[Congressional Record (Bound Edition), Volume 160 (2014), Part 4]
[House]
[Pages 6068-6071]
[From the U.S. Government Publishing Office, www.gpo.gov]




          THE NEED FOR GENERIC DRUG PRICING IN MEDICARE PART D

  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. Madam Speaker, it is an honor to always come 
to this floor and especially talk about needs, and I think this 
Republican majority speaks to the needs of our families, our moms and 
dads, and the struggles that they go through every day.
  One of those areas that I have been concerned about since coming to 
Congress and finding out about it deals with our independent 
pharmacies, deals with the contracts, and deals with the pharmacy 
benefit managers.
  These are things that need to be fixed because they are destroying 
some of the very fabric of our communities, and these community 
pharmacists are just asking for a chance, and right now, they seem to 
be on the outside looking in, when it comes to dealing with these.
  Tonight, I am pleased to be joined by not only my good friend who I 
served with not only in Georgia, but up here in Washington as well, 
Congressman Austin Scott, who is a cochair of the Congressional 
Pharmacy Caucus; and I would love to have him be a part of this 
tonight.
  Mr. AUSTIN SCOTT of Georgia. Well, thank you, Mr. Collins. As you 
know, you and I served together and had a great relationship there in 
Georgia, where Democrats and Republicans worked together to balance the 
budget and solve the problems, and I sure wish we could get to that up 
here.
  Tonight, we are here to talk about an issue that affects us all as 
well, and that is transparency in pharmacy pricing and highlighting the 
need for our rural pharmacist, our community pharmacist, and the 
challenges that they face with Medicare Part D programs.
  Just recently, I met with a pharmacist from my district, Mr. Daryl 
Reynolds; and like many other pharmacists from the Eighth District, he 
runs a small store and has been hurt by the lack of transparency and 
pricing. Ultimately, that hurts his patients because it makes it hard 
for him to stay in business.
  While the big pharmacy chains want to operate in the metropolitan 
areas--and that is wonderful--we in the rural parts of the country need 
our rural and community pharmacists, and pharmacists like Daryl are a 
vital component of our national health care system, for those of us who 
live great distances from the metropolitan areas.
  They know us by name. They know our drug interactions. They are able 
to work with us and our physicians. They make sure that we are taken 
care of and that we are taking the right medications for the problems 
that we may have.
  In order to continue these relationships, we need to make sure that 
the Medicare Part D plans that they work through to help our seniors 
have the pricing transparency with pharmacy benefit managers.
  In many cases, our community pharmacists--because of the way the 
pharmacy benefit managers operate--are reimbursed at less than what the 
drug actually costs the small community pharmacy. These contracts are 
nonnegotiable. They are vague and opaque, and most of the time, it puts 
a small community independent businessman up against a multibillion 
dollar company.
  These PBMs and their maximum allowable cost prices, they don't update 
them when the prices go up, and that leaves the pharmacist paying more, 
again, for the drug than they actually get reimbursed for the drug, and 
these are the pricing practices that need to be fixed for our community 
pharmacists.
  I am here tonight with my colleague from Georgia (Mr. Collins) to 
bring light to this issue. CMS recently proposed rules that would take 
an important step in addressing this need for generic drug pricing 
transparency.
  How can transparency be a bad thing for Medicare Part D? The rule 
simply requires that Medicare Part D sponsors should agree in, their 
contracts with CMS, to update the prices in a timely manner to reflect 
the current market price.
  In rural districts like mine, access to a community pharmacist is 
critical for people to receive the medications they need. It is 
imperative for the health and wellness of our rural communities.
  I want to commend you, Mr. Collins, for your legislation. I look 
forward to working with you to pass that and thank you for being here 
tonight on behalf of community pharmacists.
  Mr. COLLINS of Georgia. I appreciate that, to my good friend from 
south Georgia.
  You know, it is amazing. In those communities that you just spoke of, 
they need the help--not that they are asking for a handout. They are 
just asking for fairness, and I think that is what we miss so often 
today in our debates here on this floor, and they should be on this 
floor.

