[Congressional Record Volume 170, Number 104 (Thursday, June 20, 2024)]
[Senate]
[Pages S4173-S4177]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CLOTURE MOTION
The PRESIDING OFFICER. Pursuant to rule XXII, the Chair lays before
the Senate the pending cloture motion, which the clerk will state.
The legislative clerk read as follows:
Cloture Motion
We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
do hereby move to bring to a close debate on the nomination
of Executive Calendar No. 597, Nancy L. Maldonado, of
Illinois, to be United States Circuit Judge for the Seventh
Circuit.
Charles E. Schumer, Richard J. Durbin, Alex Padilla, Amy
Klobuchar, Jack Reed, Tina Smith, Tammy Duckworth,
Richard Blumenthal, Robert P. Casey, Jr. Catherine
Cortez Masto, Margaret Wood Hassan, Peter Welch,
Sheldon Whitehouse, Raphael G. Warnock, Laphonza R.
Butler, Brian Schatz, Benjamin L. Cardin.
The PRESIDING OFFICER. By unanimous consent, the mandatory quorum
call has been waived.
The question is, Is it the sense of the Senate that debate on the
nomination of Nancy L. Maldonado, of Illinois, to be United States
Circuit Judge for the Seventh Circuit, shall be brought to a close?
The yeas and nays are mandatory under the rule.
The clerk will call the roll.
The senior assistant executive clerk called the roll.
Mr. DURBIN. I announce that the Senator from Pennsylvania (Mr.
Fetterman), the Senator from West Virginia (Mr. Manchin), the Senator
from Massachussetts (Mr. Markey), the Senator from New Jersey (Mr.
Menendez), the Senator from Washington (Mrs. Murray), the Senator from
Vermont (Mr. Sanders), the Senator from Arizona (Ms. Sinema), and the
Senator from Georgia (Mr. Warnock) are necessarily absent.
Mr. THUNE. The following Senators are necessarily absent: the Senator
from Wyoming (Mr. Barrasso), the Senator from Indiana (Mr. Braun), the
Senator from Alabama (Mrs. Britt), the Senator from North Carolina (Mr.
Budd), the Senator from North Dakota (Mr. Cramer), the Senator from
Idaho (Mr. Crapo), the Senator from Montana (Mr. Daines), the Senator
from Tennessee (Mr. Hagerty), the Senator from Mississippi (Mrs. Hyde-
Smith), the Senator from Wisconsin (Mr. Johnson), the Senator from
Kansas (Mr. Marshall), the Senator from Kansas (Mr. Moran), the Senator
from Alaska (Ms. Murkowski), the Senator from Nebraska (Mr. Ricketts),
the Senator from Idaho (Mr. Risch), the Senator from Utah (Mr. Romney),
the Senator from Florida (Mr. Rubio), the Senator from Florida (Mr.
Scott), the Senator from Alaska (Mr. Sullivan), the Senator from North
Carolina (Mr. Tillis), the Senator from Alabama (Mr. Tuberville), and
the Senator from Ohio (Mr. Vance).
Further, if present and voting: the Senator from North Carolina (Mr.
Budd) would have voted ``nay'' and the Senator from Kansas (Mr.
Marshall) would have voted ``nay.''
The yeas and nays resulted--yeas 43, nays 27, as follows:
[Rollcall Vote No. 202 Ex.]
YEAS--43
Baldwin
Bennet
Blumenthal
Booker
Brown
Butler
Cantwell
Cardin
Carper
Casey
Coons
Cortez Masto
Duckworth
Durbin
Gillibrand
Hassan
Heinrich
Hickenlooper
Hirono
Kaine
Kelly
King
Klobuchar
Lujan
Merkley
Murphy
Ossoff
Padilla
Peters
Reed
Rosen
Schatz
Schumer
Shaheen
Smith
Stabenow
Tester
Van Hollen
Warner
Warren
Welch
Whitehouse
Wyden
NAYS--27
Blackburn
Boozman
Capito
Cassidy
Collins
Cornyn
Cotton
Cruz
Ernst
Fischer
Graham
Grassley
Hawley
Hoeven
Kennedy
Lankford
Lee
Lummis
[[Page S4174]]
McConnell
Mullin
Paul
Rounds
Schmitt
Scott (SC)
Thune
Wicker
Young
NOT VOTING--30
Barrasso
Braun
Britt
Budd
Cramer
Crapo
Daines
Fetterman
Hagerty
Hyde-Smith
Johnson
Manchin
Markey
Marshall
Menendez
Moran
Murkowski
Murray
Ricketts
Risch
Romney
Rubio
Sanders
Scott (FL)
Sinema
Sullivan
Tillis
Tuberville
Vance
Warnock
The ACTING PRESIDENT pro tempore. On this vote, the yeas are 43, the
nays are 27, and the motion is agreed to.
