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05/10/2022

All about the fees: Will the new federal rule on reimbursement go far enough?

DSN editor in chief Nigel Maynard reveals how DIR fees are seen as the most challenging issue the industry faces.
Nigel F. Maynard
Editorial Director
Nigel F. Maynard profile picture

Last year, Drug Store News conducted a short survey asking our readers what is the most pressing issue the industry is facing at the moment. Much to our surprise, competition from Amazon only received 10% of the votes. The push for more e-commerce ranked a bit higher than Amazon and some respondents wrote in various answers that hardly registered as a blip among the almost 400 responses. But you know what made the top spots at 62%? Reimbursement fees.

The National Association of Chain Drug Stores said the fees are the result of a loophole in Medicare regulations.

“Often more than half a year after a pharmacy fills a Medicare prescription, payers are taking back money paid to pharmacies,” the group writes on its website. “Payers are claiming they are taking back money due to a pharmacy’s performance on so-called quality measures. However, these quality measures can be unknown, unpredictable, inconsistent and outside of a pharmacy’s control. The federal Centers for Medicare & Medicaid Services said that the use of DIR fees has exploded by 107,400% between 2010 and 2020 — a dramatic increase from the 45,000% growth that CMS reported between 2010 and 2017.”

Pharmacy executives said there is no simple fix for this problem, unless Congress pass new laws that provide some relief. There finally has been movement in Congress to do just that. 

“The federal Centers for Medicare & Medicaid Services said that the use of DIR fees has exploded by 107,400% between 2010 and 2020 — a dramatic increase from the 45,000% growth that CMS reported between 2010 and 2017.” — National Association of Chain Drug Stores

A recently finalized rule takes aim at the transparency of drug prices, including their associated rebates. The industry is hopeful, though questions remain. Does the new rule go far enough? What will be the market reaction? And how will PBMs react?

But two more important issues also remain. As one source told our reporter, the industry is likely to see changes, but what that change is and how long it takes remains to be seen. 

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