Are Specialty Pharmacies Unfairly Charged DIR Fees?

With the Community Oncology Alliance and the Centers for Medicare and Medicaid publishing reports about direct and indirect remuneration (DIR) fees, pharmacy benefit mangers (PBMs) are being condemned by many health care professionals and advocacy groups.

PBMs justify these fees as a way to ensure that pharmacies are meeting their standards, and providing patients with optimal care. However, according to the recently published reports and testimonial from different providers, these fees may threaten the viability of retail, independent, and specialty pharmacies.

In particular, specialty pharmacies have a lot at stake in terms of DIR fees. These pharmacies treat patients with serious illnesses, such as HIV and cancer, who require complex treatments for survival.

Since these pharmacies dispense medication that can cost thousands of dollars per patient per month, retroactive DIR fees can become overwhelming, and may eventually impact patient access to medication.

“When a DIR is calculated in such a way that it’s a percentage, it’s even more harmful since specialty pharmacies’ average dispense rate is a lot higher per transaction dollar amount than the average pharmacy in the community setting,” said Mike Agostino, RPh, vice president, Pharmacy Innovation and Business Development, Hy-Vee, president-elect of the National Association of Specialty Pharmacy (NASP).

Additionally, the parameters that DIR fees are calculated on do not always translate to specialty pharmacies. Many PBMs charge the fees based on meeting certain quality benchmarks regarding disease states that specialty pharmacies do not typically treat, Agostino told Specialty Pharmacy Times. Clearly, there is a lack of knowledge regarding specialty pharmacies and the patients they treat.

“Right now, specialty pharmacies are most adversely impacted by DIR fees, just because these fees do not incentivize specialty pharmacies to perform based on utilization. These are fees that are applied for all claims across the board,” Agostino said. “They are typically performance metrics that are assigned to categories that are not found within a specialty pharmacy, such as generic efficiency, 90 day fills, cholesterol management, diabetes management, and hypertension management.”

If a pharmacy does not meet these parameters, the clawback will likely be greater, compared with a pharmacy that meets PBM standards. Independent specialty pharmacies may be at risk of closing their doors due to high, nontransparent fees, which may cause a disruption in treatment for patients.

The Pharmaceutical Care Management Association (PCMA) has countered reports on the potential harm that DIR fees can have on patients. PCMA said in a previously issued press release these fees help to lower premiums overall.

“DIR reduces premiums for Medicare Part D beneficiaries, which leads to lower costs for the federal government. Stable and affordable premiums contribute to a 90% satisfaction rate among Part D enrollees for their drug plan,” PCMA said in a press release.

Going forward, Agostino advocates for enlisting the help of CMS to create clarity around specialty pharmacies, and create appropriate performance standards. Although the ultimate goal is to eliminate DIR fees, creating standards can, in theory, reduce DIR fees unfairly charged to specialty pharmacies. Specialty pharmacy-specific standards may also help the pharmacy perform well in value-based contracts.

“It benefits the plan by way of offering appropriate oversight, clinical management, and it also benefits the patient,” Agostino told SPT. “If that were to happen, then we have an opportunity to see where programs can be created to incentivize specialty pharmacies to want to be and maintain their best in class performance measurements. Right now we don’t have that.”

Improving performance measures is a short-term way to ensure that independent specialty pharmacies are able to stay in business, and provide necessary medical care to their patients.

While pharmacies and advocacy organizations have spoken out against DIR fees, PBMs and their associations have responded that the fees do not harm patients or the profitability of pharmacies.

However, Agostino told SPT that pharmacists must get involved in the conversation, and make sure that legislators are informed about how DIR fees can be detrimental to the health care industry.

“NASP, as an organization, is incredibly engaged. We hear our members loud and clear. As I have said to members before, get involved and speak up. Get to know your local Congress representatives, invite them to your specialty pharmacies, share with them what you do and how you take great care of patients, and explain to them that the business model that has been created within specialty pharmacy is a direct reflection on the type of critical care patients need with very advanced medications that are coming out,” Agostino said. “In order to stay relevant, we need to make sure that we’re doing the best that we can in educating our government officials as to the value of what we’re doing and to effectively come together and to show outcomes and those outcomes translate into the valve that we deliver.”

Education is a key factor, Agostino said. If lawmakers and government officials, such as CMS, are uneducated about specialty pharmacies, they may not fully understand how DIR fees can impact care for patients who require complicated treatments.

The more education government officials have regarding DIR fees, the more likely DIR fees can be fairly evaluated, which is the overall goal of those who oppose this PBM action.

“It is our hope that we can see the industry continue to band together and educate our government officials to continue to have impact at CMS,” Agostino concluded. “We need to continue to work collaboratively with CMS directly to help them understand the value of what we’re providing, and allow them to ask questions that can help them measure the success points of quality patient care within a specialty pharmacy.”

Editor's Note: Specialty Pharmacy Times provides balanced and fair coverage to both sides of the direct and indirect remuneration issue and does not advocate a position, but instead provides a platform for various stakeholders to express their viewpoints.