The motion was agreed to.
The ACTING PRESIDENT pro tempore. The majority leader.
Kids Online Safety Act
Mr. SCHUMER. Madam President, now, I see my friend Senator Blumenthal
is on the floor, and I would ask him to engage in a colloquy on a very
important issue, a top priority of mine, and a bill that I am a proud
cosponsor of--the Kids Online Safety Act, or KOSA.
I yield the floor.
Mr. BLUMENTHAL. Thank you to my colleague, Leader Schumer. The leader
has been working tirelessly to get this bill done. I have seen the work
up close, and I have seen the benefit. After pushing and cajoling, we
are much closer to ultimate success.
This bill, which has nearly 70 cosponsors, is a set of safeguards and
accountability measures to protect kids from the clear and horrific
harms created by social media and other online platforms. The bill is
responsive to the countless stories that we have heard from bereaved
parents and young people about the terrible consequences these
platforms have had on their lives.
And just to repeat, I want to thank my colleague, Leader Schumer. The
leader has been working tirelessly to get this bill done. I have seen
the work up close, and I have seen the benefits. After pushing and
cajoling, we are much closer to ultimate success.
Mr. SCHUMER. I thank my colleague.
Like him, I have personally met with the families that have been
harmed. I have seen their terrible stories, and I am committed,
completely, to work with them to get KOSA across the finish line. With
the hard work of Senator Blumenthal and Senator Blackburn, KOSA has
passed through the Commerce Committee unanimously and has gotten up to
70 cosponsors.
Last month, I put together a plan to get KOSA done through unanimous
consent for a time agreement on the floor. I personally helped resolve
issues and mitigated unintended consequences of the bill. That effort
has significantly reduced the opposition, but there are still holdouts.
Mr. BLUMENTHAL. As the leader said, we have made significant progress
in resolving outstanding issues. This work is hard, but I think it is,
without doubt, that we are closer under his leadership.
I also thank my partner in this effort, Senator Blackburn, as well as
the amazing parents and youth advocates who have worked so hard on this
bill.
Put plainly, I am confident, based on my conversations with Leader
Schumer, that we are going to get this bill done.
Mr. SCHUMER. I thank my colleague once again for his good work. After
weeks of work, we have made real progress in removing objections to
this bill. Sadly, objectors remain. I hope the progress can continue
over the coming days.
If the objectors refuse to come to a resolution, we must pursue a
different legislative path to get this done.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Rhode Island.
Climate Change
Mr. WHITEHOUSE. Madam President, I am back with my trusty, battered
``Time to Wake Up'' chart, and the last time I spoke on the Senate
floor on this subject, I reviewed some recent warnings from the
Economist magazine, from the Potsdam Institute, and from the consulting
firm Deloitte that climate change is poised to cause tens of trillions
of dollars in damage around the world--tens of trillions of dollars.
Much of it, of course, right here in the United States.
Well, not surprisingly, the insurance industry has concern about
forecasts of damages in the tens of trillions. The Senate Budget
Committee recently held a hearing examining insurance, property, and
mortgage markets in Florida, a State that is on the leading edge of
climate-related risks.
Insurance, property, and mortgage markets are intertwined. To buy
property, most people need a mortgage. To get a mortgage, you need
insurance.
