[Congressional Record (Bound Edition), Volume 159 (2013), Part 9]
[House]
[Pages 12257-12261]
[From the U.S. Government Publishing Office, www.gpo.gov]




        CHALLENGES FACING INDEPENDENT AND COMMUNITY PHARMACISTS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2013, the Chair recognizes the gentleman from Georgia (Mr. 
Collins) for 30 minutes.
  Mr. COLLINS of Georgia. Well, it's good to be here at the end of a 
day in which there's been a lot of excitement here on the floor, a lot 
of voting going on, a lot of debate, which is what we're up here for.
  One of the things that I have committed to, as we talked about a 
little bit last week, is pointing out some things that may fall a 
little bit under the radar but actually matter a great deal to the 
people of not only the Ninth District, but to the people of the United 
States.
  Up here, we can get, many times, lost in what I'll call the big 
picture items or the latest of what's hot, so to speak, and tonight I 
want to talk about our local pharmacists.
  I have a little pharmacist I go to. We have several, but one of the 
main ones I go to is Woody's Pharmacy, Kevin Woody. And I go in there 
and I know that when I ask him about the drugs for myself, for my wife, 
my kids, he gives me answers. He helps me know why they interact, what 
goes on. We've got pharmacists in all kinds of settings that do that 
every day for folks. But our local pharmacies, and especially our 
community pharmacies, right now are under attack.
  I'm going to be joined, hopefully, here in a little bit by the 
gentleman from Pennsylvania to talk about the challenges facing 
independent community pharmacies. You see, local pharmacists play a 
vital role in America's neighborhoods and communities, particularly in 
the more rural areas of northeast Georgia. They provide unparalleled 
guidance, assistance, and resources for families, including my own.

[[Page 12258]]

I'm committed to protecting access to independent and community 
pharmacists and helping to level the playing field through effective 
and robust oversight of pharmacy benefit managers, or PBMs.
  It's a tough enough task to survive in this economy, and the 
overregulation by the administration is only making it more difficult. 
I am committed to working with my colleagues, particularly the 
gentleman from Pennsylvania, to promote legislation that will provide 
consumers with greater choice of pharmacies, require fair standards for 
PBM pharmacies, support access to diabetes testing supplies, protect 
traditional pharmacy compounding, and ensure that our military families 
can enjoy the many benefits that community pharmacies provide.
  In many cases, independent and community pharmacists have dedicated 
their careers to providing quality patient care. However, they've been 
continuously cut by unfair reimbursements, overbearing audits, and a 
take-it-or-leave-it approach to contracts. Over the next 30 minutes, I 
look forward to discussing the challenges facing independent and 
community pharmacists and the important role they play in the lives of 
many of our constituents.
  Although we cannot sufficiently cover these issues in the next half 
hour, I hope this will be the first of many conversations on this floor 
about this important topic. And this is what I mean about ideas and 
topics that may not make the headlines, they may not bring the stories 
on the opening of the evening news, but they affect us daily in our 
lives and they're often overlooked.
  When we deal many times on this floor, and I have spoken of it 
before, is how do we deal with and what is the cost of regulation and 
how they are affecting our everyday lives, this is one of the areas, 
especially with our community pharmacists, that they're affecting right 
now. It's affecting how they do business.
  As one community pharmacist told me recently, that if something 
doesn't change soon, that in my area of northeast Georgia, which has a 
vibrant community pharmacy along with PBM pharmacists and others, that 
within 10 years there may not be a community pharmacist left in 
northeast Georgia. That's a scary thought, Mr. Speaker.
  When you think about that for a second, when you look at an industry 
that many of us grow up and you have stories going back to when many 
pharmacists had soda stands; they had just a full-service place where 
you could go. Even my pharmacist today still has the scoops of ice 
cream. One of the ways my kids want to come with me to the store is 
they say, I'll go with you if you're going to Woody's because I want a 
scoop of ice cream.
  So it's a family place. It's something that I think brings back a 
sense of Americana, but it also hits at the very idea of what we'll 
just take as just good old-fashioned entrepreneurship--businesses that 
mean something to our community but also provide a service that is 
invaluable. Right now I think those are under attack, and those are the 
things that just concern me.
  When we look at that possibility, as the pharmacist told me, he said 
that there possibly may not even be community pharmacists in our area 
within the next 10 years, that really struck my attention; and it's 
made me, before I was even elected, begin to look at what are the 
problems and how can we address those as we go along.

