MedPAC released its June 2023 report to Congress, which includes a chapter on analyzing DIR fees in Medicare Part D. MedPAC stated that between 2010 and 2021, DIR fees ballooned 629% from $8.6 billion to $62.7 billion, expanding as a share of gross Part D spending from 11 percent to 29 percent. MedPAC also found that for some drug categories, costs net of manufacturer rebates were higher at vertically integrated (VI) pharmacies, particularly when those prescriptions were filled for their own VI plans, as compared to non-VI pharmacies. MedPAC said this was consistent with its hypothesis that VI plans/PBMs financially benefit from higher gross payments to their VI pharmacies and. In over 70 percent of the cases, average net plan costs were the highest at VI plan–pharmacy networks — meaning that vertical integration may have resulted in higher costs to Part D and their plan enrollees.
Want to learn more about the DIR hangover? NCPA has the resources you need, including this handy infographic detailing vertical integration of health care, not to mention this one on the history of PBM mergers.
