Medicare was created in 1966 as a promise to protect our seniors. But the security of aging Americans is increasingly threatened.
Here’s how Medicare Part D is supposed to work: seniors go to the pharmacy of their choosing, exchange their co-pay for medications, and pay a monthly premium toward a Part D insurance plan that is administered by a pharmacy benefit manager (PBM). Unfortunately, big PBMs — the private insurers who sell Medicare Part D plans to seniors — are rigging the system by imposing unfair “direct and indirect remuneration fees,” or DIR fees.
With these DIR fees, PBMs are setting higher upfront prices on prescription drugs – which take larger and larger chunks of cash out of seniors’ pockets. If seniors are not careful, extra fees and higher costs can push them straight into Medicare’s “donut hole,” where they become solely responsible for 100 percent of the costs of the medications upon which they depend.
When seniors get sick, they visit their general practitioner to understand what’s happening with their health, and they are often referred to a specialist to confirm their diagnosis and treat their diseases in a way that addresses their unique needs. Specialty pharmacies are the pharmacy version of being referred to a medical specialist — seniors and their doctors call specialty pharmacies when the complexity of a disease requires more than just a prescription refill.
Specialty pharmacies support seniors struggling with complex, rare, life-threatening or life-changing diseases — including expensive medications to battle cancer, multiple sclerosis, HIV/AIDS, Crohn’s, or Hepatitis C — to make sure they understand their diagnosis, have access to innovative medications, and adhere to each prescription’s instructions. Specialty pharmacies provide seniors with high-touch clinical support throughout what is often months of prescription treatment to ensure they achieve the best medical outcomes.
In addition to providing clinical support for patients, specialty pharmacies also negotiate directly with drug manufacturers and insurance companies to secure financial assistance to keep prices as low as possible for seniors.
But now, all these services for seniors are endangered. For specialty pharmacies that dispense more high-cost medications, the DIR fee clawback results in reimbursement that is less than the actual cost of the medication — an economic loss to the specialty pharmacy before it even begins to provide any supportive patient services.
Since many of the diseases treated by high-cost specialty medications are age-onset related, it’s seniors on Medicare who will be the ones to suffer if they lose access to the high-touch care and coordination provided by specialty pharmacies. And despite PBM claims, there is no evidence that DIR fees are reducing costs or expanding services for seniors.
Many organizations in the medical and pharmaceutical communities are speaking out against these DIR fees, including not only the National Association of Specialty Pharmacy (NASP), but also the National Community Pharmacists Association (NCPA), and the Community Oncology Alliance (COA).
Thankfully, there are bipartisan, bicameral plans in Congress to put a stop to the way PBMs are levying DIR fees, including companion legislation that has already been introduced to provide much-needed transparency: H.R. 1038 and S.B. 413, both known as the Improving Transparency and Accuracy in Medicare Part D Spending Act.
At the end of the day, these ambiguous fees drive up costs for seniors, taxpayers, and the healthcare professionals that serve this unique set of patients, making it harder and harder for us to deliver the kind of care that seniors deserve. Left unchecked, these fees will ultimately roll back services and reduce choices for seniors across the board. Because if PBMs continue levying DIR fees, specialty pharmacies and others may be forced to decrease the number and length of services for seniors on Medicare.
Medicare Advantage was set up to encourage competition so that seniors have access to the best possible care. It’s time for the Centers for Medicare and Medicaid (CMS) and Congress to stop big PBMs from rigging the Medicare system, and driving up health care costs for seniors and taxpayers. PBMs need to open the “black box” of information and show us what’s inside. Only then can we have an honest and transparent conversation to reduce drug costs for seniors, patients and caregivers nationwide.
The views expressed by contributors are their own and are not the views of The Hill.