CMS issues final Medicare Part D Rule – DIR fees & price concession reforms included; changes delayed until 2024


Late last Friday (April 29), CMS issued its Final Medicare Advantage and Part D rule, which includes changes to Part D plan contracting with pharmacies – though Part D contracts will not reflect the changes until CY 2024. For your reference, here is the CMS webpage describing the rule, and the 613-page initial (non-Federal Register) release of the final rule. The good news is that the CMS action lays out the details of a concrete, significant step in DIR fees-related reform for which AB and the pharmacy, physician and pharmaceutical industry has advocated for several years.  The downside is that the changes will not be implemented until 2024.

The final rule redefines pharmacy "price concessions" so that they be reflected in the prices presented at the point of sale to Part D enrollees. CMS expects the policy to reduce beneficiaries' out-of-pocket spending by $26.5 billion, or 2%, from 2024 to 2032. The agency also expects Part D to save $46.8 billion and drug companies to save $16.8 billion over the same period. In a significant win for Medicare beneficiaries, AB and the industry, CMS is applying the finalized policy across all phases of the Part D benefit, including the coverage gap. Much remains to be seen the impact of implement of the rule will have on PBM / plan changes to Part D contracts and how they affect beneficiaries and pharmacies, including the impact on pharmacy reimbursements.

While pharmacies, pharmacy associations and patient groups submitted comments in early March to the proposed rule in which they agree with the intent of making Part D plans apply all pharmacy price concessions to drug prices at the point of sale lowering beneficiary out-of-pocket spending and fostering greater transparency for pharmacies, it appears that they are disappointed that the policy does not take effect until 2024.

AB, through GNP/Elevate and SPS, supported implementing the final rule with appropriate and detailed revisions to the proposed rule. We will keep you apprised as AB Government Affairs and Policy and the industry analyzes and reacts to the 613-page final rule.

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