Brown Wrote to CMS in October Requesting They Act
WASHINGTON, D.C. – December 16, 2021 – Today, U.S. Senator Sherrod Brown (D-OH) announced that Chiquita Brooks-LaSure, Administrator of the Centers for Medicare and Medicaid Services (CMS) has committed to action to address direct and indirect remuneration (DIR) fees, which increase costs for older Ohioans at the pharmacy counter and make it harder for local pharmacies in Ohio to serve their communities.
“Pharmacy middle-men should be passing along their negotiated discounts to consumers, not pocketing the difference to pay their CEOs more. I am glad the Centers for Medicare and Medicaid has agreed to take action to address this issue and provide relief to seniors and the pharmacies that serve them,” Brown said. “At the same time, we can’t forget that it’s drug companies who set the prices and I’m going to keep fighting to put an end to their price gouging.”
In her letter, Administrator Brooks-LaSure stated, “The agency has continued to study the role that pharmacy price concession fees play in the prescription drug marketplace. CMS agrees that the significant growth in DIR amounts is troubling and is planning to use our administrative authority to issue proposed rulemaking addressing price concessions and DIR.”
Brown has led efforts in the Senate to lower drug prices and increase transparency with pharmacy benefit managers (PBMs) and support community pharmacies and the patients they serve.
In October, Brown alongside Senators Jon Tester (D-MT), Shelley Moore Capito (R-WV), and James Lankford (R-OK), sent a letter urging CMS 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 take administrative action to address the problem. CMS committed to taking action in its response to the Senators’ letter.
In 2019, Brown secured the inclusion of key provisions in the bipartisan drug pricing bill that passed out of the Senate Finance Committee to increase transparency requirements for PBMs and ban the predatory practice of “spread pricing.” Building on this progress, Brown introduced bipartisan legislation in June 2021 to protect consumers and small businesses by holding PBMs accountable for retroactively assessing fees on pharmacies. The Pharmacy DIR Reform to Reduce Senior Drug Costs Act would ensure that all pharmacy price concessions are assessed at the point of sale and eliminate the retroactive nature DIR clawback fees imposed by PBMs. The Centers for Medicare and Medicaid Services (CMS) estimates this change will save Medicare beneficiaries an estimated $7.1 to $9.2 billion in reduced cost sharing as a result of this policy change.