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Tools to Help Reduce Pharmacy DIR Fees

A pharmacy’s revenue depends heavily on prescription sales - in fact, these sales make up over 90% of total sales, and over half sold in the United States are covered by Medicare Part D and Medicaid.

What can hinder these profits are Direct and Indirect Remuneration (DIR) fees - as they cut into the profit margins and present a big challenge for independent pharmacies around the nation.

How DIR Fees Affect Pharmacies

The problems that DIR fees bring to independent pharmacies are not new. In the beginning stages of the COVID outbreak, 75% of independent pharmacies reported that DIR fees were a strain on finances. An NCPA report discovered that pharmacies have had to pay upwards of $8.5 billion in DIR fees to Pharmacy Benefit Managers (PBM) and health plans for the last 8 years.

DIR fees’ original purpose was meant to account for the true medication cost of Medicare Part D plans. But now, they encompass a wide range of fees that are charged to pharmacies - from performance-based fines to new membership costs.

Some other fees include:

Maximum costs allowed for controlled ingredients

Pharmacies have a hard time predicting when or how their business will be affected because DIR fees are assessed during adjudication and up to 9 months after it by health plans.

Increasing Pharmacy Profits

What DIR fees mainly cut into are pharmacies’ reimbursement rates, which limits revenue and cuts down on profit margins in an atmosphere where drug costs are continually rising. Independent pharmacies can counter these fees by dialing in on ways they can increase profit margins, like:

● Reducing labor costs by automating certain tasks

● Promoting medical adherence/PDC scores

● Increasing the base for patient prescriptions

● Offering specialty products/services unrelated to prescriptions

Now more than ever, the use of digital tools is what drives innovation in any type of business - pharmacies included. Utilizing telehealth, digital refills, and mobile health apps not only helps consumers manage their health, but it also helps you connect with them on multiple platforms and engage your customer base.

If you leverage this use of digital, your pharmacy can increase efficiency, reduce overhead costs, and increase profitability. Using digital tools will also automate tasks that are routine and repetitive, streamline workflows, and promote medical adherence. If your pharmacy embraces digital, you’ll also appeal to a wider audience.

Digital Tools to Increase Profits

There is a wide array of digital tools available on the market, but your pharmacy’s toolkit should be unique to your business to help you automate operations and serve your specific patients. You can use solutions like:

Direct Secure Messaging

○ This engages patients and also helps with patient retention, as it connects pharmacists with their patients in a way that is HIPAA-compliant and convenient all at once.

Interactive Voice Response (IVR)

○ IVR helps to manage incoming calls using visual voicemail, after-hours settings, and auto attendants, this system can reroute calls to their specific landing place, save messages, and process prescription refills. This gives your staff time to complete other tasks that take more complicated thought.

Branded Healthsite and Mobile App

○ This is how your patients can find out about your online services and stay connected, as these things provide a HIPAA-compliant platform where patients can manage their health and give you business even while outside the store.

Your Pharmacy

By using these tips, you’ll be able to cut down on DIR fees and help your independent pharmacy see increased profitability. It may not happen overnight, but you’re sure to see positive results from working with these methods.


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