Frier Levitt Obtains Arbitration Award Against Caremark Arising From Improper DIR Charges

PBMs assess DIR fees against pharmacies participating in the Medicare Part D networks. any source after the point of sale that offsets PDP costs. In many cases, PBMs unilaterally collect DIR fees from vendors months after the vendor was originally paid by the PBM.

Mission Wellness is minority and female owned San Francisco specialized pharmacy. Due to Caremark’s DIR fees, Mission Wellness was losing money participating in Caremark’s Medicare Part D networks. Caremark and SilverScript benefited at the expense of Mission Wellness, HIV-positive patients and Medicare. Only Mission Wellness’ sheer dedication to the HIV community has motivated them to continue serving HIV patients at a loss. Mission Wellness is one of the few specialty pharmacies located within walking distance of its San Francisco piece. If Mission Wellness had abandoned Caremark’s Medicare network, HIV-positive patients would have suffered. Mission Wellness continued to care for Caremark’s Medicare patient population while facing financial ruin. The owner is passionate about caring for this vulnerable patient population that the Centers for Medicare & Medicaid Services (“CMS”) legally recognizes as one of the few “protected classes” of patients at the federal level. Medicare Part D is our government prescription drug program for people age 65 or older, but HIV-positive patients are eligible for Medicare regardless of age. The care of HIV patients is an issue of national importance, according to CMS and Mission Wellness. But, for Caremark, it’s all about DIR fees.

Caremark has refused to provide the required discovery throughout the arbitration, including the discovery necessary to “verify” Caremark’s medication adherence calculations, which forms the basis of its DIR fee recovery. Even after being sanctioned by the arbitrator, Caremark refused to provide the basis for the DIR methodology.

The victory over Caremark and SilverScript gives hope to independent pharmacies who want to challenge PBM DIR fees. The victory comes almost simultaneously with last week’s announcement that the FTC is currently investigating the practices of Caremark and other PBMs, regarding their improper collection of DIR fees from independent pharmacies. According to trial attorney, co-founding member Jonathan E. Levitt, Esq., “Performance-based DIR fees are a threat to the existence of independent pharmacies and the deleterious impact of DIR fees is felt by patients, Medicare, drug manufacturers, and wholesalers. PBMs benefit from DIR fees.” Levitt concludes that: “Specialty pharmacies should be aware that they have rights under federal law, which may be justified in court.”

About Frier Levitt LLC

Frier Levitt LLC is a leading boutique law firm with offices in New York and New Jersey. The firm’s attorneys are leading practitioners who provide a range of services to healthcare and life sciences clients nationwide. Frier Levitt serves the supplier community, wholesalers, manufacturers and plan sponsors, large medical practices, hospitals, hospital medical staff, ambulatory surgery centers and laboratory companies. For more than 20 years, the Firm has been and continues to be a leader in matters of PBM contracts and applicable law. The firm’s attorneys are at the forefront of challenging the DIR fees imposed by PBM and have successfully challenged the DIR fees against leading PBMs, obtaining more than $40 million in damages on behalf of its pharmacy customers arising from lawsuits and settlements. For more information, please visit

SOURCE Frier & Levitt LLC

About Bradley J. Bridges

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