SEN. GRASSLEY: Protecting Access to Rural Pharmacies by Ending DIR Fee Clawbacks

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Many Iowans rely on a pharmacist who operates independently or as part of a small community-pharmacy chain. This is especially true in rural Iowa.


We have over 300 independent pharmacists practicing in our state and many work in multiple rural communities.

These are small businesses serving Iowa communities like Muscatine and Sioux City.

These pharmacies want a level playing field to compete with anyone, whether that is a big chain or another independent pharmacy.

Yet, pharmacists I hear from are being hurt by retroactive DIR fees by PBMs and Part D plans. These are sometimes known as clawbacks.

When a senior goes to the drug store, they pay a co-pay.

They believe they are paying the lowest amount possible.

That’s not always the case.

After the patient pays and leaves the pharmacy, their Part D plan or a PBM contacts the pharmacist to claw back a certain amount paid, called a DIR fee.

This action actually lowers the cost of the drug, but the patient doesn’t know it.

Because of these DIR fees, seniors pay more than they need to at the pharmacy.

One Iowa rural pharmacist told me: DIR fee clawbacks are not only costing the patient more in the form of a higher co-pay they are also costing the pharmacy.

From 2010 to 2020, Part D plans and PBMs increased DIR fees by over 104,000 percent.

DIR fees now total over $9 billion a year.

Pharmacists – especially those operating independently in rural Iowa – have told me: if DIR fee clawbacks do not get under control, pharmacies will not survive.

Some have already gone out of business.

This will leave Iowans without access to a local pharmacy for medication therapy management or other care.

I have a bipartisan solution to solve this problem that ends DIR fee clawbacks.

In 2019, the senior senator from Oregon and I negotiated and introduced – the Prescription Drug Pricing Reduction Act, also known as Grassley-Wyden.

Grassley-Wyden ends DIR fee clawbacks.

This will reduce out-of-pocket expenses and provide pharmacies financial predictability.

This move may even keep rural pharmacies viable.

On top of my legislative effort in Grassley-Wyden, I commend CMS for issuing a proposed rule to end DIR fee clawbacks.

I have submitted comments asking CMS to strengthen the proposed provisions as much as possible and finalize the proposed rule without delay.

In addition to ending DIR fee clawbacks, I am committed to passing Grassley-Wyden.

It will lower prescription drug costs in a comprehensive manner and take on Big Pharma.

Beyond ending DIR fee clawbacks, Grassley-Wyden:

  • Caps out-of-pocket expenses,
  • Eliminates the donut hole,
  • Caps rising drug prices at the inflation price index,
  • Brings more sunshine and accountability.

As I said on February 1 – Grassley-Wyden remains our best chance to lower prescription drug costs in a bipartisan manner.

I urge my colleagues to work with me to pass Grassley-Wyden.

Author: Press Release

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