Congress Urges HHS, CMS to Terminate DIR Fees

More than 50 members of Congress recently sent a letter to the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) calling on the agencies to eliminate direct and indirect remuneration (DIR) fees. This action would ensure that rebates and discounts are passed along to Medicare Part D beneficiaries to lower out-of-pocket costs.

In the letter, 54 members of Congress stated that several analyses show that Part D discounts and rebates have tripled since 2010; however, beneficiaries may not be seeing price concessions, according to the letter.

“We understand that common practices by pharmacy benefit managers (PBMs) and plan sponsors do not use DIR to reduce beneficiaries’ medicine costs at the pharmacy counter and actually leads to negative reimbursement for the pharmacy,” the legislators wrote.

The lawmakers also noted that these practices can increase costs for the government by causing more patients to accelerate into catastrophic coverage.

The potential dangers of DIR fees have been highlighted in numerous white papers and studies. These PBM practices may threaten access to life-saving medications and could shut down independent specialty pharmacies, according to the opponents of DIR fees.

The letter from Congress called on CMS to revisit strategies used to calculate the performance of specialty pharmacies.

“We also urge CMS to ensure patient access to specialty pharmacies is not limited by the use of inapplicable Star Rating measures,” the letter stated.

The parameters used to calculate DIR fees are often not well-suited for specialty pharmacies. Many PBMs charge the fees based on meeting certain benchmarks regarding diseases that specialty pharmacies typically do not treat, Mike Agostino, RPh, vice president, Pharmacy Innovation and Business Development, Hy-Vee, president-elect of the National Association of Specialty Pharmacy (NASP), previously told Specialty Pharmacy Times in an interview.

Due to this factor, there is a clear lack of knowledge about specialty pharmacies; however, this letter shows that lawmakers have become more informed about the importance of specialty pharmacies and the high-touch services they provide.

The NASP has been working to educate lawmakers about harmful DIR fees through various meetings, campaigns, and by launching StopDIRfees.com. Other pharmacy advocacy organizations have also taken action against DIR fees.

“The NASP commends Rep Carter and his Congressional colleagues for their strong leadership and support for this very important issue,” said Sheila Arquette, RPh, NASP executive director, in a press release. “Specialty pharmacies make significant contributions to clinical outcomes for patients, which is why we need to stop big PBMs from imposing fees that inflate prescription drug costs for the sickest, most vulnerable seniors — the very patients the Medicare Part D program was designed to protect. Unfair fees imposed by big PBMs threaten the specialty pharmacies that serve the unique needs of patients living with complex, life-altering, or life-threatening diseases, and they must not persist.”