In our hearing, Dr. Ishita Sen, a professor of finance at the Harvard
Business School, told about the danger to Fannie Mae and Freddie Mac,
our Federal mortgage giants. They require insurance from insurers that
have a financial strength rating from a ratings agency, to assure that
the mortgages they purchase are protected by reputable, financially
solid insurers.
Bad insurance increases their risk of homeowner default, as
homeowners are way more likely to walk away from properties if their
insurance company can't pay claims or won't pay quickly.
Dr. Sen's research in Florida found several disturbing things. First,
she found that larger, stronger insurers are exiting Florida and being
replaced by smaller, less financially sound companies and by Citizens
Property Insurance, the State-backed insurer of last resort.
Second, she found that these smaller private insurance companies were
all receiving their financial ratings, required by Fannie and Freddie,
from the same ratings agency, known as Demotech. If you haven't heard
of it, it is because it hasn't been around long.
Third, she found that Demotech ratings appeared to systematically
overestimate the financial strength of the rated insurers. Nineteen
percent--nearly 1 in 5--of Demotech insurers in Florida became
insolvent between 2009 and 2022.
Fourth, she found that mortgage lenders were loading up those
mortgages insured by Demotech-rated insurers to Fannie and Freddie,
compared to properties with insurers using other rating agencies.
What does that mean? It means Florida's mortgage risk is being
transferred to the taxpayer and to pension funds for millions of
Americans that commonly purchase mortgage-backed securities. All of
this should ring a bell--a hell of a bell.
Remember the 2008 financial crisis. It, too, began in the residential
real estate and mortgage markets. It too had Florida as its epicenter.
It too involved ratings agencies handing out inflated ratings. It too
involved mortgage-backed securities, securitized by Fannie and Freddie
and sold around the world.
That 2008 financial crisis led to the great recession, in which
millions of Americans lost their jobs, their homes, and much of their
household wealth. Unemployment topped 10 percent. Five trillion dollars
was piled on our national debt.
So when we start seeing parallels to things that went awry back then,
we should wake up and take them seriously.
Dr. Sen said this about the climate risk we face:
Not only do we need to harden our homes, but we need to
harden our financial institutions, our banks, and our
insurance companies in order to make them withstand really
large climate shocks that are for sure coming their way.
Well, when she talks about ``really large climate shocks that are for
sure coming their way,'' that means they are for sure coming our way,
because just like 2008, if this goes down, everyone suffers.
At this point, we have dawdled on climate for far too long. We have
let the fossil fuel industry for decades obstruct action on climate
change.
Now, with financial warnings in the trillions, the Deloitte report
said:
The global economy needs to execute a rapid, coordinated
and sequenced energy and industrial transition.
Well, I promised in my last ``Time to Wake Up'' speech that I would
discuss how best to execute that rapid transition. So let me turn to
that.
I will begin by acknowledging that Democrats took the first serious
legislative step on climate in 2022 with the Inflation Reduction Act,
or the IRA. The IRA was modeled to reduce emissions by around 40
percent by 2030, compared to a 2005 baseline, which is great. But we
need to reduce emissions not by 40 percent but by 50 percent by 2030,
and to get to net zero emissions by 2050, if we are going to hold
warming to 1.5 degrees Celsius.
Even if we do that, the climate havoc we are already seeing will get
worse.
[[Page S4175]]
The climate havoc we are already seeing is at about 1.2 degrees
Celsius.
So what more do we need to find a pathway to climate safety? And how
do we do it globally, knowing that the United States only now accounts
for about 12 percent of total greenhouse gas emissions?
Well, for years now, my team and I have been in constant
communication with economists and other climate modelers who specialize
in predicting the effects of various emissions reduction policies.
Study after study, group after group, expert after expert have said the
same thing: An economywide carbon price will drive the deepest
emissions reductions--which makes sense.
The cost of a product's harms, under economic principles, should be
reflected in the price of the product. When they are not, it is a
subsidy.
And fossil fuel floats on the fattest subsidy in human history, now
clocked at over $700 billion a year in the United States alone. Put a
price on that free pollution, and markets emerge to reduce emissions in
the most efficient way, whether by fuel type, new technology,
efficiency measures, or preventing or capturing emissions.
