[Congressional Record (Bound Edition), Volume 163 (2017), Part 8]
[House]
[Pages 10997-11003]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          COMMUNITY PHARMACIES

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2017, 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, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks.
  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, tonight, as we come before the 
body, we have come back on a topic we have been here before on. It is 
really the hidden enemy, I guess if you would, of people and trying to 
get a drug pricing system, something where their community pharmacist, 
the independent pharmacist, it is that middle man called the PBM, the 
pharmacy benefit manager, who simply snuck in many years ago.

                              {time}  2015

  It originally started as a good idea so that you could collaborate, 
you could get better drug pricing, you could get it to the consumer 
through rebates and through concessions. And as in all things, I guess, 
good ideas and greed just get in the way sometimes.
  We are at a point where this is an issue that I want to continue to 
highlight. We are going to do so in several ways. We are going to talk 
about some issues. I spoke with colleagues on the floor before about 
the really terrible actions of many in the PBM community, especially 
the largest ones that control over 80 percent of the market. There are 
only three of those that really control almost the entire marketplace 
of this and control plans that folks would understand very quickly. 
They control where you go, how much you pay, the formularies. It is 
down to that kind of a problem.
  Last year, when the world began to wake up to these issues of pricing 
and all of this came to light, they began to question why these drugs 
were costing so much, such as the EpiPen. Well, what they began to find 
out was that these were problematic issues. But if you wanted to really 
look at the baseline, you had to look at the pharmacy benefit managers, 
and you had to understand what they were doing that was causing a great 
deal of problems.
  We also have to go back to the basics. Community and independent 
pharmacists fill a critical niche in the healthcare system, serving the 
primary healthcare providers for over 62 million Americans. Community 
pharmacists are some of the most easily accessible health 
professionals, particularly in our rural areas.
  Mr. Speaker, this is an area that I really have talked about before. 
We talk about the healthcare chain being a complete chain, and it is 
not just the doctors and the hospitals; it is the pharmacist who is 
typically the face of healthcare for those after they have gone to 
their doctors or come out from the hospital to get the medicine that 
will continue to keep them healthy.
  You see, community pharmacists dispense roughly 40 percent of 
prescriptions nationwide, and a higher percentage in rural areas, such 
as mine. These community pharmacists regularly interact with their 
patients outside the pharmacy. They go to church with them. They go to 
shop with them at the local grocery store. The pharmacies are the 
sponsors of kids' Little League teams. They are the ones who have the 
closest personal relationships to the healthcare chain, and they are a 
trusted source of medical care and advice.
  Pharmacists are also able to better treat patients' illnesses with 
their regular interactions, identifying potential risk factors early 
on. For example, independent community pharmacists play a key role in 
ensuring a patient properly uses their medication. In fact, 83 percent 
of community pharmacists perform the critical patient-care role of 
providing medication adherent services. Patients' failure to properly 
take their medication costs the healthcare system almost $3 billion and 
contributes to 125,000 deaths annually.
  Face-to-face counseling by a trusted pharmacist has proven to be the 
most effective method for ensuring patients take their medications, 
saving thousands of lives and billions of dollars annually.
  Mr. Speaker, independent and community pharmacists provide multiple 
and valuable services, and we can talk about these services and the 
importance of a community pharmacist. I would be remiss if I did not 
mention the recent and tragic passing of someone known well in the 
pharmacists' community for his contributions there.
  While I did not know John Carson personally, his death had 
reverberations throughout the pharmacists' community. Mr. Carson was 
from San Antonio, Texas, and owned and ran his business there, Oakdell 
Pharmacy, for almost 50 years. He and his wife were tragically killed 
in a car accident on July 7, but the legacy Mr. Carson left behind as a 
father, a pharmacist, and former president of both the Texas Pharmacy 
Association and the National Community Pharmacists Association will 
live on. Tonight we mourn his passing but celebrate his achievements.
  I could mention individual pharmacists and their work on behalf of 
their patients for the rest of the evening, and I could have probably 
every Member of this body do the same. Instead, I will provide some 
information that shows the great impact on services the individuals 
have had.
  Sixty-five percent of community pharmacists offer home or work 
delivery; 68 percent of community pharmacists offer immunizations; 83 
percent provide medication therapy and management services; and 67 
percent of community pharmacists provide monetary support to five or 
more community organizations. These are the guys you see sponsoring the 
Little League teams, the chili cook-offs, and that are true 
participants in our neighborhoods and towns.
  Unfortunately, the community pharmacists are in jeopardy across the 
country, in part, due to anticompetitive behavior and the lack of 
transparency surrounding practices of the pharmacy benefit managers. 
They have taken our community pharmacist, and they have abused their 
trust. Pharmacy benefit managers, especially in the system that we have 
today, are trying, I believe personally, to get rid of our community 
independent pharmacists because they have their own chain, their own 
distribution, and they own the supply chain. When they do, they want to 
take everything else out, and we have talked about that on many 
occasions here.
  So as we continue tonight, we are going to talk about these issues, 
as we go from pharmacists and what they have done well, some new issues 
that have come to light, some lawsuits, also some audits that have come 
out that show the real problem that we are seeing with this community, 
and also that

