DIR Fees

One issue affecting profitability more than anything else is the DIR fee.  While DIR fees were originally rolled out to decrease cost to the patient and the Federal Government under Medicare Part D, they have evolved to do far more harm than good.  In fact, many high-grossing retail pharmacies, ARE NOT MAKING A DIME after PBM claw-backs.

While DIR Fees can be somewhat complicated to understand, a recent article from APhA describes it best.

“There’s lots of attention to DIR fees in the pharmacy world, but one of the big changes in the last year is the attention to DIR fees outside of the pharmacy world—in the media and legislatively, a lot more people are aware of these things called ‘DIR fees,’ ” said B. Douglas Hoey, RPh, MBA, CEO of the National Community Pharmacists Association (NCPA).

DIR fees refer to price concessions not reflected at the point of sale (POS) for pharmacies participating in Medicare Part D networks. Assessed weeks or months after Part D beneficiaries’ prescriptions are filled, the retroactive fees complicate decisions about staffing and whether to expand or even keep open a business. Pharmacies may not realize until long after a prescription is filled that they didn’t even recoup their costs.

“One way I describe DIR fees to people outside of pharmacy is a broken payment promise. A pharmacy is told it will be paid a certain amount, and then months later the payer says, ‘We’re not actually going to pay you that. We’re actually going to take money away from you,’ ” Hoey said.

Luckily, there is hope. In a recent article from , we see how pharmacies from across the spectrum are coming together to push back on PBM’s to reduce the Out-of-Pocket expenses for Part D recipients.