[Congressional Record (Bound Edition), Volume 162 (2016), Part 9]
[House]
[Pages 12584-12592]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         COMMUNITY PHARMACISTS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2015, the gentleman from Georgia (Mr. Collins) is recognized 
for 60 minutes as the designee of the majority leader.


                             General Leave

  Mr. COLLINS of Georgia. Mr. Speaker, before I begin, I ask unanimous 
consent that all Members have 5 legislative days to revise and extend 
their remarks and to include any extraneous material on the topic of 
this Special Order.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Georgia?
  There was no objection.
  Mr. COLLINS of Georgia. Mr. Speaker, well, we are back at it tonight. 
We are going to be going at a subject that I have been down here before 
on and will continue to come down here on until, frankly, I believe 
that we are moving forward with this issue that affects pretty much 
every hometown of every Congressman here. It is amazing, though, how 
much we don't know about it. It is amazing how much it goes unreported 
and how much it gets looked over.
  In the sake of the shiny object of savings, our community 
pharmacists, our independent pharmacists, are being basically run out 
of business. Mr. Speaker, I don't tell you anything new.
  For my friends who will join me here tonight, this is about hometown 
America. This is about the healthcare chain that we all talk about. And 
a forgotten element of that healthcare chain is something that we need 
to focus on.

[[Page 12585]]

  Community pharmacists fill an important niche in our healthcare 
system, serving as the primary healthcare provider for over 62 million 
Americans. They dispense roughly 40 percent of the prescriptions 
nationwide and a higher percentage in rural areas, especially mine in 
northeast Georgia.
  Community pharmacists play such an important role in our healthcare 
system by being that accessible voice at the other end of the phone or 
at the counter, just being there sometimes to answer those simple 
questions that are very important to somebody, or to answer the 
difficult questions that could, frankly, mean the life or death for 
that patient, knowing how to take their medication, knowing what to get 
and how to be there and be a part of the community, not just at the 
pharmacy, but at the ball fields and the community. Some of the best 
small business employees that we have in our communities are found in 
our community pharmacies.
  When we look at the relationship that communities have with their 
pharmacies, and especially our community pharmacists, the face-to-face 
counseling and the work that goes into our community pharmacies, and 
pharmacists mainly in general, is something that we need to continue to 
focus on.
  Patients' failure to properly take their medication regimen costs the 
healthcare system nearly $300 billion and contributes to 125,000 deaths 
each year. The face-to-face counseling that our community pharmacists 
give is the most important and the most effective way for ensuring that 
our patients take the right medicine, know what they are taking, and 
why they take it.
  Yet, as I stated before and state here again on the floor tonight, 
there is a group that believes that our community pharmacists--really 
frankly if you just look at it--shouldn't exist. Because everything 
they are doing, the pharmacy benefit manager, the PBM, that middle 
person--I want to show you this. We are going to talk about this chart 
more here as we go--but the PBMs control the pharmacy system right now. 
In fact, if you just take the PPM here in the middle and you look at 
employers and you look at patients and you look at the pharmaceutical 
companies and you look at the pharmacies, they sort of circle around 
here.
  We are going to talk about this ``savings issue'' and look at it and 
ask: Is it actually saving employers? Is it actually helping 
pharmaceutical companies get out products? More importantly, is it 
actually helping the patient?
  I think tonight you are going to find out that there are a lot of 
questions to be had here. We will talk about that as we go forward.
  As we look at this, we have a lot of things that my friends tonight 
are here to talk about. We are going to talk about MAC transparency. We 
are going to talk about generics. We are going to talk about the way 
this goes, but we are also going to talk about really what I believe is 
the unfair tactics used by PBMs that are constantly forcing our 
pharmacies and our community pharmacists out of business.
  I think, at some point in time, many of the PBMs ought to change 
their mission in life into ``saving'' or being a part of the 
pharmaceutical system and say: our job is to run community pharmacists 
out of a job. They are the best I have ever seen at doing that.
  In one of my small towns just 20 minutes from my house, in the past 
year, three community pharmacies have closed. Three. They are now in a 
smaller town being forced into choices they didn't want to have to 
make, into PBM-controlled pharmacies.
  You see, PBMs, when they first started, had a good idea: How do we 
make sure that we get drugs and medications to pharmacies at a cheaper 
price so that the patients at the end save money and employers can save 
money?
  Then PBMs decided that they wanted to be a part of all the system. 
They wanted to start owning pharmacies. They wanted to start owning the 
supply chain. They wanted to start being a part of it all. And when 
they did that then everybody else was competition.
  I have said it before from here: The problems that we have--and 
Georgia pharmacists have talked about it, and we have talked about it 
as well--is when you have your competitors who are able to come in and 
audit you and they are able to fine you for clerical errors and keep 
you out of systems and out of payments and things that they give their 
own pharmacies, that is just wrong. It is wrong when they only come in 
and audit the name brands and leave the generics behind.
  For some of you, if you are watching, if you are thinking about it 
and hearing my voice for the first time, you are maybe saying: Well, 
that is okay. They are making sure systems are safe.
  PBMs are not auditing pharmacies to make sure they are safe. They are 
auditing pharmacies to make money because they are going to withhold 
the cost of the drug from the pharmacist. In other words, if they make 
a clerical error and the drug costs $100, let's just say, they don't 
take their profit. They don't take the margin. They take the entire 
$100 back. I wish I had a racket set up that good.
  The sad part about that whole statement there is, at the end of the 
day, Joe or Suzy or Bob or Bill or whoever came and got their 
prescription knew nothing about this ``error.'' All they knew is the 
pharmacist filled the prescription that the doctor had ordered, and 
they went home and took their medicine and got better.
  Yet, on this other end, PBMs are trying to destroy an industry and a 
group of people who mean so much to our communities. So tonight we are 
going to talk about it. We are going to talk about it some more, and we 
are going to keep bringing attention to this until the light is fully 
shined on this.
  Tonight, as we get ready to talk about it, a gentleman who has been 
such a friend to us as we have been doing these, Representative 
Loebsack, is here tonight. It is good to share the stage again with him 
because this is something that needs to be discussed. It needs to be 
hammered home until every Member of the House and Senate understand 
this and we find a workable solution.
  I yield to the gentleman from Iowa (Mr. Loebsack).
  Mr. LOEBSACK. Mr. Speaker, I thank the gentleman from Georgia (Mr. 
Collins) for inviting me to join him in leading this Special Order. I 
have been in this job long enough to know there are people you don't 
want to follow when you speak, and Doug Collins is one of those. The 
guy is absolutely inspired, but he is inspired for a lot of reasons.
  He has been a strong leader on pharmacy issues. He has been a great 
partner on the bills that we will discuss this evening. I am proud to 
say this is a bipartisan issue. Although, at the moment, I am the only 
Democrat over here, I can assure you there are others who are with us 
on this issue.
  Mr. COLLINS of Georgia. Well, bring them on.
  I yield to the gentleman from Iowa.
  Mr. LOEBSACK. Mr. Speaker, we have been able to find a consensus on 
this, too, among this bipartisan group of folks.
  As my good friend said: Pharmacists across the country serve as the 
first line, really, of healthcare services for many patients, 
especially in small towns in Iowa and around the country. People count 
on pharmacists' training and expertise to stay healthy and informed and 
maybe, most importantly, to stay out of urgent care centers and 
hospitals, something we all want to see happen.
  I am proud to stand here today with my colleagues to recognize the 
quality, affordable, and personal care that pharmacists provide every 
day.
  Community pharmacists and their pharmacies are also a great source of 
economic growth in rural communities, like those in my district in 
Iowa. I have 24 counties. It is a big area. And when a pharmacy is 
under pressure economically, the community knows it and hears about it. 
And if they have to close, the community suffers as a result.
  As a member of the Small Business Caucus, I recognize how challenging 
it can be for some small pharmacists to compete with bigger companies. 
I appreciate their hard work to serve our communities every day.

