Wyden Urges CMS to Ease Financial Strain on Independent Pharmacies, Medicare Beneficiaries

Washington, D.C.— Senate Finance Committee Chair Ron Wyden, D-Ore., last week sent a letter urging the Centers for Medicare and Medicaid Services (CMS) to finalize the proposal that applies all pharmacy price concessions, known as direct and indirect remuneration (DIR) fees, to drug prices at the point of sale in Oregon and nationwide.

“CMS must take the next step in finalizing the proposal to move all pharmacy DIR to the point of sale in a reasonably expedient manner and without any compromises. Doing so will meaningfully ease the financial strain on thousands of independent pharmacies and millions of Medicare beneficiaries across the nation,” Wyden wrote. “By constraining these out of control fees and requiring additional transparency, this action will help communities that count on these pharmacies for access to medicine and quality local service.”

In his letter, Wyden highlighted that pharmacy DIR fees grew more than 107,400 percent between 2010 and 2020. Pharmacy DIR fees applied after the point of sale artificially inflate patients’ out-of-pocket costs for Part D drugs.

The rise of these fees in addition to the lack of transparency in their application to pharmacy reimbursement resulted in both the closure of hundreds of pharmacies in communities across the country -and higher prescription drug costs for patients. These closures result in increasing financial uncertainty for pharmacies, which is particularly problematic for small and independent pharmacies, often in rural and underserved areas of Oregon and nationwide. In some rural, frontier Oregon communities like Condon or John Day, the nearest chain pharmacy may be more than an hour’s drive away.

Requiring DIR fees to be applied at the point of sale will reduce seniors’ out-of-pocket prescription drug costs by $21.3 billion over 10 years.

Wyden also strongly urged CMS to conduct a formal review of pharmacy closures in the US in the last five years.

The full text of the letter is here.

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