Pharmacy Groups Dismiss Lawsuit After Big Win on DIR

New CMS rule on Part D makes litigation unnecessary, say lead plaintiffs

NCPA June 9, 2022

ALEXANDRIA, Va. (June 9, 2022) The National Community Pharmacists Association and the American Pharmacists Association announced today that they have voluntarily dismissed a lawsuit dating back to the previous administration. The two groups were the lead plaintiffs in the federal case against the secretary of HHS.

“We’ve been fighting in Congress for years to end retroactive pharmacy DIR fees and lower prescription costs for seniors and protect small business pharmacies. We’ve been working with HHS and CMS for years on a regulatory solution, and more than a year ago we strategically filed a lawsuit in case the other two roads were blocked,” said NCPA CEO B. Douglas Hoey, pharmacist, MBA. “We are cautiously optimistic that the new Part D rule satisfies the goals we had for the lawsuit.”

“We’ll be watching closely to see how the rule is implemented and whether PBMs comply or try to game the system. If they don’t, we reserve the right to return to court,” Hoey continued.

“Shutting down our legal challenge doesn’t end our fight for justice for pharmacies from unfair PBM practices,” said APhA Interim Executive Vice President and CEO Ilisa B.G. Bernstein, PharmD, JD, FAPhA.

“We know the final rule benefits patients and increases transparency, but time will tell if it also benefits our nation’s pharmacists,” Bernstein concluded.

NCPA filed the lawsuit in the closing days of the Trump administration after multiple administrations had failed to address retroactive pharmacy DIR fees. They were joined shortly thereafter by APhA and several other plaintiffs.

Pharmacy DIR, which stands for direct and indirect remuneration, is a catchall term used to describe various price concessions required from pharmacies by PBMs in order to participate in the Medicare Part D program. Those concessions have grown by more than 107,000 percent since 2010, according to CMS, and wind up inflating seniors’ share of their prescription drug costs. They are also assessed retroactively, often months after the transaction, making it impossible for pharmacies to keep up with and predict the cost of these transactions. The litigation took aim at the retroactive nature of these fees, which NCPA and APhA hope will end due to the recent changes in CMS policy.

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