Here is an example of how that works. This graph from 2021, before
the passage of the IRA, examines emissions trajectories in a variety of
policy scenarios. The green line here, at the top, is business as usual
then, which assumed no new emissions-reducing policies, and, of course,
had virtually no effect.
Drop down to this orange line. It is a package of clean energy tax
credits very similar to what was ultimately included in the IRA. As you
can see, those tax credits result in substantial, though insufficient,
emission reductions through 2030, which is here, and then they more or
less flatline.
The gray line below it here is a clean electricity standard, which
would have incentivized cleaner electricity generation and penalized
dirtier generation in the power sector. It does slightly better than
the tax credits, but it also wanes in efficacy after 2030.
Yellow line, just below it, is those tax credits, plus that clean
electricity standard. It is a bit better, but it is still pretty
impotent after 2030.
Then you have this light-blue line, which represents a relatively
modest carbon fee starting at around $15 per ton of emissions and
remaining relatively low for the first 6 years and then ramping up in
outyears to roughly $80 per ton. This model actually exempts unleaded
gasoline. Yet even with that exemption, it drives dramatically deeper
emissions reductions, particularly after 2030. Indeed, by 2040, it
almost doubles the emissions reductions of the other two policies
combined.
And the lowest line, this dark-blue line, represents doing it all.
And the anchor of that outcome is that modest carbon price, which is
ultimately far more potent at driving emissions reductions than all
other policies.
Here is another study. This one was done this year after the IRA was
passed, and it reaches similar conclusions. This top yellow line--which
doesn't come close to our targets--represents what would happen if, as
our Republican friends have threatened, the IRA were to be repealed and
EPA's recently finalized emissions rules for powerplants, cars, and
trucks were struck down or rescinded. As you can see, emissions very
slowly trend down due, largely, to continued deployment of wind and
solar--which are now the cheapest forms of energy--and to different
States' decarbonization policies.
This next line, which gets to our targets around 2040, represents a
scenario in which the Inflation Reduction Act stays, but the EPA rules
are voided or rescinded. Again, we don't hit our targets for 2030 until
2040, a very dangerous decade to miss.
The next line, the red line, is essentially our new business as
usual. It is the IRA and the EPA rules remaining in force, and there we
hit our decarbonization targets around 2037, still off by 7 years.
This light-green and light-blue line, which are very hard to
distinguish, respectively increase the value of the IRA power sector
clean energy tax credits by 50 percent and add a clean electricity
standard. Both result in delays hitting our 2030 target until 2035.
This purplish line here adds carbon pricing, similar to the one I
just discussed, with repeal of the nonpower sector tax credits in the
IRA.
So even with repeal of some of the IRA clean energy tax credits,
adding a modest carbon fee results in emissions reductions that are the
best in class so far, hitting our 2030 targets as early as 2033.
And the dark-green line, that just adds the carbon price. It nearly
hits our 2030 target very close, and it drives, by 2040, an additional
billion metric tons over the emissions reductions expected from the IRA
and EPA's rules.
And let me show you one more chart. This one here was from Brookings.
This one here is from the Potsdam Institute.
Together with the Washington Post, Potsdam Institute looked at over
1,200--one thousand two hundred--climate policy scenarios that have
been run in recent years, and they found that of 1,200 policy scenarios
that experts have run, there are only 11 left--only 11 left--that allow
us to hit our 1.5 degrees Celsius target. And of those 11, every one
requires a price on carbon pollution.
So the upshot of all of this is that you simply cannot continue
allowing polluters to pollute for free, not if you want to find a
pathway to climate safety. All of those other pathways without a carbon
price have been foreclosed by our dawdling and our indolence and the
pressure from the fossil fuel industry to do nothing.
One other point, as you can see, almost all of them overshoot. So if
you want to get back to safe climate levels, you absolutely are going
to need carbon capture technology and direct air capture to be specific
because you are going to have to claw back excess emissions. At this
point, it is not enough just to stop.
Happily, a carbon price gives carbon capture a revenue proposition.
So it will dramatically encourage that technology.