[[Page 10998]]

they are having, but also just being run out of business.
  Imagine, Mr. Speaker, if you were just trying to get up every day and 
run your own business, and you had a giant conglomerate tell you and 
tell your customers that they can't come see you anymore, not give you 
a reason. And if they are mistaken, they make you correct their 
mistake. I don't know how it operates in the rest of the world, but 
that isn't the way a business is supposed to operate.
  At this point in the evening, I have several of my friends from 
Georgia who are here to talk about these issues. First off is my friend 
from south Georgia; another one, who has been with me on many of these 
occasions, a Member who has seen this up close and personal, to talk 
about the issues that we have tonight.
  Mr. Speaker, I yield to the gentleman from Georgia (Mr. Austin 
Scott), someone we have been working with on the Armed Services 
Committee on a lot of things that are going on.
  Mr. AUSTIN SCOTT of Georgia. Mr. Speaker, I rise today in support of 
our Nation's community pharmacies which play a critical role in our 
healthcare system.
  Many of these independent businesses operate in underserved or rural 
areas--like many of the counties in Georgia's Eighth Congressional 
District, which I represent--where access to carriers is already an 
issue and would be worse if community pharmacies did not exist.
  In areas where a doctor can be many miles away, local pharmacists 
deliver flu shots, give advice on over-the-counter drugs, and help with 
those late-night drugstore runs for a sick child. Many people in our 
rural communities see their pharmacists much more often than their 
doctors. There is a very personal relationship between the pharmacist, 
the patient, and the physician.
  As pillars in their community, they are also the businesses that 
contribute greatly to local economies. It is crucial that these 
pharmacies have an equitable playing field against large-scale 
competitors and middleman pharmacy benefit managers when trying to run 
a successful business in a challenging and complex environment.
  I want to reiterate, Mr. Speaker, all they ask for is an equitable 
playing field. No advantages, just equality. Where I am from, local 
pharmacists are often a fixture in their communities. These pharmacists 
have known most of their customers all of their lives. They instill a 
level of trust that is unparalleled.
  I frequently stop in at local community pharmacies when I am back 
home in the district and never fail to appreciate the unique value they 
add to their customers' lives. Unfortunately, on some of these visits, 
I am also troubled to learn how community pharmacies are finding it 
extremely difficult to serve the people who have depended on them for 
years and to compete with some of the larger entities in the healthcare 
marketplace.
  Take, for example, the increased prevalence of preferred networks in 
Medicare part D plans. Currently, many Medicaid beneficiaries are told 
by pharmacy benefit managers, or PBMs, which pharmacy to use based on 
exclusionary arrangements between those PBMs and, for the most part, 
big-box pharmacies. What most people don't know is that, in fact, in 
several instances, these big-box pharmacies actually own the PBMs that 
are creating these preferred networks.
  Patients must pay higher copays just because the pharmacy they want 
to use is excluded by the PBM, who again, as I said, in many cases, 
actually own the larger pharmacy that they force you to do business 
with. The majority of the time, the hometown pharmacy is never given 
the opportunity to participate in the network in the first place.
  Another issue I often hear about from community pharmacies is the 
burdensome DIR fees. Most Americans probably assume that it is a pretty 
simple transaction when they purchase medication from their local 
pharmacy. They go in, they pay a copay, and that is the end of it.
  But for the pharmacy, the transaction is anything but clear and 
simple. Pharmacy benefit managers use so-called DIR fees to claw back 
