Sen. Chuck Grassley (R-Iowa) and a bipartisan group of 29 lawmakers are urging the Centers for Medicare & Medicaid Services (CMS) to help lower the cost of prescription drugs for Part D beneficiaries through certain pharmacy direct and indirect remuneration (DIR) fee reforms issued in a proposed regulation. In a separate letter, Grassley also reiterated his commitment to lower prescription drug costs by passing the Prescription Drug Pricing Reduction Act (PDPRA).
“Pharmacy DIR fees have grown more than 107,400% between 2010 and 2020,” Grassley said in his letter to CMS. “This has caused increased costs for seniors at the pharmacy counter. By ending DIR fee clawbacks, the proposed rule would reduce seniors’ net out-of-pocket prescription drug costs by $21.3 billion over 10 years. The unsustainable growth in DIR fee clawbacks has also hurt pharmacists, especially those operating independently in rural Iowa.”
Grassley continued, “I have consistently supported policies to end DIR fee clawbacks and support this proposed rule to reform DIR fees. By strengthening the proposed rule and finalizing it without delay, this rule will lower patient costs, maintain patient access to rural pharmacies, and provide pharmacists payment predictability that is needed to run their businesses.”
You can read the letter Grassley sent to CMS expressing his commitment to ending DIR fee clawbacks – while also advocating for the bipartisan PDPRA, which will comprehensively lower prescription drug costs
In a Senate Floor speech, Grassley expressed the importance of protecting access to rural pharmacies by ending DIR fee clawbacks and urged his colleagues to support this effort. Grassley also reiterated his commitment to passing the bipartisan PDPRA, which remains the best chance to lower prescription drug costs in a bipartisan manner.
“The Iowa Pharmacy Association appreciates Senator Grassley’s leadership and support in taking action to end DIR fees. Representing over 2,500 members across the state, IPA hears about the negative impact retroactive DIR fees have on pharmacists and the patients they serve daily. Thank you to Senator Grassley,” said Kate Gainer, CEO of the Iowa Pharmacy Association.
“The imposition of increasing DIR fees continues to have a devastating impact on our patients as well as our company. Our communities rely on us; however, the economic impact of the current DIR landscape is becoming unmanageable. We greatly appreciate Senator Grassley’s persistent efforts and advocacy on behalf of the industry and his constituents,” said Kristin Williams, Executive Vice President and Chief Health Officer, Hy-Vee, Inc.
“I would like to thank Senator Grassley for signing onto the Senate DIR reform letter and for all of his advocacy for Iowa pharmacy and consumers. This proposed action would stop DIR fees from artificially raising prescription prices for consumers. In addition, retroactive DIR fees make cash flow almost impossible for pharmacies to manage. With DIR fees, the pharmacy does not know how much they will get paid for prescriptions until months later which is what makes cash flow management difficult to assess,” said Bill Drilling, Pharmacist and Owner of Drilling Pharmacy in Sioux City.
“I would like to thank Senator Grassley for signing onto the Senate DIR reform letter and for all of his advocacy for Iowa pharmacy and consumers. These fees are ‘legalized theft’ for both the patient that they were designed to ‘care for’ and the community pharmacies that provide the care, as these ‘fees’ cause patients to pay higher out of pocket costs for their medications. When the PBM imposes these ‘retroactive DIR fees’ they do not make any adjustments to the patients’ out of pocket costs which in most cases would be less based on the modification of the cost of the medication. Also, with DIR fees, the pharmacy does not know how much they will get paid for prescriptions until months later which is what makes cash flow management difficult to assess. In addition, the proposed action will assist with maintaining the viability of Iowa’s community pharmacies, especially in rural Iowa where access to care is already suffering,” said Cory Garvin and Michelle Garvin, owners of Wester Drug Pharmacy in Muscatine.
"I commend and support the work that Senator Grassley is doing to lower prescription drug costs and his focus on ending retroactive DIR fees. It is important that we recognize that DIR fees, in general, have morphed from the intent from CMS—passing manufacturer rebates and other price adjustments to the ultimate payer (in this case CMS). Today, DIR fees have a myriad of meanings, are not transparent, and negatively impact the pharmacy, and more importantly the patients our pharmacists are serving. DIR fees are cloaked in unnecessary vagueness and complexity—the only ones who seem to understand them are the same entities (PBMs) that have exploited them. It begs the question, who does it really benefit? Certainly not the payer nor the patient. Addressing retroactive DIR fees is a start and I applaud Senator Grassley’s lead on this issue. Ultimately, let’s work together to determine a fair reimbursement system that keeps the rural pharmacies open while lowering out-of-pocket drug costs for patients,” said Randy McDonough, CEO of Towncrest Pharmacy Corp.
Grassley has previously called for pharmacy DIR fee reforms, including in a bipartisan letter sent by 23 senators in September 2019; in the bipartisan PDPRA that prohibited retrospective recoupment of payments to pharmacies by Part D plans and PBMs; and in remarks to business leaders and health care advocates when discussing PDPRA.
Throughout 2021 and 2022, Grassley has spoken about his bipartisan efforts to lower prescription drugs costs with President Biden, Speaker Pelosi, Health and Human Services (HHS) Secretary Becerra, members of the Problem Solvers Caucus Health Care Working Group, rank-and-file members of Congress and White House staff. In 2019, PDPRA passed the Senate Finance Committee under the leadership of then Chairman Grassley on a bipartisan vote, 19 to 9. As chairman, Grassley held three hearings on lowering the cost of prescription drug prices, led a bill mark-up and conducted numerous bipartisan meetings to advance the bipartisan deal.
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