[[Page 6069]]

  We talk about one group against the other, and really, Madam Speaker, 
this is about fairness. This is a simple issue of fairness and saying 
we in the government need to be in our proper constitutional role and 
to look at it in the framework of not tilting the scale one way or 
another, but saying what are we doing that helps the American people 
and also looking ahead to--especially in an area such as health care in 
which we can find common ground; and I believe we will as we go forward 
here.
  So when we are talking about Medicare Part D and some of the proposed 
changes of CMS to Part D, it is really the need for generic drug 
reimbursement limits, known as maximum allowable costs, or MACs.
  Generic drugs account for nearly 80 percent of prescriptions, but a 
community pharmacist is kept in the dark as to how pharmacy benefit 
managers determine MAC rates for these medications.
  You see, Congress and CMS must step in to give pharmacists more 
transparency into this process, so they are empowered to evaluate if 
specific contracts would help them better serve our neighborhoods and 
families.
  I am a big believer, Madam Speaker, that transparency is important, 
that one of the reasons in the basic underlying trust today, when you 
look out among the country and you see the unfortunateness of the low 
esteem that Congress is held in, I believe it goes back to a matter of 
trust.
  It goes back to a matter of trust, of believing that what goes on 
here does not have their best interests at heart, and I think this is 
sort of what we are talking about tonight with our pharmacists.
  Pharmacists, no matter where they work, are wonderful individuals who 
truly, I believe, have the best interest of the folks who come to see 
them at heart.
  The problem is in the system, especially when it deals with pharmacy 
benefit managers and the inherent falseness and the inherent problems 
that are faced with the pharmacy benefit managers and our independent 
pharmacists.
  Pharmacists need an appeals process when disputes over MACs arise and 
timely adjustments of MAC lists by PBMs to reflect rising drug costs 
and ensure consumers have the information they need regarding copays.
  The status quo cannot continue because, right now, an amount a 
pharmacy is paid in the morning for a particular medication can change 
to a different rate for the same medication in the same afternoon.
  For those who may be watching tonight or who will be watching: Can 
you believe this? We are not talking the price of OPEC here. This is 
not an oil commodity. This is a drug cost, and yet they can't get the 
help that they need just for simple transparency.
  The uncertainty is devastating to pharmacies and the patients they 
serve. This process is further complicated by the fact that PBMs 
frequently maintain multiple MAC lists for the same health plan, one 
for the health plan and one for the pharmacy; one behind the mirror, 
one in front of the mirror; one outside, one inside.
  Where is this going to stop? I have come to this floor many times, 
and it just still boggles the mind for me. How can you do this?
  You know, I am concerned that this provides PBMs with the power to 
obtain significant revenues through deceptive practices without 
consumers being any the wiser.
  My independent community pharmacies and chain pharmacies in northeast 
Georgia work long hours each and every day to provide care and advice 
to our families and our seniors, but they are frustrated and tired by 
the lack of transparency in generic drug pricing.
  PBMs have a track record of refusing to divulge the method they use 
to determine generic prescription drug price reimbursements in the 
take-it-or-leave-it contracts pharmacists must sign to assist patients.
  In addition, PBMs often fail to update MAC prices in a timely 
fashion. Conveniently, this often occurs when there is a price spike, 
wouldn't you guess. Oops, we forgot to update it, and by the way, the 
price went up.
  When you consider that generic prescription drugs make up 
approximately 80 percent of all dispensed drugs, you can understand why 
pharmacies of all sizes and affiliations are frustrated.
  I was pleased when CMS released its proposed rule for Part D on 
January 7 of this year because it included several positive provisions. 
Even though I did not support the rule in its entirety, I did support 
key provisions that would give independent community pharmacists the 
ability to try to compete in preferred pharmacy networks; provide 
important generic drug pricing transparency reforms, although they were 
not as strong as I would have liked to have seen them.
  The proposed rule also contained measures documenting problems with 
mail order delivery delays and the difficulties beneficiaries have when 
trying to change their prescriptions over an automated telephone 
hotline.
  Unfortunately, on March 10, CMS announced that it would be holding 
off on finalizing certain provisions in the rule, one of those 
provisions being the any willing clarification regarding preferred 
pharmacy networks.
  This was a devastating blow to northeast Georgia pharmacies and the 
families that rely on them and, to be frank, to anyone listening, not 
just northeast Georgia, Madam Speaker. It is all over the country, and 
this is something that is disturbing to me and many others.
  I continue to remain hopeful that the provisions on generic drug 
pricing transparency will be finalized when the rule is published. 
However, I don't believe simply hoping is enough. In this country, I 
think we have found out, over the past few years, that hope is not a 
plan and hope is not something I am going to sit by and watch when we 
look at this issue.
  So this evening, along with my colleague from Iowa (Mr. Loebsack), I 
introduced H.R. 4437, the Generic Drug Pricing Fairness Act. This 
legislation will provide much-needed, although reasonable transparency, 
by doing a few things. Let me list those.
  It will provide clarity to plan sponsors and pharmacies regarding how 
MAC pricing is determined. It will establish an appeals process in 
which a dispensing provider can contest a listed MAC price. It provides 
standardization for how products are selected for inclusion on MAC 
list, and it compels PBM disclosures about the use of multiple MAC 
lists and whether or not MAC pricing is utilized for mail order 
products.
  More than 80 percent of the prescriptions that community pharmacists 
dispense that we talked about are generic, and that is good for both 
beneficiaries and for the solvency of the Part D program.
  Pharmacies deserve to know what they will be reimbursed for when 
providing a service. When market factors cause the price of generics to 
change, pharmacies should also be informed of that change in a timely 
and efficient fashion.
  Again, I started this conversation with my dear friend from Georgia 
about fairness, about simple fairness; and when there is a system set 
up in which a problem exists in which basically the system is picking 
winners and losers, the system is causing these unhealthy problems for 
our independent pharmacies, then that is when we need to act.
  That is the government's role, is to remove the impediments toward a 
free market and be able to compete, and those pharmacists need to know 
that Washington cares.

