Who’s to blame for high drug prices? Most wouldprobably point the finger at Big Pharma, but a group representingpharmacists say that a big part of the problem is middlemenempowered by insurance companies.

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“Direct and indirect remuneration fees imposed on communitypharmacies and increased costs for patients at the pharmacy counterthrough copay clawback fees” are the two main issues driving up the cost of meds atneighborhood drug stores, says a report from the Alexandria,Virginia-based National Community Pharmacists Association.

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Both problems, says the group, are driven by pharmacy benefitmanagement companies. Such companies are increasingly hired byhealth insurers to overseetheir prescription drug benefits.

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Direct and indirect remuneration fees known as DIR fees areoften imposed on pharmacies long after the prescription was made.According to the group, the fees can turn a “modest profit into afinancial loss” for the pharmacist.

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President and CEO of the Pharmaceutical Care ManagementAssociation, Mark Merritt, responded to criticism of the DIR feessaying, “Direct and Indirect Remuneration (DIR) is a form ofperformance-based payment used by PBMs to promote value and qualityand helps keep premiums down for Medicare beneficiaries. Theindependent drugstore lobby agenda on DIR would increase costs andreduce access to affordable medicines for Medicare enrollees. Lowercost preferred pharmacy plans, which have been chosen by 75 percentof Part D enrollees, have become the very foundation of MedicarePart D. It makes little sense for lawmakers to put these popularplans at risk."

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What drives the pharmacists crazy, however, is that often thefee imposed is unpredictable and seemingly arbitrary. In a surveyof 640 pharmacists conducted by the group, two-thirds say that theyreceive no information about when the fee will be collected and howlarge it will be.

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Eighty-seven percent of the surveyed pharmacists say that DIRfees significantly affected their ability to run a business andprovide care to patients.

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Pharmacy benefit management companies defend the DIR feesas pay-for-performance. High-performing pharmacies are assessedsmaller fees. The fact that all pharmacies have to pay some sort offee, however, undercuts the argument that it is incentive pay,argues the pharmacists association.

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In addition, pharmacists say that pharmacy benefit managers makebig money through “clawback fees,” a fee imposed on top of thepatient’s copay that often leaves the patient paying more for aprescription than if the drug were purchased at cash price.

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The pharmacist is obligated to collect the additional fee, whichthe pharmacy benefit manager later collects. Furthermore, pharmacybenefit managers often impose “gag clauses” that prohibitpharmacists from telling customers that the drug would be cheaperif purchased without insurance.

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According to the survey, 83 percent of pharmacists have seenclawback fees occur at least 10 times in the last month. And manysay they have seen the practice happen for both commercial plansand Medicare Part D plans.

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"PBM corporations are inserting costs into the system onvirtually everyone in order to fuel their profits and rewardshareholders,” saysDouglas Hoey, CEO of the pharmacistsassociation. “Government officials and health plan sponsors mustinsist on greater transparency and oversight of these practices toensure that plan costs and premiums go to their intended purpose:taking care of patients.”

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