National Grocers Association Asks for Pharmacy DIR Fee Review

The National Grocers Association, an Arlington, Va.-based trade association representing the independent grocery industry, has filed comments on a proposed rule from the Centers for Medicare & Medicaid Services (CMS) on pharmacy direct and indirect remuneration (DIR) fees that the organization says will 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," said NGA EVP Greg Ferrara. "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."

Independent grocers operate about 3,000 pharmacies across the country, and NGA members have reported a dramatic increase of 87 percent to 250 percent in pharmacy DIR fees. Meanwhile, CMS reports that pharmacy DIR fees have grown more than 45,000 percent between 2010 and 2017.

“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,” Ferrara added.

NGA is urging Baltimore-based 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 can base their contractual agreements. NGA is also encouraging CMS to implement safeguards that provide for a reasonable reimbursement to pharmacies participating in Medicare Part D. This will help preserve competition in the marketplace for American consumers, according to NGA.