[[Page 12586]]

  Like most small-business owners, community pharmacists face many 
challenges to compete and negotiate on a day-to-day basis with large 
entities in their business transactions. I frequently visit with 
community pharmacists in my district, and I have heard directly from 
them how hard they have to fight to compete on a level playing field 
that isn't always level for smaller pharmacies. So it is not really a 
level playing field.
  One pressing challenge facing many community pharmacists, as was 
already mentioned, is the ambiguity and the uncertainty surrounding the 
reimbursement of generic drugs. Of all things, it is the reimbursement 
of generic drugs.
  Generic prescription drugs account for the vast majority of drugs 
dispensed by pharmacists, making transparency in reimbursement 
absolutely critical to the financial health of small pharmacies. 
However, pharmacists are reimbursed for generic drugs through maximum 
allowable cost, or MAC, a price list that outlines the upper limit or 
the maximum amount that an insurance plan will pay for a generic drug. 
And these lists are created, as was mentioned, by none other than the 
pharmacy benefit managers, or PBMs, the drug middlemen, if you will.
  The methodology used to create these lists is not disclosed. Further, 
these lists are not updated on a regular basis, resulting in 
pharmacists being reimbursed below what it costs them actually to 
acquire the drugs. This is a major problem because, when PBMs aren't 
keeping the cost of generic drugs consistent, those price differentials 
can be a serious financial burden for pharmacies.
  Small pharmacy owners face even greater disadvantages than their 
larger counterparts because of the clear lack of leverage they have 
when negotiating the amount they will be reimbursed for filling 
prescriptions when dealing with the PBMs.
  When we talk about pharmacies closing because they can't keep up with 
the financial challenge, we are talking about the creation of an access 
problem also that directly affects patients. It is not just the 
pharmacies themselves closing down and those folks losing their jobs. 
It is the patients they serve.
  When we talk about reimbursement uncertainty for pharmacies, we are 
talking about uncertainty about patients' ability to get the 
medications they need at an affordable price.
  When we talked about a community pharmacist being put out of work, we 
are talking about taking away a familiar face that local folks trust 
with their healthcare concerns.
  To address this problem--and Representative Collins is going to talk 
about this, and others are--I partnered with him to introduce H.R. 244, 
the MAC Transparency Act. We have had actions along this line in the 
State of Iowa as well. We can do it at the Federal level if we can do 
it at the State level.
  This bipartisan bill would ensure Federal health plan reimbursements 
to pharmacies to keep pace with generic drug prices, which can 
skyrocket overnight.
  So specifically--and I know Mr. Collins is going to talk about this--
it will do three things. It will provide pricing updates at least once 
every 7 days. It will force disclosure of the sources used to update 
the maximum allowable cost, or MAC, prices. Again, it is about 
transparency. It will require PBMs to notify pharmacies of any changes 
in individual drug prices before these prices can be used as the basis 
for reimbursement.
  This is a commonsense bill, folks. It is about access. It is about 
making sure folks have access to their pharmaceuticals, to their drugs, 
and generic drugs in particular.
  Another issue I would like to highlight is the problem of direct and 
indirect remuneration, or DIR fees. The Centers for Medicare and 
Medicaid Services, CMS, originally coined DIR fees as a means of 
assessing the impact on Medicare part D medication costs of drug 
rebates and other price adjustments applied to prescription drug plans.
  However, DIR fees have increased greatly over the last year on 
pharmacies, and, if the pharmacy agrees to enter into a contract with a 
PBM or part D plan sponsor, it does not seem fair that these mediators 
can reduce the reimbursement rate since the contract has already been 
agreed to.