                              {time}  2000

  When you understand what people are looking for, then you can begin 
to act as I think we were all elected to do, Madam Speaker, and that is 
to listen to our communities, that is to listen to our folks and 
understand that many times these kinds of situations affect the 
everyday lives of people getting up and just trying to make a living, 
just trying to get the drugs and the necessities that they need.
  What they are not understanding is why their independent pharmacists 
are struggling to stay afloat, for one, and also struggling every day 
just to be able to provide basic care to them because they are under a 
system in which transparency is just not there.

[[Page 6070]]

  You see, the additional topic that I would like to talk about not 
only concerns the transparency issues and the MAC pricing; it is what I 
hear from pharmacists back home, and that is the readiness of the 
Centers for Medicare and Medicaid Services, CMS, to finalize the 
Medicaid drug reimbursement changes in July 2014 immediately upon 
implementing average manufacturer price-based, Federal upper limits for 
Medicaid drugs, as required under the act.
  CMS expects States to view Medicaid reimbursement as a two-part 
formula where the movement toward cost-based drug reimbursement should 
also correspond with changes to dispensing fees based on pharmacy 
costs. I believe that these dual goals are overly ambitious for July 
2014.
  A side note here, I think the entire ACA, or ObamaCare, is not only 
too optimistic but wrong for America, but that is another Special Order 
for another night.
  When we look at this, the thing that I want to look at is that most 
States must take several time-consuming steps before implementation and 
corresponding dispensing fee changes.
  First, many States require legislative or regulatory changes to 
implement the new Federal upper limits. For States that require 
legislative changes, there simply is not enough time to pass the 
necessary legislation. Moreover, in most States, budgets will be 
finalized before these Federal upper limits are scheduled to be 
published.
  In November 2013, CMS stated that if States shift their Medicaid 
reimbursement methodologies, they either should or must conduct cost-
of-dispensing fee surveys to determine fair and equitable total 
Medicaid drug reimbursement rates.
  Finally, most States will need to file a State Plan Amendment with 
CMS prior to implementing the Medicaid reimbursement methodology 
changes. And again, this just adds extra and additional time to the 
process.
  At the end of the day, it seems clear that most States will be unable 
to meet CMS' expectations by the July 2014 deadline. Accordingly, I 
joined with several of my colleagues here in the House to write a 
letter encouraging CMS to give States a 1-year transition period for 
implementation. States need to have more time to effectively transition 
to these new rates. As my colleagues and I wrote in the letter:

       This change will likely represent immediate and significant 
     cuts to Federal matching funds to the States for Medicaid 
     drug product reimbursement and/or cuts to pharmacy Medicaid 
     drug reimbursement.
       Ultimately, such an instantaneous change could result in an 
     unnecessary strain on State Medicaid budgets and Medicaid 
     drug access problems for low-income Americans. Fair 
     reimbursement for pharmacies is critical to ensuring that 
     Medicaid beneficiaries and others maintain access to 
     prescription drugs and pharmacy services.

