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Good News On The Fight Against DIR Fees

There is some good news brewing when it comes to the pharmacy industry. On Friday, April 29, 2022 a ruling was passed to address Direct and Indirect Remuneration Fees (DIR) often imposed by the Center for Medicare/Medicaid Services (CMS) and Pharmacy Benefit Managers (PBMs). DIR fees are price concessions negotiated between PBMs and pharmacies participating in Medicare Part D networks. The practice of DIRs is a truly unfair one. They greatly affected pharmacies’ bottom lines, causing many to close. A DIR fee would be imposed months after a patient would fulfill a prescription, and the cost of the imposed fee would make profit margins for pharmacies fall short. The claw back tactic was hurting pharmacies, while inadvertently rising the cost of prescriptions for patients. Between 2010 and 2020, such fees had an increase of 107,400%. Organizations such as the American Pharmacists Association (APhA) have been appealing to CMS and congress to finally make sense of this unfair Medicare loophole. A final ruling has recently been passed eliminating these unfair fees by 2024. However, this change in legislation is only making PBMs and Medicare move any possible fees to the point-of-sale part of the med exchange. At least now, a small community pharmacy can accurately forecast costs on certain drugs when the sale happens, rather than months later. According to the APhA, this is a positive step. However, until this new ruling takes effect, Medicare Part D members will see historically low out of pocket costs while pharmacies are looking at incredibly low reimbursements. In order to fix this broken system, transparency is key. Until the new ruling takes place, it would be wise for your independent pharmacy to look at the buying power of joining a Group Purchasing Organization like UPN. We have been fighting on the state level to effect policies concerning independent pharmacies and DIR fees. At UPN, we stand strong with our community pharmacies, to remove DIR fees for good, while also bringing transparency to the pharmacy to patient exchange.

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