SURVEY FINDS PBM MIDDLEMEN CHARGED INDEPENDENT PHARMACIES MORETHAN $2 BILLION IN MEDICARE PRESCRIPTION FEES
“DIR” Fees Meant to Lower Cost of Prescription Drug Coverage for Seniors May Be Going to
Pharmacy Benefit Managers Instead
WINSTON-SALEM, NC (February 14, 2018) -- On the day traditionally reserved for honoring
matters of the heart, Pharmacists United for Truth and Transparency (PUTT) released the heartbreaking
results of a survey measuring fees PBM middlemen charged independent and community pharmacies for
filling prescriptions under Medicare Part D in 2017 and 2018. The fees, called direct and indirect
remuneration, or DIR, are supposed to reward patients and pharmacies for achieving certain therapeutic
and health-related outcomes by reducing plan plan premiums and out of pocket expenses but appear to
instead have become a secondary revenue generation stream for pharmacy benefit managers (PBMs).
In a survey of nearly 600 independent pharmacies, PUTT found PBMs had charged average
per-store DIR fees of $74,711 in 2017 and average per-store DIR fees of $129,614. The $54,903
difference represents a 74 percent increase in a single year. If all of the approximately 22,000
community pharmacies paid the 2018 average, PUTT estimates PBMs would have returned some $2.85
billion back to CMS and Medicare patients.
“At a time when the Health and Human Services Department is reporting a decline in Medicare
Part D for 2018 and a projected decline in Part D premiums for 2019 1 , we are deeply concerned to see the
burden of DIR fees have not only NOT decreased, they have increased nearly 50 percent in one year,”
said PUTT president and independent pharmacy owner Scott Newman. “The purpose and intention of
claiming these fees at the pharmacy level was to encourage adherence and foster an environment in which
patients and providers could partner to achieve the patient’s healthcare goals. Instead, pharmacies are
carrying the financial burden of the DIR fees, patients are being cut off from their pharmacies and PBMs
are raking in billions in profit they may or may not be sharing with CMS.”
PUTT conducted the survey in response to the Centers for Medicaid and Medicare (CMS)
proposed rule “Modernizing Part D and Medicare Advantage to Lower Drug Prices and Out of Pocket
Expenses”. The new rule provides patients and their providers with greater transparency of information
related to expense and availability of prescription medication options. Such transparency will also allow
pharmacies to know upfront the amount in DIR fees they will pay per Medicare-covered prescription.
However, for most independent pharmacies, DIR fees have become a costly and unsustainable
expense they must shoulder if they want to help patients with Medicare fill their prescriptions. Under the
DIR program, pharmacies are supposed to be able to recoup fees if their patients meet certain preset
healthcare outcomes. Additionally, pharmacies are rated under the Electronic Quality Improvement
Platform for Plans and Pharmacies (EQuiPP), a standardized quality measure that provides unbiased
benchmarked performance data to health plans and community pharmacy organizations. The average
EQuiPP rating among pharmacies participating in PUTT’s survey was 4.6.
Pharmacists United for Truth and Transparency (PUTT) monitors PBM and other industry
practices in the interest of improving the quality, safety and cost of patient care. To learn more about
PUTT, visit TruthRx.org.
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The offer the chance to get the money back if you meet certain goals. You could have 100% compliance
with therapeutic goals and outcomes and still not get that money back.