                              {time}  2100

  I can give examples. And I bet almost every Member here on both sides 
of the aisle can come in and talk about their pharmacist, wherever they 
may work, but a community pharmacist who they can call on and ask 
about. My parents--I have watched them grow up and they get older, and 
when we have questions about their medicines I know that I can call my 
pharmacist and ask him questions. I know that many of you--and maybe 
even you, Mr. Speaker--have that person that you can talk to about the 
drugs and the issues that just keep us healthy.
  One of the things that they also help us do, and community 
pharmacists do, is provide that preventive care that keeps us from 
getting into these long-term illnesses which drive up the health care 
costs, which is talked about so much on this House floor. And really 
from my perspective the tragedy of ObamaCare is: let's get back to the 
very roots of medicine. And as the doctors were speaking earlier 
tonight on the floor, talking about how we can do preventive medicine 
and make sure that the health of our constituents is taken care of, 
community pharmacists do just that.
  One of the first challenges facing our local pharmacists I want to 
discuss here tonight relates to diabetic testing supplies and the 
competitive bidding process. Earlier this year, I wrote the Comptroller 
General Gene Dodaro expressing concern about the impact that the 
Medicare Competitive Bidding Process will have on patient access to 
diabetic testing supplies.
  Seniors in northeast Georgia, and across the State, rely on their 
ability to get the testing supplies from their local pharmacists. Many 
have written to me expressing their concerns that applying 
competitively bid pricing to independent community pharmacies could 
negatively impact their access to these essential supplies.
  In more rural communities, such as northeast Georgia, an independent 
community pharmacy may be the only available option for seniors. Their 
local pharmacist helps them properly use their test strips and meters 
and provide much needed resource and guidance in managing their 
disease.
  A 72 percent reduction in reimbursement for retail pharmacies that 
are currently supplying these items to Medicare beneficiaries was 
announced on January 30, 2013. This reduction in reimbursement took 
effect on July 1 of this year.
  Here are some of the feedback that Georgians have given about the 
impact that this reimbursement reduction is having on their quality of 
life and access to care. We've heard things like: ``I've had difficulty 
finding a new provider; my product of choice was unavailable; I've been 
forced to change providers; the quality of my care and services is 
poor; my cost has increased; I've experienced poor communication from 
CMS; I'm confused about the changes.''
  Independent community pharmacists typically sell diabetic testing 
supplies to provide a service to patients, not to make money. Even 
before the reduction in reimbursement rates, the profit margins on 
these supplies were very low.
  Now, pharmacists have to choose between keeping their business open 
or giving their patients the supplies and care they need. This isn't a 
choice they should be forced to make. In an area and a time in which 
our economy and jobs are suffering, this is another example of a 
business that is fighting against the world, so to speak, to stay in 
business and to employ those 3 or 4 or 5 or up to 10 or 15 people that 
take care of the people in our communities, Mr. Speaker.
  This is something we need to take care of. This is something when you 
hear the feedback from folks who are calling our office and writing our 
office and calling their pharmacist and saying: ``I'm having difficulty 
finding a new provider; I can't make sense of this; I'm forced to 
change my provider; and the quality and service are poor.'' We need to 
take a look at what's going on.
  Another pressing issue from my local pharmacists is the lack of 
oversight and transparency when it comes to the pharmacy benefit 
managers. PBMs are actually one of the least regulated segments of the 
health care market, yet they are the cause of numerous frivolous audits 
that local pharmacies are subjected to.
  Now, supporting strong PBM transparency requirements is key to 
delivering real savings to patients. Unlike my local pharmacist, and 
those across the Nation, PBMs do not have a real relationship with 
patients. In fact, it is not uncommon for them to secretly retain most 
manufacturer payments--e.g. rebates, discounts and other fees--instead 
of passing the savings on to patients.