                              {time}  2030

  This gets a little bit complicated. I know other Members are going to 
be talking about this later on as well. There is just basically no 
transparency regarding how the fees are calculated.
  There is another bill that I have signed on to. I applaud my 
colleagues, Representative Morgan Griffith, a Republican, and Peter 
Welch, a Democrat, for introducing the Improving Transparency and 
Accuracy in Medicare Part D Spending Act. It would prohibit PBMs and 
plan sponsors who own PBMs from retroactively reducing reimbursement on 
clean claims submitted by pharmacies after the contract has been 
submitted. This is a scam, and it shouldn't be happening. I urge 
everyone, leadership, to bring this to us and everyone to vote for this 
bill and for our other bill.
  I want to thank, again, Mr. Collins and the other Members who have 
been here tonight. It is a great opportunity for me to participate and 
highlight some problems that our community pharmacists are facing and 
then, ultimately, their patients, the folks they serve as well. Those 
are the folks we are trying to look out for as best we can and trying 
to serve while we are here in this Congress. I thank Mr. Collins very 
much.
  Mr. COLLINS of Georgia. Madam Speaker, Mr. Loebsack hit it. That last 
little part right there was dead-on. This is about the patient. This is 
about serving that patient who is used to that trust and faith, who 
understands it, and also really a part of that healthcare system that 
has been provided a long time that is now at risk of going away.
  It is not too strong to say that if we do not look at this--and some 
say, well, this is a free market, let them go contract. Government is 
one of the biggest payers of this, and this is something we have got to 
get at.
  In fact, something Mr. Loebsack brought up as I was listening to him 
talk, there was a study, TRICARE, in fact. In just a moment, I am going 
to introduce Mr. Scott here. He is from Georgia. He is on the Committee 
on Armed Services. He is a friend. But TRICARE did a study where it 
found that, if it eliminated PBMs from the TRICARE program, it would 
save roughly $1.3 billion per year. We are up here arguing about 
problems in our budget, and we could save this much money?
  No, this is about profits. This is about consolidation. This is about 
vertical integration. This is about taking control of a market in which 
three to four companies control 83 percent of the market. We are not 
talking about a small little startup. Mr. Loebsack is right on, dead-
on. I thank him so much for the work that he is doing, and I appreciate 
it.
  In light of that, especially dealing with TRICARE, again, the bottom-
line issue here is how we cost-effectively provide services to those 
members in our communities who need it the most. And this issue of 
savings, I know there is a Texas study that also showed if they went 
away, they would save money as well, in the millions of dollars. It is 
building, but we have just got to keep pointing it out.
  I yield to the gentleman from Georgia (Mr. Austin Scott), my friend, 
my longtime colleague not only in the House in Georgia, but the House 
up here, and fighting for the very values we find in Georgia and all 
across the country.
  Mr. AUSTIN SCOTT of Georgia. Madam Speaker, I want to thank Mr. 
Collins and I want to thank my colleague from Iowa. This is a 
bipartisan issue.
  Before I speak on behalf of the community pharmacists, I want to just 
take a second and speak on behalf of the taxpayers, the hardworking men 
and women in this country.
  Free markets are transparent markets, and if we had transparency in 
the

[[Page 12587]]

system, we probably wouldn't be here today because the American public 
wouldn't stand for what is going on. Unfortunately, we haven't seen any 
news reports or any reporting to inform the public of all of the things 
that have happened over the last couple of years, but we saw it on the 
EpiPen just a couple of weeks ago. You saw what happens when the press 
reports, the public finds out what is going on: pressure is put on, and 
then a response comes--maybe not the response that would have been what 
we would call equitable for the patients that need the treatment, but 
at least a response came.
  It is not just EpiPens, though. It is not just multihundred-dollar 
drugs and multithousand-dollar drugs. When we talk about drugs as 
simple as nitroglycerin tablets, again, you, as the taxpayer, are the 
largest purchaser of this through the government. Nitroglycerin tablets 
have gone from 5 cents apiece to $5 apiece. Doxycycline tablets, an 
antibiotic that has been on the market for many, many years--again, 
another generic drug. It has gone from pennies apiece to dollars 
apiece.
  I know my colleague, Buddy Carter, could probably name more drugs for 
you than I can where we have seen those same type of hundredfold 
increases in the price of drugs. I can tell you that the hardworking 
taxpayers of this country, in the end, pay that bill.
  One of the best things that we can do for you is make sure that we 
are trying to shed light on and bring transparency to this system and 
to make sure that we are keeping that small-business owner in business 
so that we are able to get the information that we need to do a better 
job for you from them. That is where our Nation's community pharmacists 
come in.
  I know for me, I walk into my local pharmacist, and they can tell me 
right offhand what the most egregious price increases were of the past 
week, and they are happening every single week, ladies and gentlemen. 
These independent businesses operate in underserved rural areas, like 
many of the counties that I represent in Georgia's Eighth District.
  Access to care is already an issue in these areas, and it would 
certainly be much worse if our community pharmacies didn't exist. In 
these areas, doctors are many miles away. Local pharmacists deliver the 
flu shots. They give advice on everything from over-the-counter drugs 
to drug interdictions, and if you have got a sick child, most of them 
will meet you at the store after hours to help your child get the 
medication that they need. Try that with somebody who is not a small-
business owner.
  It is crucial that these pharmacies have a level playing field to 
stay in business against large-scale competitors and the middlemen, if 
you will, the pharmacy benefit managers, when trying to run a 
successful business in such a challenging and complex environment as 
the U.S. healthcare system.
  Where I am from, these local pharmacists are fixtures in their 
communities. They have known their customers most of their lives, and 
it instills a level of trust in those patients that is rarely seen in 
today's day and time.
  I have made some stops at these local community pharmacies: some to 
get my own prescriptions filled, some to see how things are going with 
the small-business owners, some to see how other things are going in 
the community. I never fail to appreciate the unique value that the men 
and women that work in these local pharmacies add to their customers' 
lives and to our communities.
  Unfortunately, on these visits, I am also troubled because I continue 
to learn, as I have mentioned before, just how much more difficult it 
is becoming for those men and women to serve the people who have 
depended on them for years and to compete with some of the larger 
entities in the healthcare marketplace.
  Imagine a situation where your competitor's company gets to come in 
and audit your books. That is exactly what happens. That is exactly 
what happens when one of the big-box retailers who owns a PBM goes in 
and audits the local community pharmacy.
  Take, for example, one of the other problems that we have: the 
increased prevalence of preferred networks in Medicare part D plans. 
Currently, many Medicare beneficiaries are effectively told by pharmacy 
benefit managers, or PBMs, which pharmacy to use based on exclusionary 
agreements between those PBMs and, for the most part, big-box 
pharmacies.
  Most people don't recognize that the big-box owns the PBM. Patients 
pay for this. They pay for this in lower customer service and higher 
copays. When their pharmacy of choice is excluded from the preferred 
network, it creates undue stress on the patients and forces them to do 
business where they may not want to do business. The majority of the 
time, your local pharmacy is never given the opportunity to participate 
in the network. That is an unfair business practice.
  Another issue I often hear about from community pharmacies is the 
burdensome DIR fees. We as Americans, we pretty much assume that when 
you go in and you buy something and you leave with what you pay for 
that the transaction is over. But with medicine at your local pharmacy, 
it is a lot different. That transaction is anything but clear and 
simple for the pharmacist.
  Pharmacy benefit managers use so-called DIR fees to claw back money 
from pharmacies on individual claims long after the claim has been 
resolved. It can be a typographical error and the pharmacy benefit 
manager will call back 100 percent of what was paid to the pharmacist. 
That means the pharmacy doesn't know the final reimbursement amount 
they will receive for a claim for weeks or even months; and even more 
so, they are not even reimbursed for the wholesale cost of the drugs 
that they dispense. In 2014, CMS issued proposed guidance that would 
provide some relief to our pharmacies struggling to deal with the 
increasing and opaque DIR fees imposed on them.
  As I said, anyone who runs a business knows you can't operate when 
you don't know what your costs are or what your reimbursements are. 
That is why I have led over 30 of my colleagues in sending two separate 
letters to the Centers for Medicare and Medicaid Services urging them 
to move forward and finalize proposed guidance on this issue. 
Unfortunately, they have yet to move on that guidance.
  I and, I know, many of my colleagues, in a bipartisan manner, are 
going to continue to advocate for CMS to use their authority to ensure 
a level playing field for all Medicare part D participants. When 
competition is stifled and our small businesses suffer, so do the 
customers of our local community pharmacies. I hope the committees of 
jurisdiction will consider these bipartisan bills.
  Madam Speaker, I want to thank you for your time. I want to thank Mr. 
Collins for hosting this Special Order today.
  Mr. COLLINS of Georgia. Madam Speaker, I thank Congressman Scott. He 
has highlighted a lot of things, and I think it is something that just 
matters. Sometimes we go through a lot of the big pictures up here, and 
we see a lot of issues, but this is one that matters to hometown. This 
is Main Street USA. This is something that goes on. Especially for 
districts like mine and for many others in rural communities, the 
pharmacy, especially the independent community pharmacies, are the 
lifeblood in these communities.
  I have said this before, and I have had this asked of me because we 
have been doing this a while. Let's make it very clear. Pharmacists, I 
love. I don't care who they work for. Pharmacists are great folks, 
whether they work in a big-box store or they work for a major chain or 
they are independent and own their own business. Pharmacists want to 
help people. That is why they went into it to start with.
  I think what we are fighting here is a system. I have talked to many 
pharmacy students who are now saying they are not sure they want to go 
into this or they are very concerned about their futures because they 
are looking at the abusive policies of PBMs, and they are saying: I 
don't want to follow in my mom or dad's footsteps; I don't

