Changes to DIR Fees Featured in CMS' Proposed Rule for 2020

Changes to DIR Fees Featured in CMS’ Proposed Rule for 2020

On Monday, Nov. 26, 2018, the Centers for Medicare & Medicaid Services (CMS) released their proposed rule for 2020 titled Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses.

The proposed rule supplements President Trump’s Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs that was released in May 2018 which outlines goals for improved competition, better negotiation, incentives for lower list prices, and lowering out-of-pocket costs.

One of the components of CMS’ proposed rule are the changes to pharmacy price concessions, also known as DIR fees.

CMS wants to re-define a pharmacy’s negotiated price as the lowest possible payment a pharmacy could receive for a Part D drug. Requiring the lowest possible reimbursement would make the point-of-sale price more accurately reflect the pharmacy’s true reimbursement – thus eliminating retroactive DIR fees.

With DIR fees included in the negotiated price, CMS is predicting that beneficiaries would save $7.1 to $9.2 billion over 10 years. Manufacturers would also save about $4.9 to $5.8 billion over that span.

You can read about other proposed measures such as Part D e-prescribing standards, protected classes in Part D, and more in this overview from NCPA and fact sheet from CMS.

Currus will continue to work with NCPA, IPC, and other national partners to push for changes in advance of the final 2020 rule, which is anticipated to be released in mid-spring of 2019.