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The Future of Direct and Indirect Remuneration (DIR) Fees and How They Affect Pharmacy
What are they??
Direct and indirect remuneration fees, also known simply as DIR fees, were created by the Centers for Medicare and Medicaid Services (CMS) as a way to monitor manufacturer rebates and other price modifications, among other things. DIR fees morphed from what was supposed to help Medicare plans receive money back into something that makes independent pharmacy owners cringe at the thought. The problem is that while before these fees came about, pharmacy owners could predict their revenue and profits but now these business owners must take a shot in the dark and still might end up estimating incorrectly.
"Both retail and specialty pharmacies are affected by DIR fees. The fees create losses in revenue that, at times, may surpass the acquisition cost of the drug itself. Basically, DIR fees can create a situation in which pharmacies are losing money they process a claim through Medicare Part D. PBMs argue that DIR fees lower drug costs and allow for savings. They even call DIR fees 'pay for performance.' This term is misleading, as many times the fee is applied no matter what happens. The fee is adjusted up or down according to performance of the pharmacy or the copay of the insured."
-White Paper: DIR Fees Simply Explained
Specialty Pharmacy Times, October 2017
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