[[Page 12588]]

want to follow and open up a storefront and hire people because I can't 
make it this way. And they end up being forced in.
  I want to talk a little bit--we have been vague about this, but I am 
not going to be vague here for the next little bit. I am going to talk 
about PBMs and this regular auditing of community pharmacists to 
recruit large reimbursements. Let me go back over this.
  There is nothing wrong with audits performed with the intention of 
uncovering abuse; however, PBMs' auditing has another motivation. 
Pharmacists have told me that the most expensive prescriptions are 
always the target during the audit--always.
  PBMs used to audit only the most expensive medications looking for 
clerical errors like typos, misspelled names or addresses, or, better 
yet, as I just heard recently from one of my pharmacists, in which they 
dinged one of my pharmacists because the doctor wrote a specific amount 
for an eye medication--the doctor. Let's make this very clear now. I 
know Representative Carter is probably going to get into this a little 
bit more, but the doctor himself wrote the prescription. The 
prescription goes to the pharmacist. The pharmacist filled the 
prescription as the doctor said. But when the PBM auditor got there, 
they said: No, you are not supposed to use that amount. Use this 
amount.
  I want to know what medical school this auditor went to. I want to 
know when they decided to start practicing medicine without a license 
where they can come in and say amounts. I can understand swerving to a 
generic over a name brand or a name brand over a generic. That is 
within sort of what we have become used to. But when they can actually 
go in and ding one of our pharmacists for amounts that the doctor said, 
we have got a system that is a little bit abusive. Well, let me 
rephrase that. It is downright corrupt.
  They go in and they do these audits. They find these clerical errors. 
And when they do this, they take back, they recoup, all the funding 
paid for that prescription. Like I said earlier, they don't take back 
just the profit. They don't take back the cost. They take back 
everything.
  These audits are not intended to end Medicare fraud. The PBMs use 
them to take taxpayer funds and claim them as profits. If a pharmacist 
checked the box that said send by fax instead of send by email, the PBM 
is able to reclaim the entire cost of the drug. They don't just take 
back the copay or the pharmacist's profit.
  Again, I just want you to understand how crazy this is. But, you see, 
instead of looking and having their time and effort of audits that 
could be better spent helping local pharmacists do what they do best, 
they are having to look over this all the time, focusing on improved 
quality for their patients.

