NASP President Discusses How Organization Works to Combat DIR Fees

Direct and indirect remuneration (DIR) fees have had a substantial impact on pharmacies, especially independent specialty pharmacies. Since these fees are charged after the fact by pharmacy benefit managers (PBMs), pharmacies may unknowingly be operating below their actual costs.

This leaves specialty pharmacies and their patients vulnerable. DIR fees additionally may accelerate Medicare patients into the donut hole, where they are responsible for covering the cost of their prescription drugs until they reach a certain threshold.

The National Association of Specialty Pharmacy (NASP) has spoken out numerous times about the impact of DIR fees, citing that specialty pharmacies and the patients they treat have been harmed by the fees. Since the fees are typically charged by percentage or are related to non-specialty conditions, NASP states that these pharmacies are unfairly charged.

Review more coverage about DIR fees.

In part 2 of this 3-part interview with Specialty Pharmacy Times, Rebecca Shanahan, JD, chief executive officer of Avella Specialty and president of NASP, discusses how the organization has taken a stand against DIR fees and how they plan to continue this fight into the future.

Read part 1 of the interview.

SPT: How has NASP gotten the word out about DIR fees?

Shanahan: NASP represents a variety of members, including: independent specialty pharmacies; retail pharmacies; pharmacies that are affiliated with integrated delivery systems and hospitals; pharmacies that dispense drugs in conjunction with doctors’ offices; pharmacies that are in federally qualified healthcare centers; and pharmacies that are owned or affiliated by PBMs. As you can imagine, all NASP members are negatively impacted by DIR fees, and we’ve heard from a great groundswell of our members, imploring us to more aggressively address this issue.

Over the last 2 or 3 years, NASP’s leadership has had increasingly constructive engagement with federal legislators and regulators around DIR fees.

We've welcomed NASP members to Washington, DC on 4 or 5 occasions for Congressional office visits, facilitating meaningful meetings with over 100 elected representatives and administrative support teams within those offices.

Off the Hill, but still inside the Beltway, we've met with executives at CMS and are working in conjunction with several other associations that have interests consistent with NASP’s to submit comments on proposed drug pricing legislation. NASP has also been working to draft our own legislative language and regulatory guidance, working on behalf of our members to achieve a number changes to the way DIR fees are managed.

In addition to meeting with CMS on a number of occasions in our nation’s capital, we have also hosted CMS members at some of our member pharmacies, working to educate around how specialty pharmacy works, what is involved in specialty pharmacy, and the value proposition that we deliver by helping sick patients navigate the complex and complicated healthcare system.

SPT: Can you speak more about the legislation or regulations?

Shanahan: On the agency oversight side, we’ve met with CMS representatives, encouraging them to exercise the regulatory authority of CMS by overseeing its contracted entities to ensure compliance with statutes, regulations and guidance.

On the legislative side, we've proposed language to reinforce Medicare’s Any Willing Provider law. That's based on the guidance CMS has already issued in the Medicare drug program manual, which says that offering pharmacies unreasonably low reimbursement rates for certain specialty medications cannot be used to subvert pharmacy access standards. Our proposed language basically restates that PBMs should do what CMS has already said they should do, which is not provide substandard reimbursement for specialty drugs and services.

We have also proposed legislative language to establish an independent third party responsible for setting specialty pharmacy standards.

On average, retail pharmacy patients adhere to therapy about 65% of the time, while specialty pharmacy patients have a 90% and greater adherence rate. We want to establish and apply standards to evaluate the performance of accredited specialty pharmacies in a way that is consistent with the patient care services they provide, as opposed to measuring performance on something other than those services. We already hold ourselves accountable for performance standards and criteria, such as time to fill, medical possession ratio, and patient satisfaction.

We also feel very strongly that specialty pharmacies should be accredited. Those pharmacies that demonstrate a level of commitment to all of the services surrounding specialty pharmacy should be entrusted to dispense specialty medications. We want to prohibit the percentage-based DIR fees or establish some maximum allowable fee, so that it doesn't end up with negative reimbursement for specialty pharmacies. Those are the things we are looking to include in our proposed legislation.

SPT: Has NASP seen support for their actions against DIR fees?

Shanahan: Over the course of the last 10 to 14 weeks, we've been really actively engaged on behalf of specialty pharmacy on lobbying, administrative, and legislative levels. I've seen a lot more interest in the topic and a growing understanding of the really egregious impact of DIR fees on sick seniors and on the Medicare program overall.

DIR fees impact out-of-pocket costs for seniors, and to the extent that you're a specialty pharmacy patient, you're likely to go through that donut hole faster than ever as a result of DIR fees. When sick seniors go through the donut hole, the taxpayer-funded Medicare program pays a much higher percentage of the overall cost of care. That's really putting a huge burden on Medicare in terms of costs for the program and costs to American taxpayers.

About 14 weeks ago, I was a lot more pessimistic about whether or not people would understand DIR fees as an important issue. I doubted whether people would hear us, and recognize the value that specialty pharmacy brings to the sickest, most vulnerable patients that are treated by specialty biologics.

Now, I'm beginning to feel a lot more optimistic. The way that DIR fees are currently set up has resulted in some really negative outcomes, not only for seniors and the Medicare program, but for specialty pharmacies that are placed in the untenable position of providing medications and white-glove services to patients, without really knowing whether they're going to lose money in the process.

Be sure to check back next week for part 3 of the interview.