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Navigating the Complexities of the Upcoming DIR Fee Changes

How SureCost Empowers Pharmacies to Overcome DIR Fee Challenges

Pharmacy direct and indirect remuneration (DIR) payments for Part D have been finalized by the Centers for Medicare and Medicaid Services (CMS) and will take effect in 2024. Pharmacy benefit managers (PBMs) receive DIR fees from pharmacies in return for access to patients’ prescription medication business. Currently, these charges may be prospective or retrospective. Retrospective DIR costs are paid after the medication is given out. These can be substantial, and in some instances, they have even gone beyond the amount that the pharmacy was reimbursed for the medicine. A final change was published by the CMS to eliminate retroactive DIR fees and mandate that PBMs reflect costs based on the agreed-upon price paid at the time of sale rather than months later. These changes are part of a larger effort by CMS to increase transparency and competition in the prescription drug market.

The Impact of DIR Fee Changes

Pharmacists will experience both positive and negative impacts from these changes. Positively, patients will now have easier access to information on the price of their prescription medications. Therefore, patients will have greater control over their healthcare expenses and find it easier to choose the appropriate treatments for them. Patients will be able to view the full cost of their medications, including any DIR fees, at the moment of purchase. This could lead to increased patient loyalty and satisfaction. 

However, there’s a detrimental impact due to these changes. Pharmacies’ cash flow will be negatively impacted because in Q1 and Q2 of 2024, pharmacies will be paying double DIR fees: retroactive DIRs from 2023 and the new DIRs occurring at the point of sale. The DIR Changes could also lead to changes to contracts between pharmacies and PBMs. With PBMs no longer able to collect retrospective fees to offset the cost of providing pharmacy services, they may lower reimbursement rates. PBMS may be less willing to negotiate favorable contracts. The DIR changes could also lead to increased competition among pharmacies. With possible lower reimbursement rates and DIR fees occurring at the point of sale, patients will be more likely to shop around for the best price, which will put pressure on pharmacies to compete on price. Read more >

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