                              {time}  2045

  The PBMs, frankly, have shown over the last little bit that they are 
not interested in the well-being of the patient. They are interested in 
that other P word, profit, not patient.
  It is really concerning, and this is what has happened. In the 
interest of that profit, the PBMs have engaged in anticompetitive 
business practices. Certain PBMs own or have ownership stakes in the 
very pharmacies they are negotiating to lower drug prices with. When a 
PBM is owned by the entity it is supposed to be bargaining with, there 
is an inherent conflict of interest. This can lead to fraud, deception, 
anticompetitive conduct, and higher prices.
  Here is a great one. I love this. Many large PBMs own their own mail 
order pharmacy and financially penalize patients that use their 
community pharmacist instead of the PBM-owned one. PBMs try to drive 
customers from community pharmacies into the mail order firms, arguing 
it saves consumers and drug plans money.
  However, a study by the Taxpayers Protection Alliance highlighted 
waste, fraud, and abuse within the mail order system run by the PBMs. 
The TPA study noted that 90 percent of patients were moved to mail 
order due to encouragement or mandate from a PBM.
  According to Medicare data, PBM-owned pharmacies may charge as much 
as 83 percent more to fill prescriptions than community pharmacists. 
PBM's practices limit consumer choice, increase drug prices by engaging 
in vertical integration in their ownership of mail order pharmacies, 
killing competition.
  And here was one that was classic. I walked into one of my smaller 
towns. It had a pharmacist. And the pharmacist said: I got in trouble. 
I got a letter.
  They showed me the letter. They delivered some medicine to some of 
their customers. They get a letter from the PBM saying, You are not in 
the mail order business. And they actually were going to have their 
contract threatened if they sent these people their drugs.
  Representative Carter is going to talk in a minute. I just want to 
break for a second. But that is unbelievable that they actually will 
get on the pharmacies and say: You can't reach out, you can't contact 
your customer to tell them that they can be a part of the plan.
  One of my pharmacists actually was left off of a plan that they were 
actually on. The PBM sent a letter to all his customers saying that 
they are not a part of the plan, when, in actuality, he was. And then, 
when confronted, they refused to send a letter out to the customers 
saying: We are wrong.
  Just briefly, am I highlighting something that is uncommon? Or is 
that a common practice?
  Mr. CARTER of Georgia. No. It is. As the gentleman states, it is a 
very common practice. And you know, it is downright unAmerican.
  Small businesses are the backbone of our economy here in America. 
When you do not allow a small business to participate, even if they are 
willing to take the reimbursement that an insurance company is 
offering, but that insurance company, nevertheless, will not let them 
participate, that, in my opinion, is unAmerican.
  Mr. COLLINS of Georgia. You have hit something. You have led into a 
great example. This is highlight. And if there are problems, let's fix 
them. You hit on that issue.
  We have heard of DIR fees tonight. We have heard about 
reimbursements. Let me leave you an example from a little company 
called Humana.
  I had a pharmacist call me about proposed amendments to their 
Pharmacy Provider Agreement. Humana decided to withhold $5 per 
prescription from initial reimbursements to the pharmacy. Now, you 
understand what is happening. They are withholding $5 of what they 
should be sending to the pharmacy. The return of the reimbursements was 
conditional on the pharmacy meeting certain patient adherence metrics. 
This is essentially a fee conditional on meeting certain performance 
standards, and Humana would withhold reimbursements from poorly 
performing pharmacies.
  That sounds good, doesn't it?
  It has got a great twang to it. Somebody in the marketing office 
there thought, This is going to be pretty cool. It sounds so good, but 
let's talk about it.
  Humana's criteria, however, had little to do with patient care and 
more with driving community pharmacists out of the market. Many of the 
metrics used, including patient adherence, are beyond the control of 
the pharmacist.
  Humana's amendment unduly burdens small pharmacists and protects 
large chain pharmacies, many of which they own. Humana enlisted their 
actuaries to ensure this formula guarantees they will retain 60 percent 
of the withheld reimbursement moneys, most of it coming from community 
pharmacists.
  Pharmacists in the 80th percentile and up in each category would 
receive $2 per category. If a pharmacy meets expectations in all three 
categories, they will earn $6--a $1 profit per prescription. Now, 
remember, this is what was already withheld from them. Pharmacists 
below the 80th percentile would receive .67, or 67 cents; and below the 
50 percent percentile would receive none of the reimbursement that they 
withheld. This is a reimbursement that is supposed to go back to the 
pharmacy. They are not getting any of it. Many of the community 
pharmacists often can't afford to lose this

[[Page 12589]]

