NCPA Rebuts Misleading PBM Research Paper On DIR Fees

ALEXANDRIA, Va. (July 26, 2017)  The Pharmaceutical Care Management Association's (PCMA) research paper suggesting that accounting for fees on pharmacies at the point-of-sale would increase Medicare costs is based on dubious assumptions, said National Community Pharmacists Association (NCPA) CEO B. Douglas Hoey in a statement today.

"This is just another in a long line of studies the pharmacy benefit managers trade group has cobbled together to try to validate their practice of charging pharmacies unpredictable after-the-transaction DIR fees," said Hoey. "Those fees not only hinder independent pharmacies' ability to know whether or not they'll break-even on a transaction, but they also can push Medicare patients more quickly into the Medicare donut hole. This also pushes patients into the catastrophic phase of coverage where the government takes on the lion's share of the costs."

Hoey characterized the PCMA study as misleading and incomplete, noting the following shortcomings:

• The report fails to account for the federal savings that the federal government would realize by eliminating retroactive DIR—particularly by lowering the amount Medicare spends on low-income cost sharing (LICS) and federal reinsurance spending. 

• The report neglects to clearly state the considerable patient benefits inherent in eliminating retroactive DIR. Patients would realize lower out-of-pocket costs at the pharmacy counter. Current post-point of sale DIR arrangements only favor beneficiaries who enroll in Part D plans without using them. 

• The focus of PCMA's "study" is the effect of eliminating all manufacturer rebates and pharmacy price concessions—as opposed to simply applying those amounts at the point of sale. When applied at point of sale—which is exactly what the NCPA-supported legislation would do—savings would be provided not only to the federal government but also consumers/ taxpayers.

• This report also reveals that "PDPs and their PBMs also negotiate significant POS price concessions with their network pharmacies typically in the form of a percentage discount off a known price benchmark such as the wholesale acquisition cost (WAC). Unlike post-POS price concessions, these discounts can be determined at the time a prescription is dispensed. At the present time, PDPs and their PBMs are indeed deducting these amounts from pharmacy reimbursement but NOT at the point of sale. PDPs and their PBMs are clawing back these amounts from pharmacy after the point of sale and presumably reporting these amounts as DIR in direct violation of federal guidance.

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 22,000 independent community pharmacies. Together they represent an $81.5 billion health care marketplace and employ more than 250,000 individuals on a full or part-time basis. To learn more, go to www.ncpanet.org, visit facebook.com/commpharmacy, or follow NCPA on Twitter @Commpharmacy.