National Grocers Association Calls for Review of Pharmacy DIR Fee Structure

January 29, 2019

Arlington, VA- The National Grocers Association (NGA), the national trade association representing the independent supermarket industry, filed comments on a proposed rule with the Centers for Medicare & Medicaid Services (CMS) on pharmacy Direct and Indirect Remuneration (DIR) fees that negatively impact the independent supermarket industry.

“NGA commends the Administration and CMS for proposing regulations that will begin to rein in and bring transparency to the pharmacy DIR fees and appreciates the opportunity to provide comments on the proposed rule. NGA members have seen pharmacy DIR fees grow exponentially over the past number of years for no apparent reason, effectively fleecing thousands of locally-owned pharmacies and consumers,” said Greg Ferrara, NGA Executive Vice President. “Independent supermarket pharmacies provide a critical service to millions of American consumers, many of whom are in rural and small-town America. These actions are a first and important step toward reining in these out of control hidden fees, while also providing important reforms to help preserve competition in the marketplace for American consumers.”

Independent supermarkets operate 3,000 pharmacies across the country and pharmacy DIR fees have had a significant impact on their ability to serve their communities. Recently, NGA members have reported a dramatic increase between 87 percent and 250 percent in pharmacy DIR fees. CMS reports that pharmacy DIR fees have grown more than 45,000 percent between 2010 and 2017.

NGA is urging CMS to move pharmacy DIR fees to the point of sale and develop or approve a set of performance metrics on which plans and pharmacies base their contractional agreements. NGA is also encouraging CMS to implement safeguards that provide for a reasonable reimbursement to pharmacies participating in Medicare Part D. This helps preserve competition in the marketplace for American consumers.

View NGA comments HERE