# Understanding the Pharmacy DIR Reform Bill

This bill tackles a hidden problem in how Medicare prescription drug plans work. Right now, when you pick up a prescription at the pharmacy, the price you see at checkout doesn't tell the whole story. Insurance companies and pharmacy benefit managers negotiate secret deals with pharmacies that happen after you've already paid—things like discounts, fees, or bonuses based on how well the pharmacy performs. The problem is that pharmacies often don't know about these behind-the-scenes arrangements, and seniors end up paying higher copays at the register because the negotiated discounts aren't reflected in the price shown to you.

The bill fixes this by requiring that all price negotiations between insurance companies and pharmacies be included in the actual price you see when you buy your medication, starting in 2022. Instead of hidden deals happening after the sale, everything gets factored into what you pay upfront. The bill also requires insurance companies to tell pharmacies about any payments or fees that happen after the initial transaction, so pharmacies understand the full picture of how they're being paid. This transparency is supposed to help pharmacies make better decisions and ultimately lead to lower drug costs for seniors.

Additionally, the bill establishes standardized rules for how insurance companies can reward or penalize pharmacies based on performance. Rather than each insurance company making up their own measures, the government will create a single list of fair, evidence-based standards that focus on things pharmacies can actually control—like patient health outcomes and medication management. This prevents insurance companies from using confusing or unfair performance metrics to squeeze pharmacies into accepting lower payments, which could otherwise get passed along to patients through higher costs.

Pharmacy DIR Reform To Reduce Senior Drug Costs Act

Welch, Peter

Pharmacy DIR Reform To Reduce Senior Drug Costs Act This bill establishes certain requirements for prescription drug plans and the prices of covered drugs under the Medicare prescription drug benefit. Specifically, the bill requires price concessions, payments, and fees that are negotiated with a pharmacy to be included in a drug's negotiated price, excluding incentive payments, and for this price to be provided at the point of sale. Additionally, prescription drug plans must report price concessions or incentive payments that are made after payment for covered drugs at the point of sale, including by contracted intermediaries, to the pharmacy at least annually. The Centers for Medicare &amp; Medicaid Services must establish standardized pharmacy performance measures with respect to incentive payments and price concessions; such measures must account for all pharmacy types, including specialty pharmacies, and focus on patient health outcomes and other targeted areas.