[[Page 12259]]

  Additionally, PBMs have been known to switch plan members from low- 
to high-cost drugs and manipulate generic pricing. At the end of the 
day, the data points to the fact the PBM market is broken. I can speak 
to this from my own personal experience. As I've shared before, I 
believe when we talk about problems, we need to relate it to what 
people can understand. For this, I can understand it through my family, 
but also through my parents, who have talked about how their drugs have 
been changed, or they've been given short notice of changes, or when 
they get them from their doctor, who gives them the prescription to 
take them to their pharmacy, they have a problem because they're not 
going to be certified because there's been a change just in the last 
little bit in what drug the coverage will make, and the PBMs have had a 
large part in that.
  What I believe is, their conduct is anticompetitive and anticonsumer, 
and independent community pharmacists are often left vulnerable to 
their market power.
  But there are solutions to this problem. For example, allowing the 
smaller to collectively negotiate will help level the playing field.
  The threat of antitrust liability in the status quo prevents these 
collective negotiations, and I believe an antitrust exemption is 
appropriate and consistent with past exemptions enacted by this 
Congress.
  It is with that that I am proud to be an original cosponsor of what 
is known as the ``Protecting our Hometown Independent Pharmacies Act of 
2013,'' which I believe achieves this goal.
  The author of this bill, Mr. Marino, and I have had several 
conversations discussing his examples and what brought him into an 
understanding of what is going on with our community pharmacists and 
the problems that have developed here. And I want to applaud, and I 
want to take out and highlight Members who have brought forward pieces 
of legislation that I believe matter to our constituents and they 
matter to the American people.
  This is a conservative piece of legislation that brings forward and 
highlights a problem with our community pharmacists, who are reliable 
businessmen in their communities. And by doing so and taking that part, 
Mr. Marino has helped bring forth a piece of legislation that I am glad 
to support and look forward to moving forward, hopefully through the 
committee process and onto this floor and eventually signed into law.
  Now, understand, there's a lot of discussion that needs to be had 
here. PBM takes their fair share of blame, and there are a lot of 
problems in this situation. It is something that we need to discuss 
because it matters to the people back home, it matters to the very 
essence of health and health care, which we come down to this well and 
we talk about all the time. We talk about costs, we talk about the 
problems with access. This is an area where I believe we can continue 
to move forward.
  There's also another pressing matter facing independent community 
pharmacists, particularly in northeast Georgia, and that is abusive 
audit tactics. I believe, like many Americans, that pharmacy audits 
should be focused on uncovering actual fraud and abuse. Audits play an 
important role in ensuring high-quality patient care and services.
  Unfortunately, PBMs are leveraging their power to abuse the auditing 
process. They're singling out expensive drugs and using typographical 
and other trivial errors to recoup from pharmacies significant amounts 
of money--not to return to Medicare, but to line their own pockets.
  Now, this is where I'm going to use an example that I had a few 
months ago. I had a number of pharmacists, my local pharmacists all 
over northeast Georgia, came in and they met with me. All I did was, I 
sent out a note because I had been hearing about this from my local 
pharmacist and from others, and I said, come talk to me about what 
you're experiencing.
  Like a lot of times--and Mr. Speaker, maybe you've done a similar 
thing with businesses--you expect maybe three or four people to show 
up. In my conference room I had a full house. Pharmacists who left and 
drove, some as many as 2 hours, to come to that office to sit down and 
talk about the problems that they were facing. What that told me in the 
middle of the day was that the issues and the problems that they have 
were more important to them than spending time at their shop that 
morning, and were finding somebody to cover their shop so they could 
come talk about this because it's affecting the very quality of their 
existence.
  Now, as we look at this, they began to give me examples. For example, 
let's say your local pharmacist fills a $500 prescription for you that 
you called in over the phone or you had called in from the doctor's 
office. The pharmacist dispensed the correct drug in the correct amount 
and provided you the correct directions for taking the drug. Mr. 
Speaker, do we have a problem at this point? I don't think so. You're 
getting the right drug in the right amount in the right container with 
the right label. Everything is there on what your doctor had wanted you 
to have.
  But if the pharmacist makes a mistake in his personal records in his 
checking off--instead of checking the ``called in over the phone'' box 
he checks ``the faxed in'' box--a PBM could then during their audit of 
the pharmacy find the mistake and take back the entire $500. Not just 
the copay, and not just the profit the pharmacy received; they take 
back the entire cost of the drug.
  Now, I've said before, there are a lot of things that make me scratch 
my head. This is one of them. It's one thing to come in and be audited, 
it's one thing to find a mistake in which there's a clerical error--and 
there needs to be some correction to that clerical error. But let me go 
back, Mr. Speaker, and remind you that it was dispensed properly in the 
correct amount with the correct drug and the correct facility with the 
correct directions on there. But, however, on the paperwork on how the 
call came in, how they took the prescription down, they were audited 
and deemed for that, and they were not just deemed for the amount of 
their copay or their profit even; they were deemed for the entire 
amount of the drug.
  What's really interesting about this is I've also had several of my 
pharmacists say it is eerily interesting to them that when they're 
audited, it's not the generics that are audited, it is the brand names 
that seem to be audited, the higher cost drugs that find their way onto 
the audit list. I think that's really interesting because what happens 
is if one mistake comes, you're talking about a major cost for these 
pharmacists. This is not something they can continue to eat.
  Now, it can be said they can appeal it, and they can go through the 
process, but it is something over and over. They don't get to appeal it 
and hold the money. They have to send the money in and then appeal. 
Now, does that sound fair? I don't think so.
  I think what we've got to do here is begin to look at this problem in 
its entirety. The PBM could pocket the entire cost of a correctly 
dispensed drug, even what the pharmacy paid wholesale. This leaves me 
baffled. Obviously, an auditing measure should be in place, but for 
transparency and accountability, not to financially penalize one's 
competitors.
  Oh, by the way, some of the PBMs are actually involved in the 
competitors to the local pharmacies in which they audit. Just a small 
reminder.
  I can stand here all evening and tell you story after story of the 
unfair and almost unbelievable auditing practices that my local 
independent folks have had to deal with.
  One local pharmacist told me about how they had already been audited 
three times that year, and they were preparing for their fourth. Mr. 
Speaker, do you know when he told me that? March. He had been audited 
three times, getting ready for a fourth, and it was January, February, 
March. This seems to be a problem.
  Interestingly enough, the audits don't focus, as I've already said, 
on generic drugs. The audits typically look

