In the News: Last Week to Submit Comments on Part D / DIR Fee Proposals

Monday, January 21, 2019

This is the last week for the public to submit comments to the Centers for Medicare & Medicaid Services (CMS) on the agency’s proposed rule, “Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses.”

The proposal offers possible policies for the year 2020 intended to “strengthen and modernize the Medicare Part C and D programs,” according the government’s press release. “The proposal would ensure that Medicare Advantage and Part D plans have more tools to negotiate lower drug prices, and the agency is also considering a policy that would require pharmacy rebates to be passed on to seniors to lower their drug costs at the pharmacy counter.”

The deadline to submit comments is Friday, Jan. 25, at 5 p.m. ET.

Industry Groups Urge Action

Several pharmacy industry organizations are urging their members to comment on the proposal, specifically in regard in to reforming direct and indirect remuneration, or DIR fees. According to a news bulletin in Drug Store News, both the National Association of Chain Drug Stores (NACDS) and the National Community Pharmacists Association (NCPA) are encouraging businesses to let CMS know they support the reforms outlined in the proposed rule.

NACDS wants member organizations to officially submit comments on “file code CMS-4180-P – and to assure that DIR fee reform is implemented for plan year 2020,” according to the article. DIR fees are retroactive charges applied to pharmacies by health plans and PBMs to make up for charges those organizations receive from CMS to account for budget variance from manufacturer rebates and prescription drug plans price adjustments used to offset Medicare Part D. When CMS applies these retroactive fees to health plans, health plans pass them on to pharmacies – often there is little transparency and little ability to anticipate and budget for these fees.

On its website, NCPA offers links to sample comments and a grassroots portal for its members to post comments to CMS. It also asserts that more than 96% of its members feel “eliminating the retroactive application of DIR fees is a top priority.”

More on the Rule

While the DIR fee reform is the issue of the moment for some organizations, the “Modernizing Part D” proposed rule contains several goals and mandates for CMS in the coming years. According to the press release, these include:

  • Providing Part D plans with greater flexibility to negotiate discounts for drugs in “protected” therapeutic classes, so beneficiaries who need these drugs will see lower costs
  • Requiring Part D plans to increase transparency and provide enrollees and their doctors with a patient’s out-of-pocket cost obligations for prescription drugs when a prescription is written
  • Codifying a policy similar to the one implemented for 2019 to allow “step therapy” in Medicare Advantage for Part B drugs, encouraging access to high-value products, including biosimilars
  • Implementing a statutory requirement, recently signed by President Trump, that prohibits pharmacy gag clauses in Part D

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