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OVERLAND PARK, Kan.–(BUSINESS WIRE)–#PSAO–Direct and indirect remuneration (DIR) was intended to bring clarity to prescription drug pricing and decrease patient costs, but the lack of transparency within the retroactive fees is creating financial strains for pharmacies and leading to higher prices for patients.

Pharmacies not only have experienced increases in the frequency and total cost of DIR fees, but they also have seen a shift from flat-fee to percentage-based DIRs. These confusing payment methodologies compromise the accuracy of the claim reconciliation process and threaten the stability of many independent pharmacies.

“The use of DIR fees has increased 45,000 percent since 2010,” said Katelyn Lutz, Manager of Pharmacy Programs for Pharmacy First, a pharmacy services administrative organization (PSAO) serving thousands of independent pharmacies across the United States. “Most pharmacy owners attest that DIR fees result in unpredictable cash flow, cause serious issues in anticipating operating revenue, and make it difficult to plan for the future.”

What’s a pharmacy owner to do? Lutz explores the answers in “How DIR Fees Impact the Independent Pharmacy Industry,” a new white paper in which she discusses the evolution and current effects of DIR fees, as well as how the right PSAO can help identify and anticipate their challenges.

For example, Pharmacy First assists pharmacies with DIR fees management through skilled contract negotiations and analyses, robust claim-level reporting, and a range of other support services. They also help pharmacy owners and managers understand operational versus clinical performance measurements, including how those measurements factor into DIR calculation and which has a greater significance for a given pharmacy on a plan-by-plan basis.

With a PSAO that is dedicated to their unique issues, Lutz says, independent pharmacy owners can improve their understanding of DIR fees and prepare more thoroughly. The goal is a more positive result for both pharmacies and patients.

About Pharmacy First

Serving over 2,300 independent pharmacies in the U.S. and Puerto Rico, Pharmacy First provides services and support to keep its members competitive in an evolving market. Pharmacy First eases the administrative overhead of independent pharmacy operations by assisting with credentialing, third-party contract management and reconciliation, quality assurance, medication adherence services and more. For more information, call 800-460-1575 or visit


Adam Lee