money from pharmacies on the individual claims long after the claim is 
thought to have been resolved. That means that a pharmacy often doesn't 
know the final reimbursement amount they will receive for a claim for 
weeks, or even months.
  Anyone who runs a pharmacy, or any other small business for that 
matter, knows you can't operate when you don't know what your 
reimbursements are. When competition is stifled and these small 
businesses suffer, so do hardworking Americans when they have had their 
choice to use a community pharmacy instead of a big-box business taken 
away from them.
  Another issue I frequently hear about is the lack of transparency in 
generic drug reimbursements to pharmacies. Generic prescription drugs 
account for approximately 80 percent of drugs dispensed. The 
reimbursement system for these medications is largely unregulated and a 
complete mystery to all of us. Now, if it is unregulated with 
transparency, that is fine. But it is unregulated without any 
transparency.
  Pharmacists are often reimbursed for generics by what is referred to 
as the maximum allowable cost list created by the pharmacy benefit 
managers. But the methodologies used to create these lists are not 
disclosed, nor are the lists updated on a regular basis, which 
frequently results in pharmacists being reimbursed below the actual 
acquisition cost for various medications.
  In recent years, these extra costs that affect prescription drug 
prices in community pharmacies have fallen on consumers. Take 
doxycycline, for example. Doxycycline is a drug that is used to treat a 
number of bacterial infections. As a generic antibiotic, it has been 
around for decades. I want to repeat: it is a generic that has been 
around for decades. In 2012, 30 capsules of doxycycline cost 
approximately $15. In 2017, the same dosage cost $115. That is a price 
increase of 667 percent.
  I want to give you a real-world example of the impact this has on 
low-income patients in the world. I have a wonderful OB-GYN in my area, 
and he told me that prior to the price increase, he would simply keep 
doxycycline in his office, and when he had a patient that needed it, he 
could simply give the patient--if it was a low-income patient--the 
drugs instead of having them go to the pharmacy to pick them up. But 
with a 667 percent price increase, they could no longer afford to 
simply give the patients the medication that they need.
  Nitroglycerin tablets are another example. Nitroglycerin has been 
used to treat chest pain and stop a heart attack and has seen similar 
price hikes in the past few years. Again, it is a generic drug that has 
been around for decades--no excuse in the price increases other than 
flat out greed.
  A drug that is even more common that has been affected by the lack of 
transparency in the drug market is insulin. As you may know, millions 
of Americans with diabetes rely on insulin. They have to have it, or 
they will simply die. According to the American Diabetes Association, 
the price of insulin in America has nearly tripled over the past 15 
years, making the drug nearly unaffordable for many diabetic patients.
  The dramatic price hikes of insulin is ironic since, in the early 
1920s, Frederick Banting, one of the scientists who helped to first 
develop insulin, sold the patent for the drug for $3 because their goal 
was to make the drug affordable and easy to access for everybody in the 
world.
  Now, nearly 100 years later, one vial of Humalog can cost nearly $400 
in the United States, where it costs a fraction of that in other 
countries around the world. In Canada and Mexico, the same dosage of 
Humalog costs less than half, or sometimes even a quarter of what it 
costs in the United States.
  I understand that there is a tremendous cost in developing lifesaving 
treatments, new drugs, and the next development that is going to save a 
cancer patient, but these are generic drugs that have been around for 
decades. These dramatic price increases, the international price 
disparities, they are occurring, again, on drugs