[[Page 12260]]

at administrative errors on high-priced drugs.
  This comes as no surprise. We know that the PBMs are looking to take 
money, line their pockets, and not care for patients. They don't 
sponsor baseball teams, they don't participate in chili cook-offs, and 
they sure aren't going to any tomato festivals. Patient care takes a 
back seat to profit margins.
  I believe that Congress should take a closer look at PBMs because, in 
the status quo, after a pharmacy has been audited, recoupment funds go 
back to the PBM. This is unacceptable. In other words, you're auditing, 
and the fines that you get, the penalties that you get, go to you. 
Again, there seems to be an incentive problem here. You're dealing with 
the high-cost drugs, you're missing the generics, you're looking for 
clerical errors on correctly dispensed drugs. The patient never had a 
problem, but yet the pharmacist was deemed.
  I'm committed to working with my colleagues to make sure that 
Medicare is getting its fair share of funds back. There is one word we 
hear a great deal on this floor. No matter the debate topic it is bound 
to come up at least once. And that word is ``transparency.''
  But there are few areas in which this concept is more important. You 
see, transparency saves money and helps markets work better. It helps 
it work as it was intended to work.
  Transparency allows plans and payers, including large corporations 
and governments, to confirm that a PBM is, in fact, providing the 
service it was hired to do: to secure low drug costs.
  Now, remember, in this world of regulation--and for those who know me 
in my short time up here in Washington, this is one of the issues that 
I have focused like a laser on, regulation. In fact, tomorrow morning, 
I encourage Members if they are not busy and they want to come to a 
regulatory reform caucus breakfast, come see us. We'll have breakfast 
there for them, and we're going to discuss the effects of regulatory 
reform and why this matters.
  Many times, we in the elected office, we talk about regulatory reform 
and why it matters, and it's going to make sense. I believe tonight 
we've shown how it affects local community pharmacists, and that's 
something that needs to be looked at.