Here is the other huge advantage of a carbon price: We can export it
via carbon border adjustment. The European Union has just launched its
carbon border adjustment mechanism called its CBAM--carbon border
adjustment mechanism, CBAM--and it is about to be joined by the UK as
well, and they will assess a carbon tariff on imported goods to the EU
and the UK. Less carbon-intensive goods will pay a lower carbon levy;
more carbon-intensive goods will pay a higher levy.
And that levy creates a powerful global incentive for clean
manufacturing wherever products are made for export to EU and UK
markets.
If we joined in, if the United States of America joined in and
implemented a similar policy here at home, the downward pressure on
global emissions--particularly Chinese emissions, which currently
represent roughly a third of global emissions--would be even more
powerful. A carbon border adjustment would be a big win for cleaner
American manufacturing.
On average, the Chinese economy is about three times more carbon-
intensive than the U.S. economy. So if a domestically produced good
paid a $1 carbon levy, the equivalent good imported from China would
pay, on average, a $3 carbon levy, which would help to reshore to the
United States steel, aluminum, and chemical production, and all the
well-paid manufacturing jobs that they generate.
Now, the fossil fuel industry, of course, complains that such a
policy would harm consumers, the same consumers they happily gouge, but
when it comes to remedy and climate, suddenly, they are interested in
consumers. Well, A, these companies already make so much profit they
could absorb the tariffs for their customers, and, B, we can spend
tariff revenues in ways that boost consumers; for instance, return
revenues earned from polluters to consumers as dividends, as Chairman
Cantwell has proposed, for consumers to spend how they please. Indeed,
I have got a bill that would do just that.
One of the big lies of the fossil fuel industry is to pretend the
costs their pollution foists on the American public don't exist. In
fact, Americans are already paying for the polluters' pollution and for
their obstruction of climate action. We pay in higher home and auto
insurance premiums, now exploding through Florida; higher grocery
bills; higher home prices due to
[[Page S4176]]
lumber shortages; higher prices for goods tangled in climate-related
supply chain snarls. Americans are already paying the climate pollution
price. It is just a very dumb one that does nothing to reduce the
pollution and shifts the burden of harm from polluters to everyday
Americans.
A carbon price would send a correct price signal into markets. It
would reward innovators and innovation. It would rectify the
fundamentally unfair situation of an industry passing the cost of its
pollution onto ordinary Americans, and, as these various graphs all
show, it would actually work at providing a pathway to global climate
safety.
Opportunities are coming. Next year, a large swath of the Trump tax
cuts, which were disproportionately skewed toward large corporations
and the very wealthy, will expire and good riddance. This gives us an
opportunity to make the Tax Code more fair, to reduce income
inequality, and to use revenues from big polluters to reinstate, for
instance, the Child Tax Credit, to do good things.
Taxing polluters could also help to improve the Nation's fiscal
position. And another reconciliation bill is possible if voters take
climate risk seriously and don't put fossil fuel flunkies in charge of
their government.
In short, carbon pricing makes sense from all angles. It is the
single most effective policy at reducing carbon pollution and heading
off the massive, looming tens of trillion-dollar financial risks that
we see coming from climate change, as Dr. Sen said, ``that are for sure
coming our way.''
It provides a tool to help us tackle global emissions that will also
spur domestic manufacturing and jobs. It raises real revenue to help
Americans shoulder the burden we carry as a result of decades of fossil
fuel industry pollution, denial, and obstruction, and it could even
help reduce the budget deficit.
We have got no time left to waste. In the next Congress, you can be
sure that I will do everything in my power to make sure that we finally
embrace the winning policy that we should have implemented decades ago,
back when we were first warned about the costs and dangers associated
with carbon pollution.
It is well past time to make fossil fuel polluters pay for the harms
they cause, and it is well past time for Congress to wake up.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Washington.
Pharmacy Benefit Manager Transparency Act of 2023
Ms. CANTWELL. Madam President, I thank my colleague from Rhode Island
for his dedication and perseverance on these important issues, and I
also appreciate his mentioning the dividend concept because, obviously,
we want consumers to be kept whole here and to make a transformation
that they too want to make. So I thank him for his leadership.
