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ALEXANDRIA, Va. — The National Association of Chain Drug Stores is standing up for retail pharmacies and seniors in formal comments to the Centers for Medicare and Medicaid Services (CMS) on proposed Medicare rules for 2024.
The message: Finish the job on DIR (direct and indirect remuneration) fee reform.
In comments submitted earlier this month, NACDS noted that a rule finalized last spring and slated to take effect in January 2024 will “better align marketplace competition with the interests of Medicare patients, and lead to lower total health care costs, including lower out-of-pocket cost for beneficiaries,” and will “promote better medication adherence, mitigation of health disparities and, in turn, better health outcomes.”
But the new rule fails to fully address the “harmful effects” of direct and indirect remuneration fees,” NACDS said in comments addressed to Chiquita Brooks-LaSure, administrator for CMS, which oversees programs including Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and the HealthCare.gov health insurance marketplace.
“Unfortunately, the 2022 rule did not eliminate pharmacy DIR clawbacks that plan sponsors and PBMs impose on pharmacies, nor did the rule eliminate sponsors’ and PBMs’ incentives to continue to do so,” NACDS said. “Pharmacy DIR was intended as a payment or fee adjustment after the point of sale, with the amount calculated according to pharmacy performance metrics. But PBMs have exploited DIR to create a loophole in the Medicare regulation, allowing them now to dictate pharmacies’ reimbursement based on factors unknown or opaque to pharmacies.”
NACDS reminded CMS that the agency had indicated it would consider incorporating safeguards within the rules that would guarantee pharmacies participating in Medicare Part D receive a reasonable rate of reimbursement, and expressed disappointment in the absence of such a guarantee in the rule set to take effect in January.
“This is especially troubling as CMS also continues to fail to act … to address the long-standing and continuously growing problem of pharmacy DIR clawbacks,” the letter said. Pharmacy price concessions increased 50% between 2018 and 2020, NACDS said, and pharmacy price concessions, net of all pharmacy incentive payments, increased by about $9.5 billion, or 107,400%, from 2010 to 2020. Meanwhile, performance-based pharmacy price concessions, net of all pharmacy incentive payments, increased by an annual average of nearly 170% between 2012 and 2020 and now comprise the second-largest category of DIR received by sponsors and PBMs.
NACDS’ comments provide specific recommendations on issues beyond DIR fee reform that affect patients and pharmacies, including electronic prescribing to foster patient safety; the Limited Income NET (LINET) program to meet low-income individuals; meeting patients’ needs during medication shortages; the advancement of health equity; expansion of medication therapy management to help patients take medications as prescribed; and pharmacy reimbursement and operations issues.
NACDS represents traditional drug stores, supermarkets and mass merchants with pharmacies. Chains operate more than 40,000 pharmacies, and NACDS’ member companies include regional chains with at least four stores as well as national companies.
Pharmacy chains fill more than 3 billion prescriptions yearly, help patients use medicines correctly and safely, and offer services that can improve patient health and health care affordability.