                              {time}  2115

  But again, what were the PBMs supposed to do? They were supposed to 
secure low drug costs. They were supposed to secure a better way for 
our Medicare savings. This is not what is happening.
  Unfortunately, under today's policy, the plan's sponsor has no way to 
verify that their PBM is sharing manufacturer rebates or that the PBM 
is negotiating the lowest possible cost for specific drugs. In fact, 
recent data indicate the exact opposite is occurring. For example, 
TRICARE anticipates a savings of $1.67 billion by negotiating its own 
drug prices and rebates for its 9 million beneficiaries rather than 
going through a PBM. Let me state that one more time, Mr. Speaker. 
TRICARE anticipates saving $1.67 billion by negotiating its own drug 
prices and rebates for its 9 million beneficiaries rather than going 
through a PBM.
  I happened to be on this floor for the last couple days and in that 
chair, listening to discussions on our DOD appropriations and on the 
struggles that we're having with our funding for our vital services in 
our defenses. Don't you think that this is something that we can 
afford, not only in defense, but in other areas as well? I believe it 
is. The State of Texas estimates it could save $265 million by 
switching to a transparent PBM contract. This is no chump change we're 
talking about here tonight.
  Although my time draws to a close, I am pleased that the 
conversations are just beginning. The challenges facing independent 
community pharmacies are great, but the important role they play in our 
towns and States is even greater. It is coming to a time and a place 
like this in which we can look forward to solutions that matter. I did 
not come to Washington, D.C., simply to watch things happen and to 
wonder why. I came to be part of a solution. Like you, Mr. Speaker, we 
are part of a freshman class that came here believing, as I've said 
before, that this is a place to which people still look to make this 
country continually the greatest country on Earth, and people look to 
us for solutions and answers. The way they do that is by looking at 
commonsense legislation. They look at commonsense solutions that affect 
them every day.
  For many, many people in this country--and especially in my home of 
northeast Georgia--local pharmacies are a place that sponsor those 
football teams and baseball teams. They are the places where senior 
citizens go as I have watched many times in the pharmacies that I go to 
whether it be my own pharmacy or not.
  Just the other day, I went in and saw a sweet little senior citizen 
lady I'd pastored for 11 years. In my first church, I actually had 45 
senior adults. They were all that was there. I was 28 years old, and 
all of a sudden, I gained all of these grandparents. So, for me, it was 
something I learned a great deal from. When I watched this sweet old 
lady come up to the counter, she asked Kevin about some issues that she 
was having with her drugs. She was trying to figure out what was going 
on, and Kevin took the time to talk with her and to explain, No, this 
is not what's really happening. This is what you need to do, and this 
is the medicine you need to take. He took the time to care.
  Pharmacists all across this country--and I want to make this very 
clear; this has nothing to do with pharmacists individually. 
Pharmacists, whether they work in large shops or small shops, in 
community stores or large box stores, are wonderfully dedicated 
professionals who do a wonderful job. They work hard in helping their 
customers, and they work hard at helping those who have come in 
between.
  When we deal with this kind of environment, we make sure that our 
local pharmacies are the ones that can have a chance to continue to 
grow and to prosper in their communities. When we have our community 
pharmacies operating as they should, then we are going to be able to 
continue the process of making sure that our communities have the 
pharmacies that they can depend on and also a transparency that comes 
with dealing with these PBMs and with the auditing practices which have 
been really tearing apart our pharmacies and community pharmacies as a 
whole.
  I go back to that one statement that my local pharmacist said to me. 
He was sitting there, and he was looking across, and he was explaining 
what I've talked about here tonight about the auditing practices. He 
said that, if this doesn't change, our pharmacists will be out of 
business, that there won't be any pharmacies left in the community 
world. For northeast Georgia, that would be a tragedy.
  I am pleased tonight to also see my good friend from Pennsylvania 
(Mr. Marino), who has been a real leader in this area, and I am a proud 
cosponsor of his legislation, the Preserving Our Hometown Independent 
Pharmacies Act of 2013. I would love to yield to him now to share 
further on what we've experienced during this time.
  Mr. MARINO. Thank you.
  Mr. Speaker, today, independent pharmacists are facing an increasing 
number of challenges that threaten their very livelihoods. These are 
the independent mom-and-pop pharmacies that all Americans have come to 
know and to love. They are the neighborhood staples that you have come 
to rely on. They are where you can go for basic medical advice, and 
they are where new parents can have their children's prescriptions 
filled. On average, independent pharmacies fill over 200 prescriptions 
every day, provide immunization, durable medical equipment, diabetes 
training, and other vital services. Unfortunately, these independent 
pharmacies are more vulnerable than ever and are having to lay off 
workers at an alarming rate.
  As more independent pharmacies are forced to close their doors, I am 
increasingly concerned about the impact