Madam President, I come to the floor today to call attention to the
high prices Americans are paying for their prescription medication and
the urgent need to pass what is called the Pharmacy Benefit Manager
Transparency Act in the Senate that I have cosponsored along with my
colleague from Iowa Senator Grassley.
At the beginning of this decade, the United States spent more on
prescription drugs than any other country in the world, reaching an
average of $1,432 per person per year.
So 6 out of every 10 adults are currently taking at least one
prescription drug. More than a quarter of us take four or more
prescriptions. So when drug prices go up, it really does stretch the
family budget, cuts into our savings, and it puts us into health
challenges if we can't afford those prescriptions.
About one in four residents in my State--the State of Washington--
have either rationed or stopped taking prescription drugs because of
costs. Families should not have to make this choice.
One of the factors driving up the price of prescription drugs is
pharmacy benefit managers and their profit-driven business model that
is not transparent as to the price-setting and is causing pharmacies
great harm. Pharmacy benefit managers operate behind the scenes but
have a stake in just about every part of the drug distribution chain
and exert extraordinary influence in the prices that Americans are
paying for their medication.
PBMs decide which lifesaving medications most Americans will have
access to through their insurance plans. They decide how much copay
will be for prescriptions. They decide how much a pharmacy will be
reimbursed for dispensing these drugs and whether the pharmacy will
lose money when they fill a prescription.
PBMs don't actually handle or distribute the drugs, but they siphon
off the profit at every step in the process, from the drug
manufacturers and all the way up to the pharmacy counter. That is
because the PBM market, these pharmacy benefit manager middlemen--think
of them almost as the insurance company that is setting the price--are
extremely consolidated, giving consumers no choice in which PBM they
use. Just three PBMs control 80 percent of the market.
Can you imagine anybody controlling 80 percent of the market? But
just three of these companies control 80 percent of the market. And,
effectively, they have unchecked power on their ability to distort the
market and engage in unfair and abusive practices.
So what are we trying to do, Senator Grassley and myself? We are
trying to stop those unfair and manipulative practices.
Not only is the PBM market consolidated, but the vertical integration
of PBMs, pharmacies, and insurers is worrisome. The three largest PBMs
are each part of companies that include insurers and large pharmacies.
So this gives them the opportunity to increase their profits by
companies steering patients to pharmacies they own and then lowering
the reimbursement rates to competing pharmacies.
Americans are feeling this pinch. They are seeing that they have
higher drug costs, and they are seeing that PBMs are thriving. The
three biggest PBMs are astoundingly profitable. Last year, Optum Rx
raked in $116 billion for its owner, United Healthcare Group,
contributing about 30 percent of the company's total revenue.
PBMs have leveraged their market power and lack of transparency to
benefit themselves at the expense of patients and certainly--
certainly--at the expense of independent pharmacies. They are happy to
try to help the pharmacies in their vertical integration but certainly
not the independent pharmacies, if you will, trying to put them out of
business.
PBMs enrich themselves by manipulating the market for prescription
drugs at every turn. We cannot be fooled when the PBM claims to reduce
the cost of drugs by negotiating rebates from the drugmakers in charge
in exchange for favorable insurance coverage through an insurance
company they probably own.
I have been so frustrated by this in the past. It is like our
organization--take, for example, King County. Someone comes to them and
says: We will negotiate for King County employees a drug benefit, and
we will give you a discount. But then they pocket two-thirds of the
discount themselves--the PBM. That is what is going on here.
These rebates are part of their manipulative scheme to inflate and
extract the value from the prescription drug market.
In a market that is free of this kind of manipulation or competition,
you would have drugmakers, and they would be setting the formulary
cost. They would help drive down price by having competition.
But we know the market isn't working right when the least expensive
version of a drug is the least dispensed. That is right. You can tell
how a market functions or if it is a great functioning market because--
why?--when prices are too high and there is supply, people put more
supply in the market. But if the least expensive drug isn't being
dispensed, that means somebody is trying to artificially keep those
costs high.
