APhA, others file federal lawsuit against HHS to close DIR loophole

APhA, its pharmacy partners, and community pharmacies have long argued that PBMs working with Medicare Part D plan sponsors’ use of retroactive direct indirect remuneration (DIR) fees cheats beneficiaries, forces to close their doors, endangers access pharmacist-provided care. After years unsuccessful attempts get relief via legislation or regulation, APhA has signed on as an equal partner in a federal lawsuit demanding HHS end the “deceptive” practice.Who saves who paysOriginally filed by National Community Pharmacists Association (NCPA), NCPA v Becerra alleges 2014 rule violated language congressional intent 2003 Prescription Drug, Improvement, Modernization Act. “When Congress established D, it would never approved system which plans could squirrel away money rightly belongs patients,” said statement.PBMs extract DIR from weeks months after they dispense prescriptions patients. The are based savings PBM generate requiring networks make price concessions—pharmacies don’t agree these concessions excluded plans’ preferred networks.The scheme does not pass beneficiaries. Since prices copays at counter contracted before is extracted, beneficiaries up paying higher out-of-pocket costs.Disproportionate impactFurthermore, nature prevents businesses determining whether can afford stay open—and many cannot. An October 2019 JAMA Internal Medicine paper Qato colleagues reported one eight closed between 2009 2015.Evidence also shows significant growth deserts across country. A May 2021 Health Affairs study Guadamuz found neighborhoods predominantly Black Latinx residents significantly more likely be affected. In Chicago, for example, 32.6% deserts, compared 1.2% white neighborhoods. COVID-19 pandemic highlighted danger this trend. communities other color were much harder hit than counterparts, important points services, including testing vaccinations.Independent rural underserved areas bear brunt closures, but affect all serve This additional harm older adults millions Americans need local health care providers, plaintiffs say.Pandora’s boxWhile types PBM-negotiated reflected counter, “narrow exception” included final characterized “price cannot reasonably determined point sale.”Critics say exception proven anything narrow. Instead, increased clawbacks high rates. even acknowledged later proposed “pharmacy [including fees] grew 45,000% 2010 2017.”View Large Image Figure ViewerDownload Hi-res image Download (PPT)NCPA timelineDecember President George W. Bush Act (also known Act, MMA), law created D. voluntary benefit, administered federally private plans, provided coverage beneficiaries’ outpatient prescription drugs.The required “provide enrollees negotiated used payment [covered drugs].” further stated that, “[f]or purposes [Part D], shall take into account concessions, such discounts, subsidies, rebates, remunerations [DIR] covered part drugs, include any dispensing drugs.” intended “negotiated concessions” without exception. did authorize fees.January 2005HHS issued first regulatory definition prices,” “that ‘discounts, remunerations’ taken establishing drug prices.” 2009In another rule, amended refer total amount network receive. According HHS, amendment was designed increase transparency ensure sponsors base beneficiary cost sharing reporting CMS ultimately received provider, pass-through price.” fees.April 2010HHS issues reaffirmed prices. fees.May 2014HHS added narrow prices, previously concessions. applied “contingency point-of-sale [sic].” loophole exploited begin assessing fees.The declined prepare full thorough small-business analysis “because Secretary will impact substantial number small entities.” words, failed consider loophole’s pharmacies.September requested comments “with examples approximated [sic],” offered only 2 respond. Pharmacy organizations warned “reasonably determined” subject manipulation PBMs. agency heed warnings. 2016HHS directed report “any reconciliation accounts differences effective rate adjudicated achieved [sic] contingent incentive fees…” guidance (and guidances annually thereafter) contrary HHS’s price: difference sale. By failing determination price, again neglected loophole. Unchecked, stepped practice.November 2017In conceded despite intention narrowly, “we now understand [it] applies broadly we had initially envisioned because shift towards arrangements.” As result, said, “this current policy having effect transparency, consistency, costs.”To address challenge, advised “considering revising … remove require price.”Despite recognizing error, fees.November 2018HHS elimination adopted 2014. sale, might see lower premiums, do benefit through reduction must pay cost-sharing, thus, larger share actual drug,” rule.The data showed grown 2017. sale those “the rendered less transparent individual level representative sponsor.”Despite widespread support, finalize proposal left intact. continued levy 2021NCPA against U.S. District Court Columbia. filing allowing MMA, among improprieties.April 2021APhA joined partners NCPA.May 2021The government motion dismiss lawsuit, vowed challenge.Timeline time press.In subsequent rulemaking, recognize error unintended consequences passed multiple opportunities correct it. lawsuit’s demand exercise authority stop what characterize operating accountability.A ruling sides move eliminate altogether. Still, allow patients discounts give reimbursement transparency. practice. Who costs. Originally statement. networks. Disproportionate say. Furthermore, 2015. Evidence vaccinations. Independent Pandora’s 2017.”NCPA While sale.” Critics 2017.” press. fees. December drugs. January April pharmacies. September November costs.” To Despite rule. sponsor.” improprieties. NCPA. challenge. Timeline accountability.