Arlington, VA – Today, FMI – The Food Industry Association welcomed the U.S. Centers for Medicare and Medicaid Services’ (CMS) announcement of a final rule on Medicare Part D that would lower point-of-sale drug costs for consumers while also providing pharmacies with greater price transparency. Even though the rule does not go into effect until 2024, FMI anticipates this regulation will significantly reign in the ability of pharmaceutical middlemen, known as pharmacy benefits managers (PBMs), to assess hidden “claw back” fees that have caused pharmacies to shutter their doors and patients to expend more money at the pharmacy counter.
These payments, known as direct and indirect remuneration (DIR) fees, were designed to be applied at the point-of-sale to reduce the cost of prescription drugs for Medicare beneficiaries. However, PBMs frequently “claw back” DIR fees from pharmacies long after a drug has been dispensed to the customer. Furthermore, these fees are rarely used as intended to reimburse or otherwise reduce the cost of a drug and have grown by more than 107,000% since 2010, according to the federal government.
FMI President and CEO Leslie G. Sarasin made the following statement regarding the final rule:
“FMI is pleased CMS has heard our long-held concerns about predatory PBM practices like retroactive DIR fees and determined that regulatory action is desperately needed to reduce drug costs for patients and to provide greater certainty for pharmacies so that they can remain in business and continue serving their customers. However, even as we applaud these important reforms, we also believe the Biden administration missed an opportunity to provide swift relief to consumers and pharmacies alike by delaying the implementation of this rule until 2024.
“Supermarket pharmacies are proud to serve as health and well-being destinations, providing customers with the full range of pharmacy products and services – including COVID-19 tests and vaccines – at the same location where they already purchase nutritious food and other household items. Despite their essential role in serving communities, particularly during the last two years amid the pandemic, supermarket pharmacies have struggled to stay in business or grow their pharmacy operations, especially in underserved areas, due to the anticompetitive practices of PBMs. Some FMI members have been forced to close or sell their pharmacies due to exorbitant DIR fees, leading to significantly reduced access for consumers.
“FMI thanks CMS for its leadership in finalizing these much-needed regulatory reforms, and we look forward to working with the agency to continue addressing other PBM practices that are harmful to both patients and pharmacies alike."
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