Last week, Diplomat Pharmacy released its quarterly earnings, which included new details about the financial impact of Direct and Indirect Remuneration (DIR) fees. I provide some background on DIR fees below.
Diplomat, as a public company, is the only entity that is obligated to publish truthful information about DIR fees. While reviewing its data, let’s recall our Drug Channels philosophy, courtesy of the late senator Daniel Patrick Moynihan: "Everyone is entitled to his own opinion, but not his own facts."
As you will see below, Diplomat’s exposure to DIR fees remains relatively modest. DIR fees as a share of its gross profit has even declined since last year. This shift is driven by an evolving business mix along with better accounting of and management control over DIR fees.
In part to counter DIR fees and other payer pressures, Diplomat is signaling its intention to play a more significant role in the pharmacy benefit management (PBM) business. Let the rumors begin!
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