Tester Leads Bipartisan Push to Lower Prescription Drug Costs

29 colleagues join Senator in calling for an end to increasing fees; Effort is expected to reduce costs by $21.3 billion over 10 years

As a part of his continued effort to lower the cost of prescription drugs for Montanans, U.S. Senator Jon Tester this week led a bipartisan effort along with 29 Senators in requesting that the Centers for Medicare and Medicaid Services (CMS) finalize its proposed rule to stop all retroactive direct and indirect remuneration (DIR) fees, which is expected to reduce seniors’ out-of-pocket prescription drug costs by $21.3 billion over 10 years.

“Everywhere I go, I hear about rising drug prices and the increasing cost of life saving medications,” said Tester. “Corporate middlemen are charging Montana’s small pharmacies with hidden fees, driving up costs for Montana seniors and families, and folks need relief now. I’m glad the Administration has agreed to work with me to lower costs, but we need to finalize this new rule immediately so we can protect Montana patients and pharmacies.”

In December 2021, CMS agreed to help lower prescription drug costs for Medicare Part D beneficiaries by taking action to address DIR fees. CMS has since been drafting a rule to stop DIR fees, which has not been finalized.

Under Medicare Part D, pharmacy middlemen require additional payments from pharmacies after the drug is sold to the patient that changes the final cost of the drug. These are called DIR fees.

In recent years, these middlemen have increasingly returned to pharmacies days or even months after the final sale to demand more in DIR fees. From 2010 to 2020, CMS documented a 107,400 percent increase in DIR fees paid by pharmacies.

Tester pushed hard for CMS to take administrative action after introducing bipartisan legislation last year to combat the high cost of prescription drug prices and the predatory practices of corporate middlemen known as Pharmacy Benefit Managers (PBMs). Tester’s legislation, the Pharmacy DIR Reform to Reduce Senior Drug Costs Act, would ensure that all DIR fees are made clear at the point of sale, eliminating the retroactive nature of DIR clawback fees. CMS estimates this change will save seniors on Medicare an estimated $21.3 billion over ten years.

The Senators’ full letter can be HERE.