[[Page 12261]]

that this will have on American families, especially on those in rural 
areas like my district in northeast Pennsylvania. Not only does their 
closure jeopardize the local drug supply, but it also has dangerous 
consequences for the surrounding areas' medical providers--that's 
right--dangerous consequences for the surrounding areas' medical 
providers.
  One of the biggest dangers to local independent pharmacies is the 
pharmacy benefit managers industry, or PBMs. Over the past few years, 
the PBMs' power has become concentrated in the hands of a few, enabling 
them to dominate over their competition. Independent pharmacies are at 
a competitive disadvantage, which prevents them from providing their 
customers with vital prescriptions at a reasonable cost.
  I have heard from a number of pharmacists that PBMs have an 
incredible market power over independent pharmacists. Even worse, the 
political power of only a handful of companies has enabled them to grow 
and to swallow their competition, which is only expected to intensify 
if ObamaCare is fully implemented.
  This is why I, along with my colleague to my right and Judy Chu of 
California, introduced H.R. 1188, the Preserving Our Hometown 
Independent Pharmacies Act of 2013. This bipartisan, commonsense 
legislation provides a limited exemption for independent community 
pharmacists from antitrust laws. My bill would level the playing field 
by enabling the mom-and-pop pharmacies to work together in order to 
negotiate better contract terms from the large drug companies and 
pharmacy benefit managers, or PBMs. The unchecked practice of PBMs has 
gone on for too long, and it's time we passed H.R. 1188 in order to 
stop these harmful practices.
  Mr. COLLINS of Georgia. I appreciate that.
  As our time draws to a close tonight, I am pleased that we can begin 
these conversations. That's what I want to have with the American 
people and with our body here, bringing out and highlighting 
legislation and the work that I believe is being done here, because I 
believe there are great things that can happen when we pull together 
and when we find the things that matter to Main Street. When we do 
that--Congressman Marino and others as we pull forward like this--we 
are actually bringing ideas to the forefront that help and build our 
economy, that talk about those jobs, that keep those jobs in the 
community, and provide a great public service.
  When we are looking at a health care situation and an aging 
population, our community pharmacists need to be a vital player in that 
market, making sure that our health and our well-being are taken care 
of in a kind and caring and compassionate way. The challenges facing 
independent community pharmacists are great, but the important role 
they play in our towns and States is even greater still.
  I want to thank the gentleman from Pennsylvania for his leadership, 
and I want to thank him for joining me here tonight and for being a 
part of discussing real solutions and real answers of why a 
conservative agenda is important to America, because it matters to Main 
Street, because it matters to real people in everyday life situations.
  Mr. Speaker, with that, I yield back the balance of my time.

                          ____________________