Independent Pharmacy Insights

NASP: Calling Out DIR Fees and PBM Complicity

  September 28, 2017  

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Last month, the National Association of Specialty Pharmacy (NASP) made a bold and decisive move by stating its position on specialty drug pricing’s two most controversial issues – DIR Fees and PBM Complicity. The NASP believes that the lack of transparency in assessing these fees is damaging the healthcare industry and putting patients – especially seniors receiving Medicare – at unnecessary risk.

The specialty drug industry has long argued that DIR Fees and PBMs often worked together to create complex and muddy transactions that are difficult – if not impossible – to follow.  These transactions often result in an increased cost in drug pricing, which is then passed on to patients.

In August, a class-action lawsuit was filed against the large retail pharmacy CVS Health.  In this lawsuit, customer Megan Shultz claims she was charged almost double ($169 instead of $92) for a generic prescription, simply because she used health insurance instead of paying out of pocket. Schultz is arguing that CVS Health knowingly colluded with pharmacy benefit managers (PBMs) to increase generic drug costs and pad profits.

NASP’s Executive Director Sheila Arquette stated:NASP- Calling Out DIR Fees and PBM Complicity blog-02.png

“Unfortunately, the current market dynamics and lack of transparency make it very difficult for patients and healthcare providers to navigate the increasingly complex healthcare and drug delivery system.

NASP will continue working with Washington, individual states, and others in the healthcare delivery channel to institute reforms that will not only benefit patients and healthcare providers, but taxpayers alike.”

Combatting DIR Fees

In response to this lawsuit, the NASP launched www.stopDIRfees.com.  This website is dedicated to raising awareness and action regarding the “increasingly negative consequences” of direct and indirect remuneration (DIR) fees. Acting as an information center for everyone from providers to patients and government administrators to the media, the NASP’s press release states that the website was created to “educate and empower Americans” to eradicate the practice of assessing DIR fees from the pharmacy industry.

NASP- Calling Out DIR Fees and PBM Complicity blog-03.pngRebecca Shanahan, NASP President and Avella Specialty Pharmacy CEO, states:

“It’s time for Washington to take action by requiring PBMs to stop DIR fees and enhance transparency by opening up their ‘black box’ of information. We need big PBMs to engage in an open and honest discussion around containing prescription medication costs for sick seniors, and work with specialty pharmacies to establish standards and incentives that apply to the unique services provided or patients treated by specialty pharmacies.”

Included in this press release is information attributed to a study published in JAMA Internal Medicine asserting that the evidence shows rebates and remunerations like DIR fees ultimately increase out-of-pocket costs for Medicare Part D beneficiaries. Dr. Peter Bach, director of Memorial Sloan Kettering Cancer Center’s Center for Health Policy and Outcomes, and a co-author of the paper, calls the current Medicare system “absolutely devastating for people on high-cost specialty drugs.”

What’s Next?

The future of DIR fees, for now, will remain unclear. For years, there have been strong voices arguing against the fees and the opportunity for abuse that they create when PBMs enact them. However, there is still a very large number of advocates arguing that the fees can reduce Medicare premiums and ensure high-quality care for patients.

There’s no quick fix to the DIR fee and PBM complicity argument. So, for now, the specialty pharmacy industry and its stakeholders will need to continue working on finding the solutions to these costly issues that have the capability to negatively affect the health of millions.

Be sure to follow this blog for updates on this evolving issue and for more tips, insights and bulletins that can save you money – all from your partners at AlliantRx.

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