additional 33 cents to $5 for every prescription they fill. Only big 
box pharmacies really have that ability.
  Humana also favors big box pharmacies by allowing the number of 
patients to serve as a function of a tiebreaker. This amazed me. For 
example, a community pharmacist and a big box pharmacist might both 
have 100 percent adherence to certain performance measures. However, if 
the big box pharmacy served more patients than the community 
pharmacist, it will achieve a higher percentile score than the 
community pharmacy.
  Humana disproportionately favors large chain pharmacies at the small 
pharmacies' expense. Certain pharmacies have enough patients to 
minimize the effects of patient nonadherence to their ratings. At 
independent community pharmacies, one patient's nonadherence could cost 
pharmacies thousands of dollars by moving a pharmacy from the top 
bracket to one below.
  If somebody were listening to us, Representative Carter, they would 
say we were making this up. We are not. I have been doing this now for 
well over a year--almost 2 years now. I have never been challenged on 
these facts. They don't like it. And they are listening probably right 
now, saying: What can we do to go settle this down?
  But it is just not right when they look at these things and they see 
savings in the State governments. It is like they are saying: Look at 
the shiny object over here. Don't face reality.
  This one is just amazing to me. When you are taking money that should 
go back to the pharmacist and putting them on this metric scale that 
they can't compete on; or you are taking their customers, but won't 
allow the pharmacist to reach out, these are the kinds of things that 
just really, really are amazing to me.
  I wrote a letter with the gentleman urging CMS Acting Administrator 
Slavitt to review Humana's proposed amendments for their part D 
Pharmacy Provider Agreement. This is just something that has got to 
change as we go forward.
  There is nobody that knows that any better than Representative 
Carter, knowing the situation. I have said this all along. I do this 
because I have been helped so much by community pharmacists and believe 
when wrong is wrong, you call it. When you can, try and make it right.
  You have lived this. And you continue, by your service on the Georgia 
legislature and up here, to help us continue to be on the front lines, 
continuing this fight. You are there working it out as well.
  Tonight, I think we just need to continue the practice of saying, 
Here are the facts, and encouraging our committees of jurisdiction to 
take action on this and just evaluate it.
  We have the MAC transparency, the clawback bill. These bills have a 
chance just to be heard, because I found that every time I share this 
with Members, they can't believe it. They want to know more. And when 
we show them the facts, they say: This needs to be discussed.
  We have some time tonight. I want to share what you are seeing as we 
continue this fight for what is right.
  Mr. CARTER of Georgia. Well, I want to thank the gentleman for 
organizing this and for bringing this to light.
  This is something that I know you are obviously very passionate about 
and that you have worked on for a long time; many years.
  You know, it is not just you. You are obviously a leader here. But 
also, Representative Scott, who spoke earlier. Representative Loebsack. 
I may be the only pharmacist in Congress, but we have many friends of 
pharmacy in Congress, and we appreciate this very much.
  But even more so--if I may, even more so, what you are concerned 
about, what Representative Scott, what Representative Loebsack, what 
everyone up here is concerned about is patient care. That is what we 
are talking about.
  Mr. COLLINS of Georgia. Exactly. What you are saying, every time we 
do this, we gain Members who begin to look at the issue. They just 
don't believe what the PBMs bring to them.
  All I am asking for me and I know for you is for every Member here to 
go talk to a community pharmacist. All they have to do is go talk to 
them. We are not sharing anything that is not real.
  Mr. CARTER of Georgia. That is the whole key. The whole key is that 
what we are talking about is patient care. We are not talking about 
community pharmacies trying to pad their pockets. But what we are 
trying to point out and what you have done so efficiently, particularly 
with your chart, is to point out what is happening here.
  Everyone is concerned about high drug prices right now. It is one of 
the biggest subjects that we hear about in the newscasts and 
everywhere. Granted, this is not the only part of that, but it is a big 
part of it.
  What is happening is we are taking competition out of health care. If 
we talk about ObamaCare, if we talk about the Affordable Care Act, 
ObamaCare, whatever you want to call it, my number one concern with is 
that it has taken competition, it has taken the free market out of 
health care.
  I mean, think about it. Am I talking just about independent retail 
pharmacies?
  No. I am talking about independent health care.
  How many independent doctors do you know anymore?
  Most of them are members of healthcare systems, most of them are 
members of hospital systems, which are fine systems, but, again, we are 
taking away competition. And that is what is happening here.
  I thank Representative Collins. I want to thank him for, again, 
organizing and bringing this to light.
  As you have mentioned, I have been a community pharmacist for over 30 
years. I graduated from the University of Georgia in 1980. Go Dogs. I 
am just as proud as I can be of my alma mater.
  You know, pharmacy has changed tremendously since I graduated. I 
serve on the advisory board at the University of Georgia at the College 
of Pharmacy, and I can tell you the quality of students that are 
graduating now from pharmacy school is just tremendous. The clinical 
expertise that they are graduating with makes us all in health care 
very, very proud. I still maintain that pharmacists are some of the 
most overtrained and underutilized professionals out there.
  But, again, I want to get back in full disclosure here. I am a free 
market person. I am someone who believes in the free market. I believe 
in competition. And that is all community pharmacists are saying: Let 
us compete.
  But as Representative Collins has pointed out so succinctly here, we 
don't even have the opportunity to compete.
  When you have the insurance company owning the pharmacy and making 
decisions that impact patients and where they can go and tell patients, 
No, you cannot buy your prescription over here, you have to buy it over 
here, that takes the free market out of the system. That takes 
competition out of the system.
  Who cannot see that?
  There are chains there who will tell you that their operation is a 
three-legged stool. They have the PBMs, they have the pharmacy, and now 
they have their health clinics.
  Well, what does that do?
  It is a great business model, sure, but once they get you, they got 
you. If you go to a pharmacy and they write that prescription, and then 
that prescription is filled right there, well, obviously, that is a 
conflict of interest. But that is what is happening now. If the 
insurance company owns the pharmacy and tells you that you have to go 
to this pharmacy, that is a problem.
  True story. I owned three community pharmacies before I became a 
Member of Congress. My wife owns them now. While I still owned those 
pharmacies, I filled a prescription for my wife at the pharmacy that I 
own. This was about 3 or 4 years ago. Later on that night, she got a 
call from the insurance company encouraging her to get that 
prescription filled at another pharmacy. I am telling you, this is 
true. Honest. That is just crazy.
  Mr. COLLINS of Georgia. Yet, if you had done that, they would have 
cut your contract off.

[[Page 12590]]


  Mr. CARTER of Georgia. Well, exactly.
  Mr. COLLINS of Georgia. You can't engage in that kind of practice. It 
is just amazing.
  Mr. CARTER of Georgia. Well, it begs the question: How did they know 
about it?
  Here is how they know about it. What happens when you bring a 
prescription into a pharmacy is we fill that prescription and we 
adjudicate the claim. What that means is that the community pharmacy's 
computer calls the insurance company's computer and it tells you 
automatically whether they are going to pay it and how much they are 
going to pay.
  Well, guess what?
  That pharmacy that owns that insurance company that I just called, 
they have that information. Yes, there are laws against it. There is 
supposed to be a wall there in between them, but you tell me how that 
pharmacy knew that my wife had a prescription filled that day at the 
community pharmacy that I owned at that time.