This happens because PBMs control which drugs are included on a
formulary, and they get a bigger cut through a larger rebate and higher
copays when more expensive drugs are put on the list. This incentivizes
drugmakers to inflate the prices of their drugs to appeal to the PBMs.
Who bears the brunt of all these inflated costs? The American
consumer.
[[Page S4177]]
Another way PBMs manipulate the market is through abusive practices
like spread pricing or clawbacks. Spread pricing is when a PBM
reimburses a pharmacy one amount for filling a prescription and then
charges the health plan a higher price and keeps the difference.
That is the scheme. That is the scheme of how they are making money.
They basically say: Oh, this is the price. And they then charge the
plan a higher amount.
This creates two problems: One, neither the pharmacy nor the plan
knows what the other paid or was charged. So both parties lack the data
on what a true price for the drug is. Second, this practice allows PBMs
to squeeze more money out of the supply chain without anyone knowing
how much.
They also claw back reimbursements from pharmacies after a claim is
settled through direct and indirect remuneration fees, or what I call
DIR fees, which have generic effective rates, or GER.
So, for example, an independent pharmacy in Seattle actually had to
close because the PBMs said that this independent pharmacy owed
$538,000 in reimbursements in a single year from these PBMs. They just
came up with a number and said this is how much you owe us. So it is
not surprising that independent pharmacies can't stay open with these
kinds of tactics.
In just the last 18 months, 83 pharmacies in the State of Washington
have closed. These practices have contributed to the creation of
pharmacy deserts. In fact, Fortune magazine just wrote a story about
this particular problem in the State of Washington.
There are now 86 towns in my State that are more than 10 miles from
the nearest pharmacy. That means that roughly 450,000 people in my
State live in an area where they have to drive 10 miles just to go to a
pharmacy.
And we now rank sixth among all States for poor access to pharmacies.
According to the Washington State Pharmacy Association, there are no
more 24-hour pharmacies left in the city of Seattle.
So I am very concerned about the number of independent and community
pharmacy closures in my State. I am also concerned about how insurance
company middlemen and their unfair business practices have contributed
to these closures.
Some might ask why hasn't anyone discovered these schemes or done
something about it. Well, that is because PBMs shield their practices
and profits by claiming that their data that they have is considered
proprietary information.
But we must have laws on the books that make sure that the legal,
manipulative schemes can help stop these players in the marketplace who
have too much of a concentrated power.
PBMs cannot continue to operate in the dark while Americans see their
prescription drugs rise and rise year after year. And that is why
Senator Grassley and I introduced the Pharmacy Benefit Manager
Transparency Act, to shine light on these harmful practices, increase
the transparency, and increase the accountability for pharmacy benefit
managers.
The Pharmacy Benefit Manager Transparency Act directs the Federal
Trade Commission to crack down on unfair and abusive schemes, such as
the spread pricing or reimbursement clawbacks. It also mandates
transparency for these PBMs and that they submit a report about these
activities so that we can understand how they are basically moving
other products that are not on the formulary placements. That is
exactly how some of these schemes have operated.
It is important to have this help from the Federal Trade Commission.
It is their job to stop these unfair practices. It is their job to hold
PBMS accountable for manipulation of practices or prices and give the
Agency more insight into this marketplace.
We cannot wait any longer to get this legislation passed. My bill has
come out of the Commerce Committee with good bipartisan support, and it
has bicameral support as well.
So we must keep the momentum going. I hope my colleagues here in the
Senate will bring this Pharmacy Benefit Manager Transparency Act to the
Senate floor when we return. Americans are hurting, and so are our
pharmacists.
Our pharmacies themselves are places where information about our
prescriptions are held to a high standard. I would hate to see
Americans in such a concentrated market that all of our prescription
drugs are bought online from one or two big suppliers, and that somehow
is our delivery system.
I think pharmacists are a key part of our delivery system. Pharmacies
are a key part of communities. And we shouldn't have big, concentrated
players manipulating the prices of drugs and putting pharmacies out of
business and raising these unbelievable prices on our consumers.
So I thank the President, and I hope our colleagues will consider
getting this legislation in front of the Senate when we return.
The ACTING PRESIDENT pro tempore. The Senator from Washington.
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