March 14, 2022
Thank you for your commitment to these comprehensive reforms and for including this important proposal to reform Medicare pharmacy DIR as part of CMS' CY23 proposed rule. We urge you to strengthen these provisions and finalize them in the final rule, and we look forward to continuing to work with you to support Medicare beneficiaries and the pharmacies that serve them.
Manchin, Capito Renew Bipartisan Push To Lower Prescription Drug Costs
Washington,
DC – U.S. Senators Joe
Manchin (D-WV) and Shelley Moore Capito (R-WV) recently joined a bipartisan
group of 30 senators in requesting the Centers for Medicare and Medicaid Services (CMS)
finalize its proposed rule to stop all retroactive direct and indirect remuneration
(DIR) fees. This provision is expected to reduce seniors’ out-of-pocket
prescription drug costs by $21.3 billion over 10 years.
In a letter to CMS Administrator Chiquita Brooks-LaSure, the Senators said in
part, “Addressing
pharmacy DIR fees is essential to ensure beneficiary access to pharmacies that
provide lifesaving prescription drugs and other essential services like chronic
and complex disease management, wellness and prevention, vaccines, testing, and
medication therapy management. Over the past two years, we witnessed how
important access is as the nation continues to rely on pharmacies to care for
underserved and at-risk communities by ensuring access to COVID-19 testing,
vaccination, and therapeutics.”
In December 2021
CMS agreed to help lower prescription drug costs for Medicare Part D
beneficiaries by taking action to address DIR fees. CMS has since been drafting
a rule to stop DIR fees, which has not been finalized. Under Medicare Part D,
pharmacy middlemen require additional payments from pharmacies after the drug
is sold to the patient that changes the final cost of the drug. In recent
years, these middlemen have increasingly returned to pharmacies days or even
months after the final sale to demand more in DIR fees. From 2010 to 2020, CMS documented a 107,400% increase in DIR fees paid by pharmacies.
“Finally, we urge
CMS to work with industry stakeholders - including community pharmacies and
specialty pharmacies - to establish meaningful, standardized pharmacy
performance metrics to increase quality and consistency across the Medicare Part
D program,” the Senators continued. “Without standardized performance
metrics, pharmacies will continue to be forced out of networks due to low
reimbursement, limiting patient access to prescription drugs.”
In June, Senators
Manchin and Capito introduced the Pharmacy
DIR Reform to Reduce Senior Drug Costs Act to protect consumers and small businesses by holding
Pharmacy Benefit Managers (PBMs) accountable for retroactively assessing fees
on pharmacies.
The full
text of the letter can be found below or here.
Dear
Administrator Brooks-LaSure:
We write to urge
the Centers for Medicare and Medicaid Services (CMS) to finalize the proposal
included in the proposed rule for Contract Year 2023 Policy and Technical
Changes to the Medicare Advantage and Medicare Prescription Drug Benefit
Program (CY23 proposed rule) to help lower the cost of prescription drugs for
Part D beneficiaries through certain pharmacy direct and indirect remuneration
(DIR) fee reform in Medicare.
In its proposed
rule, CMS states that pharmacy DIR fees grew more than 107,400 percent between
2010 and 2020. The meteoric rise of these fees, coupled with the lack of
transparency in their application in the Part D program, is contributing to
increasing prescription drug costs for patients and the closure of hundreds of
pharmacies in communities across the country. Pharmacy DIR fees applied after
the point-of-sale artificially increase patients' out-of-pocket costs for Part
D drugs, which is why CMS' proposed reform to bring these fees to the point-of
sale will help achieve meaningful drug savings for seniors. In fact, the
reforms offered by CMS in the proposed rule alone are estimated to reduce
seniors' out-of-pocket prescription drug costs by $21.3 billion over 10 years.
Additionally,
pharmacies are an integral pillar of health care throughout the United States,
and often the sole provider of needed health care services in our rural and
medically underserved communities. Addressing pharmacy DIR fees is essential to
ensure beneficiary access to pharmacies that provide lifesaving prescription
drugs and other essential services like chronic and complex disease management,
wellness and prevention, vaccines, testing, and medication therapy management.
Over the past two years, we witnessed how important access is as the nation
continues to rely on pharmacies to care for underserved and at-risk communities
by ensuring access to COVID-19 testing, vaccination, and therapeutics. Enacting
Medicare pharmacy DIR fee reform will help sustain beneficiary access to these
essential services.
We thank you for
your work on the draft rule and your effort to address DIR fees in the proposed
rule. However, in addition to finalizing this proposal, more can and should be
done to deliver comprehensive pharmacy DIR fee reform. In December, you agreed
with Congress in your response letter stating, "That the significant
growth in DIR amounts is troubling" and pledged to address this through
the agency's rulemaking authority. We want to ensure this rule meets that
promise and truly stops all post-sale concessions charged to pharmacies,
including those assessed in the Medicare coverage gap. It is important that CMS
work with stakeholders to ensure this provision is as comprehensive as possible
prior to finalizing the rule.
Further, CMS
should take additional steps to protect beneficiary access to pharmacies by
ensuring pharmacies' actual reimbursement, inclusive of all DIR fees, is
reasonable as required under existing statute. Finally, we urge CMS to work
with industry stakeholders - including community pharmacies and specialty
pharmacies - to establish meaningful, standardized pharmacy performance metrics
to increase quality and consistency across the Medicare Part D program. We
recognized the importance of these transparent performance measurers by
including them in the Pharmacy DIR Reform to Reduce Senior Drug Costs Act (S.
1909). Without standardized performance metrics, pharmacies will continue to be
forced out of networks due to low reimbursement, limiting patient access to
prescription drugs.
Thank you for your commitment to these comprehensive reforms and for including this important proposal to reform Medicare pharmacy DIR as part of CMS' CY23 proposed rule. We urge you to strengthen these provisions and finalize them in the final rule, and we look forward to continuing to work with you to support Medicare beneficiaries and the pharmacies that serve them.
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