% growth reported between 2010 and 2017. The increase in fees is not only forcing pharmacy closures, but also inflating the amount that seniors pay for prescription drugs. IQVIA had previously reported that almost 2,200 pharmacies closed nationwide because of this issue between December 2017 to December 2020.

The efforts of the recent Protect Patient Access to Pharmacies Act are supported by organizations such as the National Community Pharmacists Association, the National Association of Chain Drug Stores, the National Association of Specialty Pharmacy, the National Grocers Association, FMI – The Food Industry Association, and the American Pharmacists Association.

In a joint statement, these organizations shared their appreciation of the commitment and leadership of U.S. Senators Jon Tester (D-MT), Shelley Moore-Capito (R-WV), Sherrod Brown (D-OH), and James Lankford (R-OK) as they advance the bill to address the devastating pharmacy DIR fees and tactics.

“[(PBMs)] and payers continue to use pharmacy DIR and other fees to manipulate the Medicare program,” the organizations said. “For more than a decade, these tactics have fueled their profits while inflating seniors’ out-of-pocket prescription drug costs, threatening the viability of pharmacies of all sizes and types, and undermining the Medicare program..”

“These fees – which are imposed on pharmacies indiscriminately and retroactively – would be impossible to bear for any business. They put pharmacy access in peril in rural, urban, and all areas. We applaud the bipartisan bill sponsors for taking action to uphold and enforce the ‘any willing pharmacy’ law to prevent these behaviors that have the ultimate effect of limiting pharmacy access for seniors.

By finalizing a rule that is set to take effect in 2024, CMS took a step forward toward addressing pharmacy DIR fees, but this did not complete the job as pharmacy DIR fee claw backs continue and protections to ensure patient access to pharmacies have not been addressed.

To ensure “this job gets done, and gets done completely, for the American people,” the pharmacy organizations declared they will work with leaders in Congress to enact this legislation this year, achieving comprehensive PBM reform.

This article originally appeared on Managed Healthcare Executive.