249 organizations sign letter urging Congress to reduce senior drug costs by addressing backdoor pharmacy price concessions
ALEXANDRIA, Va. – Hundreds of organizations representing community pharmacies, grocery store pharmacies, specialty pharmacies, chain pharmacies, patient groups, buying groups, health systems, wholesalers, and business groups are making an all-out push for legislation that would stop the abuse of pharmacy price concessions charged by third-party middlemen, which have increased 91,500 percent in recent years. The Pharmacy DIR Reform to Reduce Senior Drug Costs Act (S. 1909 / H.R. 3554) was introduced in the Senate by Sens. Jon Tester (D-Mont.) and Shelley Moore Capito (R-W.Va.), and in the House by Reps. Peter Welch (D-Vt.) and Morgan Griffith (R-Va.).
In a letter to Congress signed by 249 organizations, they explained how pharmacy DIR fees – direct and indirect remuneration – affect seniors and pharmacies:
"These fees, which lead to higher costs for beneficiaries at the pharmacy counter, impose ever‐increasing challenges on struggling seniors, putting them at risk for reduced medication adherence and poorer health outcomes. These fees also make it harder for pharmacies to continue operating and providing seniors and special needs populations with the medications and services they desperately need. Many pharmacies have closed over the past few years and have cited DIR fees as a primary cause. These pharmacy closures reduce access to vital healthcare services; especially in rural and underserved areas where healthcare options are already limited.
“Pharmacy DIR fee reform is urgently needed. CMS has stated that eliminating retroactive pharmacy DIR fees will save beneficiaries an estimated $7.1-$9.2 billion in reduced cost sharing. This common-sense, bipartisan legislation would reduce beneficiary cost-sharing on drugs and eliminate the plans/PBMs clawing back fees from pharmacies, providing increased price transparency for patients and pharmacies. Importantly, this legislation would establish a new pharmacy performance system based on standardized, evidence-based measures to reward and improve quality of care provided by pharmacies.”
Today, billions of dollars in pharmacy DIR fees are assessed weeks, and sometimes months, after the point of sale. These fees significantly drive up out-of-pocket costs for seniors and other patients, doing nothing to improve health care. As fees have increased sharply in recent years, they have contributed to pharmacies shutting their doors.
The importance of pharmacies as part of the national health care infrastructure has never been more important. According to a recent federal report, retail pharmacies have delivered more than 80 million doses of COVID-19 vaccine in the last five months. Without DIR reform, many pharmacies will disappear, say the leaders, and millions of Americans will lose access to health care providers just when the need is greatest.
Several members of the coalition gathered at Grubb’s Pharmacy, a locally owned store in Washington, D.C., just a short walk from the Capitol, before presenting the stakeholder letter of support to bill sponsors. Among them were the National Community Pharmacists Association, FMI – The Food Industry Association, the American Pharmacists Association, the National Grocers Association, the National Association of Specialty Pharmacy, and the National Association of Chain Drug Stores.
Andie Pivarunas, National Community Pharmacists Association
Heather Garlich, FMI – The Food Industry Association
Frank Fortin, American Pharmacists Association
Laura Strange, National Grocers Association
Sheila Arquette, National Association of Specialty Pharmacy
Kathleen Bashur, National Association of Chain Drug Stores