                              {time}  2100

  Obviously, that is what is happening. Representative Collins, you 
have introduced your bill, a great bill. It has to do with MAC 
transparency, MAC, maximum allowable costs. Let me tell you very 
quickly what maximum allowable cost is.
  We talk about acronyms. Well, nobody uses as many acronyms as the 
Federal Government uses. I tell people all the time that one of my 
goals in Congress is to learn at least 10 percent of all the acronyms 
that we use up here.
  But the acronym, MAC, M-A-C, maximum allowable cost, what that is is 
that insurance companies come up with a list and they say this is what 
we are going to pay you. This is the maximum we are going to pay you. 
If you can't buy it any cheaper than that then, I am sorry; you are 
just going to lose money.
  Well, that is okay to a certain extent. We understand that. We can 
work within that. But what happens is they don't update it, so all of a 
sudden--and you have seen it. We have all experienced what has happened 
with the spikes in drug costs here recently, particularly in generic 
drugs. What happens is that drug goes up. Well, the insurance company 
drags their feet and they don't increase that maximum allowable cost 
and, all of a sudden, the pharmacy is dispensing something at a loss.
  Well, that is obviously a business model that is not going to 
sustain. You are not going to be able to stay in business if you are 
dispensing something and losing money on it.
  Then, how do they come up with this MAC list?
  What we are talking about here, and what Representative Collins' bill 
addresses is what is called MAC transparency. All we are asking here is 
to shine light on this, is to have some transparency, so we can see 
exactly what is going on. And that is what his bill does, and we 
appreciate his work on that very much.
  His bill is a step forward, not only for the industry, but again, for 
the beneficiary, for the patient. That is ultimately who is going to 
save money, and that is ultimately what we are trying to do here.
  It is no surprise that the costs are going up because of a lack of 
transparency in the system, no surprise at all. We have got to have 
more transparency, particularly in the pricing of generics if we are 
going to be able to create a stable and an affordable healthcare 
system.
  Now, you heard mentioned here earlier, DIR fees. DIR, direct and 
indirect remuneration, and you heard mentioned clawbacks. Now, let me 
try to articulate this the best I can and what happens here with these 
DIR fees, which is something that has come up in the past probably 
year, maybe year and half or 2 years.
  But what this is is, I mentioned earlier that, when the community 
pharmacy fills the preparation, we adjudicate the claim, that our 
computer calls their computer, the insurance computer, and it tells us 
how much they are going to pay. Okay. We are okay with that. We 
understand what we are going to get paid.
  But yet, with DIR fees, months later, the insurance company comes 
back and says, oh, we told you we were going to pay you $2.50. No, we 
have got to take back that $2.50. We are not going to be able to pay 
you that.
  Folks, obviously, that is not a sustainable business model. Nobody 
can stay in business that way. Yet that is the way DIR fees are being 
imposed now.
  Thank goodness, just last week, Congressman Morgan Griffith from 
Virginia, our colleague, introduced a bill that addresses Medicare part 
D prescription drug transparency and DIR fees. I thank Congressman 
Griffith for that.
  Again, keep in mind, folks, we are not talking about, oh, we have got 
to make community pharmacies profitable. All community pharmacies want 
to do is to compete. We just want to have the opportunity to compete on 
a fair, level playing field. That is all we are asking. We are not 
asking for any favoritism at all. Yet, when you have got an insurance 
company that owns the pharmacy, that is obviously a conflict of 
interest. Who cannot see that?
  Again, Congressman Griffith has introduced this bill, and it is a 
great bill. These DIR fees, a big unknown for pharmacists, as I 
mentioned. They can sometimes total up to thousands of dollars per 
month, and they can significantly complicate what your net 
reimbursement is going to be to cover your cost.
  In fact, in a recent survey, nearly 67 percent, almost two-thirds of 
community pharmacists, have indicated they don't receive any 
information about when those fees will be collected or how large they 
will be--two-thirds, two-thirds of the pharmacies here.
  And folks, I was so happy to see Representative Loebsack. He pointed 
out that he was the only Democrat here tonight, but I can assure you 
that there are other Democrats, because this is a bipartisan issue.
  Listen, when you go to get a prescription filled in a community 
pharmacy, they don't ask you if you are a Republican or a Democrat. 
They could care less. All they know is you are a patient, and we need 
to take care of that patient, and that is what we are trying to do.
  There is another bill that I want to touch on here. It is a very 
important bill. It is one that has been introduced by another good 
friend of pharmacy, Representative Brett Guthrie from Kentucky. It is 
called the Pharmacy and Medically Underserved Areas Enhancement Act, 
and this is really the pharmacy provider act.
  As I mentioned earlier, the pharmacists who are graduating today are 
so clinically superior to when I graduated. And Congressman Scott, I 
believe, mentioned earlier about the things that pharmacists are doing 
now: flu shots, immunizations, all of those things that pharmacists are 
able to do.
  Pharmacists are the most accessible healthcare professionals out 
there. We in America, if we are ever going to get our healthcare costs 
under control, we have to take advantage of that. We have to take 
advantage of having that expertise right there before us and having it 
so accessible.
  Representative Guthrie's bill, the pharmacy provider status bill, 
will give us the opportunity to reimburse pharmacists for those 
clinical services that they are capable of and that they are currently 
providing. This is something that needs to be done under Medicare part 
D.
  I mentioned Congressman Griffith and what he has done, and it really 
has been a blessing, then Congressman Brett Guthrie and what he has 
done, and Congressman Collins and what he has done. All of these things 
are very, very important.
  I want to mention one other thing, and that is something that has 
come out of the Energy and Commerce Committee this year, and that is 
the 21st Century Cures. 21st Century Cures is a great piece of 
legislation. That and the opioid bill that we passed earlier this year, 
I think, are two of the bills that I am most proud of since I have been 
a Member of this body; and part of that has to do with the fact that 
they are

[[Page 12591]]

