This week I want to offer you an illustrative video “Pharmacoeconimics” prepared by a pharmacy owner – Loren Pierce – describing how DIR fees are killing his business.

In the video, Loren explains and shows his financial reports illustrating that in:

  •  2017, the pharmacy paid a total of $212,000 (1.2% of sales) in DIR fees;

  •  2018, $642,000 (3.8%); and

  • January, 2019, PBMs withheld $76,000 in DIR fees, which constituted 5.1% of his total sales.

If you are a pharmacy owner, your DIR reports show similar numbers. DIR fees are rising without any justification and proper accounting.

PBMs explain that DIRs are mandated by federal requirements to lower medication cost and improve adherence. However, DIRs are not accomplishing these goals. Medication costs are still rising and PBMs report increased profits each year. Independent pharmacies – on the other hand – are going out of business or sell files to chains who can absorb the loss due to the volume. Many pharmacies are facing a dilemma: to accept these PBM contracts reimbursing below cost or turn away Medicare beneficiaries, who constitute a large chunk of business. The video could be accessed here.