  Now, I want to take that for just a second, and as my friend from 
Georgia talked about when we actually had to pass a balanced budget in 
Georgia--what a unique concept. Most families do it every year. 
Governments ought to have to do that as well. In the State of Georgia, 
we just couldn't go out and print more money or borrow more money from 
foreign governments or anywhere else we are borrowing it from these 
days. We actually had to do an actual budget. We had to do actual 
spending plans that actually balanced. And for most States, this is an 
issue that often goes untalked about because no one wants to talk about 
the perceived costs and the changes in the costs when State 
governments, who have to balance their budget--Madam Speaker, I know in 
many other States they have to do this as well. You have to plan for 
this. You actually have to put money in the budget to do this. And we 
are not going to simply have time here, and to do so on States is just 
inherently, again--here is this word again--it is unfair. Fairness for 
all.
  I am often struck--before I continue here, I look at this, and I talk 
to many of my independent pharmacists who went to pharmacy school, and 
they had opportunities to do a lot of things. Many of them went back to 
smaller communities to open up their local pharmacy, little, small 
pharmacies or medium-size pharmacies they may have taken over for a 
family member, or they bought a pharmacy out and they love the small 
town atmosphere, they love the rural atmosphere. They could have gone 
anywhere and done a lot of things, but they chose to serve these 
communities in medium cities and small cities all across the Ninth 
District and all across the country. And when they do so, I think they 
were living up to our Founders' belief when it was stated that we come 
here in this country for life, liberty, and the pursuit of happiness.
  The pursuit of happiness is what we have to look at. Pursuit of 
happiness actually is not the guaranty of happiness. There are some in 
this Chamber who believe that the government ought to guaranty 
happiness. That is not what the Founders asked for. They said the 
pursuit of happiness. Life and liberty comes from that pursuit of 
happiness. And we have to provide those independent pharmacies and all 
who live in this arena fair and equitable transparency in reimbursement 
and time. It is about the pursuit of happiness that we look for.
  But also there is another important issue that I look forward to 
hearing back from CMS on. At this point, we are waiting patiently to 
hear from CMS.
  I also recently sent a letter to Secretary of Health and Human 
Services Kathleen Sebelius concerning the Medicare Part D rule proposed 
in January. As CMS makes their final decision as to the contents in the 
rule, we reiterated our support for the provisions of the rule that 
would make prescription drugs more affordable and preserve beneficiary 
access to Medicare Part D.
  Specifically, our letter supported the proposal to: maintain pharmacy 
access by allowing any willing pharmacy to participate in plan networks 
and utilize preferred cost sharing; expand access to and eligibility 
for medication therapy management, leading to improved patient health 
outcomes and decreased health care spending; ensure prescription drug 
pricing transparency by providing pricing updates on a regular basis, 
allowing pharmacies to plan their business operations more efficiently.
  As our letter stated:

       Patients should be free to select a health plan that best 
     fits their personal health needs and allows them to utilize 
     accessible pharmacies.
       At the same time, pharmacists deserve the clarity necessary 
     to plan their business operations more efficiently to help 
     achieve a more effective Part D program for beneficiaries.

  It is my hope that CMS will adopt these proposals in their final 
rule. However, again, I don't live on hope. I do not believe hope is a 
plan. So if they do not, I believe Congress needs to act, and we will 
continue to look for solutions there.
  I believe that, further, these changes that I have talked about will 
further strengthen the Medicare Part D program and make it even more 
successful than it is today. There are cost issues among everything. 
Medicare Part D is no exception. But we have got to make it in a way in 
which our local independent pharmacies and the health care system in 
general is helped by these pharmacists who simply want to help the 
people who walk in their door.
  They want to be able to give them treatment. They want to be able to 
help in the eligibility and access to the medication therapy management 
programs. They want to be able to talk to their patients and be able to 
help them get the best pricing and the best plans for them. And they 
don't want to be locked out from a system in which pharmacy benefit 
managers are basically keeping them out.
  As I have shared from this floor before, if we don't make changes and 
we don't start looking to our independent pharmacies all across this 
country, the sad part is one of the independent pharmacies told me, if 
we can't get some help, if we can't be allowed to participate in the 
program, then we are looking forward to a time in which independent 
pharmacies may disappear from the business landscape and the medical 
community landscape.
  For me, as I look and as I think about those who serve me and my 
family, I can't think of a place in the

[[Page 6071]]

Ninth District of Georgia or Hall County and the places that I serve or 
really anywhere else, Madam Speaker, in which our communities would be 
better off without these local men and women who run businesses, who 
get up every morning because they want to serve and they want to help.
  When we look at that, is that not what America is about? Is that not 
what we were founded on, that pursuit of happiness, that getting up and 
doing something that fulfills us and that gives us the knowledge that 
we can go and do something that makes a difference? But, unfortunately, 
the position of our government in some of these programs right now is 
telling the independent pharmacist: you are not valued.
  I will tell you this. This Member of Congress values them, and I 
believe there are a lot of other Members of this Congress that value 
them as well, and we are going to continue to fight hard for the 
changes that I spoke to tonight. As we look back on what we talked 
about, I do appreciate my friend from Georgia coming, and I do ask that 
all of our Members look at H.R. 4437, the Generic Drug Pricing Fairness 
Act, and I would encourage them to be original cosponsors and be a part 
of the bill that has just been dropped. We want them to be a part of 
this because this is a conversation that both sides of the aisle can 
have when it comes to dealing with our folks back home and all across 
this country.
  Fairness is what it is all about.
  With that, Madam Speaker, I yield back the balance of my time.

                          ____________________