[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.

                          ____________________