Earlier this year, the National Community Pharmacists Association (NCPA) filed a federal lawsuit against the U.S. Department of Health and Human Services (NCPA vs. Azar) over regulations that enable pharmacy direct and indirect remuneration (DIR) fees, long one of the greatest challenges for independent pharmacies. The lawsuit claims that the fees lack appropriate transparency and they obscure the true cost of prescription drugs to patients and taxpayers.

“Pharmacy clawbacks are fundamentally dishonest and unfair for patients and pharmacies, and they make it impossible for pharmacies to predict their costs,” said NCPA CEO Douglas Hoey. Pharmacy benefit managers (PBMs), which administer drug benefits for health insurers, can claw back fees weeks or months after a prescription has been dispensed, sometimes reducing the reimbursement to less than the cost of acquiring the drug.

That has created an untenable situation for a growing number of pharmacies. “Sixty percent of community pharmacies believe they may go out of business in the next two years if the clawbacks are not addressed.”

The loss of so many pharmacies would have a devastating impact on American healthcare. Not only do 90% of the population live within 5 miles of a community pharmacy, on average, Americans see their local pharmacist 12 times more often than their physician. In many locations, the independent pharmacist is the only healthcare provider available in the nearest town, as nearly 80% of community pharmacies are in areas with fewer than 50,000 residents.

“NCPA and others have pursued a fix through the regulatory and legislative processes for years,” Dr. Hoey said. “We have exhausted those options and unfortunately, small business independent pharmacies cannot wait any longer.”

In its filing, NCPA argued that an exception to a Centers for Medicare & Medicaid Services rule that allows pharmacy benefit managers (PBMs) to impose price concessions long after the prescription is dispensed violates the language and intent of the Medicare law. Further, the suit claims that adding the exception to the final rule without providing notice or permitting a comment period violated the legal process for proper rulemaking.

PBMs used that exception to increase DIR fees 1600% from 2015 to 2017. Current estimates put pharmacy DIR fees at more than $9 billion in 2019.

"PBMs force pharmacists to make an impossible choice: pay the concessions or lose your patients,” said Dr. Hoey. “PBMs have been exploiting the loophole to extract billions from pharmacies without any benefit for patients. Our backs are against the wall, and we won't stop fighting until we win."

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