healthcare bills and I am a healthcare professional.
  But 21st Century Cures is a great piece of legislation. It has been 
passed under the leadership of, as I say, Chairman Fred Upton and the 
Energy and Commerce Committee. It has been critical in advancing 
research. It addresses so many different things.
  It increases funding for the National Institutes of Health. It 
streamlines the process of the FDA and how they approve medications. It 
offers incentives to companies to come up with new innovations with new 
medications.
  Right now we know of over 10,000 diseases that affect humankind, yet 
only 500 of them can be treated. 21st Century Cures addresses this. It 
is a great piece of legislation, and I would be remiss if I did not 
mention that.
  Again, I want to thank Congressman Collins, and I want to thank all 
my colleagues who have spoken here tonight on a very, very important 
subject.
  Again, folks, all we are saying is let us compete. I have had so many 
patients who have been, their parents, their grandparents, treated at 
our pharmacy; yet, because their insurance plan changed, they literally 
left our pharmacy in tears and had to go down the street and have a 
prescription filled somewhere else. That is not American. It is not 
right.
  Again, I want to thank Congressman Collins for giving me this 
opportunity to speak on this, obviously something that I have dealt 
with all my life, my professional life. I am very proud of our 
profession. I am very proud of community pharmacy. I am very proud of 
the patient care that the community pharmacist and all pharmacists 
provide to the patients.
  So I thank the gentleman for doing this and thank him for giving me 
the opportunity.
  Mr. COLLINS of Georgia. I want to thank the gentleman for being a 
part and providing an insight that is--as I have said, for those of us 
who see this and call unfair unfair, and we are learning about it every 
day, you have lived it, and I think providing those insights is 
valuable.
  The more we continue down this path, it just--and again, I spoke 
about it. I am on the Rules Committee as well. I talked about it in the 
Rules Committee, and it was amazing when I heard the other members. 
Some were on Energy and Commerce, some were on others, and they finally 
said, that deserves a hearing. MAC transparency deserves a hearing. 
Griffith's bill deserves a hearing. Guthrie's bill deserves a hearing.
  These are things that actually save money, except for the coercive, 
twist-arm tactics of PBMs who just think that 83 percent of the market 
is not enough, 83 percent, roughly, of the market is not enough, that 
they get on people about mail order. They want you to turn--and your 
insight on how they actually know. That wall, that is the flimsiest 
wall I have ever seen. Maybe they will start building it better. I 
don't know. In north Georgia, we built them a little harder than that. 
But I appreciate that.
  I want to go into something tonight, and it is something that we have 
talked about. It just explains how this works, because maybe some 
aren't as familiar; they haven't studied this and had a great staff. I 
have actually had a great staff that have put together--you know, Bob's 
here tonight. I have got a staff member who is still with me in spirit, 
but she is not with us. Jennifer has been working on this for a long 
time.
  But I also had Daniel Ashworth. Daniel is an intern, a pharmacist 
intern who helped us out a lot and helped prepare this. I want to show 
you this. I showed you this at the beginning, and it is sort of--the 
PBMs are at the middle of the world here, if you will.
  So let's just talk about this. Let's just start off with where it 
should start, and that is with the patient. The patient makes 
medication decisions, or he gets it from the doctor. And they are 
typically okay if you go this way, their employer. A lot of times the 
employee, their health benefit plan, that is where they get that.
  So as we start here with the employers, the employers turn to PBMs or 
the insurance companies for plan decisions. So they turn to them and 
say here is how the plan is going to work. Here is how the plan 
operates. They expect the PBM to look after their best interest and to 
help save them money. That was the whole setup in the beginning, until 
they began to vertically integrate, to take on and become the main 
player in the market.
  So what happens here is they make a plan decision to entrust the PBM 
to do that, and the PBMs, in turn, are supposed to give back the 
savings in this. We have already seen tonight how TRICARE has already 
saved $1.3 billion. This was their own internal study. We have also 
seen others where the fraud and abuse are not finding these savings.
  So again, let's just continue on.
  Pharmaceutical companies have an interesting relationship as well 
because, through rebates that they give to the PBMs or to incentivize, 
if you will, the use of drugs, their brand names, their ones under 
patent--which is very valuable. You are not going to find a stronger 
proponent of patent and copyright content in this Congress than me. 
What they are doing here is they are saying, okay, we are going to give 
rebates back so you can purchase, and we are going to have brand 
preference so that you will encourage this brand over this generic or, 
frankly, this generic over this brand. And that is okay. We understand 
that.
  This rebate is supposed to actually go into the savings part, but 
there is no transparency here. We don't know where it is going. And you 
are not getting the savings back over here where the rebates could.
  And then we get to, really, the one that is interesting, and the 
pharmaceutical companies, through the pharmacy, and then back to 
patient care. This is where it gets interesting with the PBMs and their 
interesting relationships with the independent community pharmacies.
  Predatory pricing, such as we are addressing in the MAC transparency 
list, where the numbers change, they are not sure. We get into the DIR 
fees. We get into all this stuff that has now become, instead of, for 
the PBM, the P in patient, the P actually should be--and I am not going 
to write on this beautiful chart, but I might as well just put 
``profit'' because, as I have already discussed earlier tonight, the 
audits aren't about patient safety.
  As Representative Carter said, this is not about giving independent 
pharmacies or community pharmacies a leg up.

                              {time}  2115

  They don't want to be guaranteed a profit. They just want to be 
guaranteed to be able to open their doors and not be intimidated, 
coerced, or backed down by threats from PBMs that are much larger than 
them that basically say: we will put you out of business.
  Madam Speaker, that is what they do.
  They are supposed to have random audits. One of my pharmacists 
started laughing when we talked about random audits. They had the same 
audit about a year earlier. In other words, they are on a cycle. They 
just come back around the same time. These aren't random. They are not 
there for safety. They are there for profit.
  It is frustrating. I have never seen anything else like this. It is 
the most amazing thing I have ever seen in which a business model that 
we have actually condoned--especially with the taxpayer money side--
says that you can extort from pharmacies whatever you want. We will 
take back fees. We will put you on a metrics like Humana did. We will 
put you on a metrics that will give you the possibility of making more, 
but then inherently rig it against the small pharmacies. That is a 
problem.
  They can't answer the question. If they had, they would have said it 
a long time ago. They just hope I go away and quit talking about this. 
But there are Members every time we talk, some couldn't come tonight, 
and every time we come down here and we shine light on this very dark 
subject, more Members come along and say: that doesn't sound right.
  I know you have had those conversations, Representative Carter. I 
have

[[Page 12592]]

had those conversations. There are Members all over this Chamber that 
have experienced this in their own lives.
  So I come to you tonight just saying, look, we put this here, and we 
look at the interaction. I am going to say, this is the most important 
part right here. It is about the patient. It is about the patient. We 
want to fix this. Let's look at how our money is spent. We want to fix 
this. Let's look at being able to come back weeks, months later. Let's 
talk about what the problems are here, but never forget the patient. It 
shouldn't be hard for them. Pharmacy benefit manager, the first letter 
is P. Let's just change it from profit to patient. Let's change it from 
being a facilitator to help pharmacies and help employers to market 
drugs to help the patient. Studies after studies show that it doesn't 
work.
  Madam Speaker, we could talk for hours, but this is something we are 
going to continue to fight on. I appreciate the time we have had 
tonight, and this is not the end of this fight.
  Madam Speaker, I yield back the balance of my time.

                          ____________________