I just read a thought provoking blog on high priced new drugs. The author, a hospital pharmacist, is faced with the issue of how her institution can afford to treat patients with a new drug that promises profound increases in quality of life, but at astronomical prices.
(Note – I am not personally endorsing or failing to endorse the Campaign for Sustainable Rx Pricing that Dr. Duty mentions in her blog. I don’t know enough about the organization to have an opinion one way or the other.)
Prescription drug pricing and reimbursement are complicated and confusing as it is. DIRs have only made them more so. And much more painful for community pharmacies.
What are DIRs?
DIR stands for Direct and Indirect Remuneration. The term was initially used by the Centers for Medicare and Medicaid Services (CMS) to refer to all price concessions which PBMs and plan sponsors (insurance companies, HMOs, chains and PBMs offering Medicare Part D plans) receive for Part D prescription drugs that were not included in the point of sale transaction (i.e., when the drug was dispensed to the patient and the charge sent to the plan sponsor or PBM). CMS reconciles payments to plan sponsors at the end of each year and one of the reconciliation involves reducing plan reimbursements by the amount of the DIRs received by plan sponsors.