Take a Stand Against DIR Fees

By Peter Kounelis, R.Ph. |

Direct and indirect remuneration (DIR) fees are wreaking havoc on balance sheets across community pharmacies, with many asking what can be done right now. It is reasonable to expect that pharmacy reimbursements are fair, accurate and timely, yet DIR fees are misleading, confusing and retroactive. This lack of transparency, as well as the resulting instability, threatens the viability of independent community pharmacies — and impacts patient access to medication.

According to the National Community Pharmacists Association (NCPA), DIR fees are the top concern for pharmacies.1 And thanks to the hard work of pharmacists and organizations like the NCPA, they are now receiving some much-needed attention from the government via the Improving Transparency and Accuracy in Medicare Part D Spending Act2.

The act, a bipartisan piece of legislation introduced in September, aims to assess price concessions at the point of sale rather than retroactively — and prohibit pharmacy benefit managers (PBMs) from reducing payments after the fact on claims. Lawmakers designed the bill to give pharmacies greater transparency and certainty about prescription reimbursements as the medications are dispensed, rather than waiting months to find out. If the legislation is passed as written, it would increase pricing transparency — without increasing costs. This is in contrast to the current situation where, because of unaccounted DIR fees, drug costs are increasing.

How This Is Affecting Community Pharmacies

In short, this law is vital for the retention and growth of community pharmacies. In its current form, the obscurity surrounding DIR fees means pharmacies don’t usually know how much the fee will be — or exactly when they’ll incur it. Fees rise year after year, and this uncertainty can lead to revenue shortages that affect payroll, staffing, medication supply and other issues.

With this in mind, increased transparency and predictability between third-party PBMs and those dispensing drugs to patients should be met with widespread approval from all parties, and all pharmacy stakeholders are urged to advocate for the pending legislation.

What Community Pharmacies Can Do Today 

While the legislation is certainly a step in the right direction, PBMs will continue to assess the fees. As such, pharmacies need to take every action they can right now. In addition to endorsing the bill to curb retroactive DIR fees, pharmacists need to further ensure that their voices are heard. This includes contacting their congressional representative and senators directly. To make an even more personal and lasting impression, legislators should be invited to visit the pharmacy. While experiencing first-hand the patients and community who benefit from the accessible care delivered by an independent pharmacy, pharmacy owners can discuss the issues and policies that impact their business and begin to develop a relationship with those that can help make a difference.

AmerisourceBergen joined NCPA and other pharmacy stakeholders in writing to the sponsors and original co-sponsors of S. 3308/H.R. 5951, the Improving Transparency and Accuracy in Medicare Part D Spending Act, to endorse the legislation banning retroactive DIR fees. Learn more about supporting DIR legislation by visiting AmerisourceBergen’s advocacy website, Our Independent Voice. AmerisourceBergen’s government affairs team is dedicated to educating legislators about the quality patient care provided via community pharmacies and will help arrange a visit to your pharmacy. Contact us to make arrangements today.


1. Johnsen, M. (2016, September 28). NCPA addresses No. 1 issue facing independents in Morning Consult op-ed. Retrieved from http://www.drugstorenews.com/article/ncpa-addresses-no-1-issue-facing-independents-morning-consult-op-ed
2. Improving Transparency and Accuracy in Medicare Part D Spending Act. (2016, September 8). Retrieved from https://www.congress.gov/bill/114th-congress/house-bill/5951

About the Author

Peter Kounelis

Peter Kounelis, R.Ph.

Vice President of Elevate Provider Network
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