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Hy-Vee Advocates for Immediate Reform of Pharmacy DIR Fees that Raise Drug Costs for Senior Citizens

Hy-Vee, Inc. today expressed dismay that a new Medicare rule did not provide relief from pharmacy direct and indirect remuneration (DIR) fees that inflate senior citizens’ prescription drug costs.

May 23, 2019 | News & Press Releases

WEST DES MOINES, Iowa (May 23, 2019) — Hy-Vee, Inc., today expressed dismay that a new Medicare rule did not provide relief from pharmacy direct and indirect remuneration (DIR) fees that inflate senior citizens’ prescription drug costs. A proposal advanced by the Centers for Medicare & Medicaid Services (CMS) and supported by Hy-Vee was not included in the final rule published on May 17, 2019.

Hy-Vee issued the following statement from its Chairman, CEO and President Randy Edeker:

“Today, Hy-Vee is urging lawmakers to support immediate action to reform the use of pharmacy direct and indirect remuneration (DIR) fees, also known as pharmacy price concessions, in the Medicare Part D program. We are shocked that the final rule published on May 17, 2019, by the Centers for Medicare & Medicaid Services (CMS) did not include this much-needed reform, despite countless meetings and discussions. We find it outrageous that DIR fee relief was not included in this year's rule, because it is absolutely critical for the sustainability of pharmacies across the U.S. to meet the needs of our patients.

CMS has acknowledged that DIR fees have skyrocketed 45,000 percent since 2010 and in some cases, DIR fees have tripled since just last year. These fees are being inappropriately used by Medicare Part D plans and their pharmacy benefit managers (PBMs) to claw back reimbursements from pharmacies for the prescription medications that they provide to Medicare beneficiaries. We believe CMS should act to stop a practice that is not legal under current rules. If action is not taken, it inflicts even more of a catastrophic burden on our customers and our pharmacies.

Pharmacies are closing every day because of the increasing use of these fees – leaving senior citizens with no access to a pharmacy for their medications. Hy-Vee cannot be one of them, predominately because of the disruption this would create for our older customers, specifically those who live in rural communities and have no other option for a pharmacy.

We urge lawmakers to communicate to CMS the need to take immediate action on pharmacy DIR reform. Specifically, we ask for lawmakers to support the Phair Pricing Act (S.640) that would achieve many of our proposed DIR reforms and save patients billions of dollars while eliminating the economic pressures and uncertainties faced by pharmacies. It is important that we continue to provide the most patient-centered health care experience possible for the millions of customers that we serve. In order to do that, it is imperative that DIR reform takes place immediately.”

Hy-Vee is deeply involved with and committed to providing the best pharmacy services and resources to the customers who are served by its 268 retail pharmacies throughout its eight-state region. Its employees also care for patients through two specialty pharmacies that Hy-Vee, Inc. owns and operates – Amber Pharmacy, which operates nationwide and provides a patient care focus with additional locations in Chicago, Houston, Dallas, Philadelphia, Buffalo, Phoenix and San Bernardino, as well as Hy-Vee Pharmacy Solutions, which provides specialty care for its patients throughout the Midwest with locations in Omaha and Des Moines.

The National Association of Chain Drug Stores developed a fact sheet that explains how addressing this issue will reduce patients’ out-of-pocket drug costs, improve patient health, and lower overall health care costs.


Hy-Vee, Inc. is an employee-owned corporation operating more than 245 retail stores across eight Midwestern states with sales of $10 billion annually. The supermarket chain is synonymous with quality, variety, convenience, healthy lifestyles, culinary expertise and superior customer service. Hy-Vee ranks in the Top 10 Most Trusted Brands and has been named one of America’s Top 5 favorite grocery stores. The company’s more than 80,000 employees provide “A Helpful Smile in Every Aisle” to customers every day. For additional information, visit