05.10.22

Lankford Celebrates Win in Demand for Action to Address Prescription Drug Costs for Oklahoma Seniors, Pharmacies

WASHINGTON, DC  – Senator James Lankford (R-OK), a member of the Senate Finance Committee with jurisdiction over the Centers for Medicare and Medicaid Services (CMS), celebrated a huge win for Oklahoma seniors and local pharmacies as Medicare officials finalized sweeping changes to Medicare Advantage and Medicare Part D plans for seniors. Part of this now-final rule from CMS mimics plans for lowering out-of-pocket drug costs for Medicare beneficiaries for which Lankford has advocated for several years. In January, Lankford celebrated the rule’s proposal.

“I can’t overstate how important this is to our local and family-owned pharmacies in Oklahoma. This rule aims to fix the number-one problem I hear about from local Oklahoma pharmacies. After years of me pushing the Centers for Medicare and Medicaid Services to take action, CMS is finally addressing the litany of red tape in the drug pricing process,” said Lankford. “This important change will provide our local pharmacies more of the clarity they need to offer drugs at a price their patients can afford since the price-gimmick haggling will be drastically reduced before it gets to them. We are slowly unraveling the process by which prescription drugs have become so expensive in our nation. There is still work to be done, but this is a big win for patients and independent pharmacies.”

Background

In October 2021, Lankford sent a letter to CMS calling on them to either work with Congress to eliminate “direct and indirect remuneration” (DIR) fees to help lower prescription drug prices for Medicare Part D beneficiaries or to take administrative action to address the problem. CMS’s final rule will do just that by essentially eliminating DIR fees through requiring all price concessions to be passed through to the consumer, beginning in 2024. These reforms are estimated to save seniors over $21 billion in the next decade. This change is one success of hopefully many to come from that call to action.

Lankford has repeatedly called out abusive practices of pharmacy benefit managers (PBMs), who act as middlemen between pharmacies and insurers, in the negotiation of the final price of a prescription drug. One of these harmful practices is the issuing of retroactive DIR fees, which are clawback fees required sometimes several months after a pharmacy dispenses a drug to a patient. These fees range in size and timing, causing local pharmacies great uncertainty and driving up seniors’ out-of-pocket drug costs. According to CMS, DIR fees have increased more than 107,400 percent between 2010 and 2020. This has contributed to the closing of hundreds of independent community pharmacies.

Lankford has worked for years to pursue workable solutions to lower prescription drug costs. Last May, Lankford introduced the Pharmacy DIR Reform To Reduce Senior Drug Costs Act, which would end DIR fees by ensuring that all drug discounts and rebates that go into a drug’s negotiated price are reflected at the pharmacy counter. In 2019, he penned an op-ed in Modern Healthcare to talk about some of those solutions geared toward market-based proposals that can actually pass through Congress. The op-ed focused on PBMs the drug middlemen, in the pricing process and was reinforced in a follow-up piece in Oklahoma’s Journal Record by David L. Holden, a board-certified orthopedic surgeon and past president of the Oklahoma County Medical Society. 

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