Source: United States Senator for Oklahoma James Lankford
01.18.22
OKLAHOMA CITY, OK – Senator James Lankford (R-OK), a member of the powerful Senate Finance Committee with jurisdiction over the Centers for Medicare and Medicaid Services (CMS), celebrated a huge win for Oklahoma seniors and local pharmacies as Medicare officials announced a proposal for sweeping changes to Medicare Advantage and Medicare Part D plans for seniors. Part of this new proposal from CMS mimics plans for lowering out-of-pocket drug costs for beneficiaries on which Lankford has advocated for several years. Today, Lankford visited United Pharmacy in Yukon, OK, to learn more about how this win will impact local, family-owned pharmacies.
“The change I demanded from CMS that is now in motion for 2023 is a huge win for Oklahoma seniors on fixed incomes who are paying more and more for their life-saving drugs,” said Lankford. “This is a big deal for our small and family-owned pharmacies, especially in rural areas of the state, that face constant uncertainty in how much they have to charge for drugs to keep their doors open. This is the number one problem I hear about when I speak with local Oklahoma pharmacies. Oklahomans know setting drug prices is complex. Costs from research, shipping, and rebates negotiated with the drug companies, middlemen, and insurers are all layered on top of each other to set what you pay at your local pharmacy. This change helps untangle one part of that process so you and your pharmacist know more upfront what a drug will cost you.”
The Oklahoma Pharmacists Association (OPhA) applauds the Biden Administration for initiating action to regulate direct and indirect remuneration (DIR) fees.
“DIR fees are one of the many reasons our local pharmacies lose money on a daily basis,” Chris Schiller, President of OPhA and Muskogee pharmacist. We will continue to fight to protect the rights of our members and do what is best for all Oklahomans.”
“The devastating impact of DIR fees cannot be overstated. The forced insolvency brought on by DIR fees over the last decade has caused the closure of thousands of community pharmacies and has contributed to a critical loss of intimate and responsive healthcare across the nation. Senator Lankford has worked tirelessly in understanding and correcting these abusive policies, eradicating DIR fees and supporting the fragile health infrastructure that is community pharmacy,” said Dr. Kathy M. Campbell, PharmD, Medicap Pharmacy in Owasso.
Background
In October 2021, Lankford sent a letter to CMS calling on them to either work with Congress to eliminate “direct and indirect remuneration” (DIR) fees to help lower prescription drug prices for Medicare Part D beneficiaries or to take administrative action to address the problem. CMS’s proposed rule will do just that by essentially eliminating DIR fees through requiring all price negotiations to be passed through to the consumer, beginning in 2023. These reforms are estimated to save seniors over $21 billion in the next decade. This change is one success of hopefully many to come from that call to action.
Lankford has repeatedly called out abusive practices of pharmacy benefit managers (PBMs), who act as middlemen between pharmacies and insurers, in the negotiation of the final price of a prescription drug. One of these harmful practices is the issuing of retroactive DIR fees, which are clawback fees required sometimes several months after a pharmacy dispenses a drug to a patient. These fees range in size and timing, causing local pharmacies great uncertainty and driving up seniors’ out-of-pocket drug costs. According to CMS, DIR fees have increased more than 107,400 percent between 2010 and 2020. This has contributed to the closing of hundreds of independent community pharmacies.
Lankford has worked for years to pursue workable solutions to lower prescription drug costs. Last May, Lankford introduced the Pharmacy DIR Reform To Reduce Senior Drug Costs Act, which would end DIR fees by ensuring that all drug discounts and rebates that go into a drug’s negotiated price are reflected at the pharmacy counter. In 2019, he penned an op-ed in Modern Healthcare to talk about some of those solutions geared toward market-based proposals that can actually pass through Congress. The op-ed focused on PBMs the drug middlemen, in the pricing process and was reinforced in a follow-up piece in Oklahoma’s Journal Record by David L. Holden, a board-certified orthopedic surgeon and past president of the Oklahoma County Medical Society.
Because of Lankford’s persistency, this is all finally being fixed.
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Photo: Lankford is pictured with the staff of United Pharmacy in Yukon, Oklahoma
For more information about Senator Lankford, visit: www.lankford.senate.gov.