[[Page 10999]]

that have been around for decades because of this pricing scam put in 
place by the pharmacy benefit managers.
  In the coming months, I look forward to continuing to work with my 
colleagues to address the lack of transparency in the pharmaceutical 
industry, giving community pharmacies an equitable playing field to 
compete, which gives hardworking Americans the choice of affordable 
prescription drugs and which pharmacy they choose to purchase those 
drugs from.
  Mr. Speaker, I want to thank the gentleman, Mr. Collins, for hosting 
this Special Order today.
  Mr. COLLINS of Georgia. Mr. Speaker, I thank my friend. We have been 
talking about this, and I think what is amazing is, the more we have 
these, and the more we talk about community pharmacists and the issues 
that we find, people are starting to understand the real problem that 
exists here.
  Mr. Speaker, more than 250,000 individuals employed either on a full-
time or part-time basis by community pharmacies, these people's 
livelihoods are facing consequential threats due to the often 
anticompetitive behavior of pharmacy benefit managers, or PBMs.
  Many people may have never heard of a PBM. Well, let's give them a 
definition tonight. PBMs are middlemen who administer prescription drug 
plans. In fact, three primary middlemen control 78--almost 80 percent--
of the market and control the pharmacy benefits of over 253 million 
Americans.

                              {time}  2030

  PBMs process prescriptions for groups that pay for drugs and control 
drug formulation to determine what drugs are covered by specific plans.
  The three major PBMs--Express Scripts, CVS Caremark Health, and 
OptumRx--produce no tangible product. Let me repeat that. These three 
produce no tangible product. Yet they have a major impact on the way 
you and I access medication, on small business pharmacies, and even 
other small business PBMs.
  If you don't believe me, just the other day, I was watching a 
business show, and there was a PBM--there was a transparent PBM who 
talked through this whole issue of fees, rebates, and everything else. 
They said: We show everything.
  Well, I challenge the three big ones to do it. They don't want to 
because--if you started looking at actually what they did, they are 
what I have said many times--they are monopolistic terrorists. That is 
all they are in this market.
  Mr. Speaker, as an example of the major market power that PBMs have, 
I would like to point you to Express Scripts' annual average revenue. 
That one company has average revenue of $101 billion. Now, Mr. Speaker, 
I am a conservative, free-market business person. I love to see a 
business actually make money. But you don't do it the way they are 
doing it. I am not decrying their profit. However, I am calling into 
question the business model of raking in massive profits on the backs 
of patients and small business pharmacists. You don't do it that way.
  I brought this up on many occasions and only get excuses and 
obfuscations and everything from the PBMs going online and telling 
about how great they are but never addressing the real issue. The 
problem is relegated to the wayside far too long and is coming into 
sharp focus. In fact, Anthem, an insurer, is currently suing to end its 
contract with Express Scripts. It claims Express Scripts failed to 
renegotiate lower drug prices and withheld billions in savings. This 
lawsuit and stories surrounding it have called into sharper focus PBM 
tactics that community pharmacists have been grappling with for years. 
In just a few moments, we are going to hear firsthand about how that 
has actually been going on.
  Through a variety of practices, PBMs make life difficult and 
undermine competition for our neighborhood pharmacists and the patients 
that they serve. For example, PBMs have maximum allowable costs--MAC 
lists--that determine the maximum amount a pharmacist will be 
reimbursed for certain generic drugs. However, PBMs' reimbursement 
price determinations are hidden, and there is no transparency in the 
process.
  PBMs commonly manipulate drug prices using what is called spread 
pricing. I would encourage, Mr. Speaker, those who listen to this and 
would want to be a part to look this up. Everything we are talking 
about is actual fact. PBMs charge employers a higher price for a drug 
than necessary and reimburse pharmacies at the MAC level, which is 
typically lower. Spread pricing allows PBMs to skim money from the 
difference between the high rate they charge for a prescription and the 
low rate they reimburse pharmacies. Spread pricing is artificially 
raising the acquisition cost of pharmacy drugs by overcharging at the 
expense of retail pharmacists, consumers, and health plans.
  You see, when we understand this, people say: Why is this a problem? 
Why are we talking about it?
  This lack of transparency is also a problem when PBMs administer 
taxpayer-funded programs like Medicare part D, TRICARE, or the Federal 
Employees Health Benefits Program. Currently, we can't ensure that the 
savings generated by cost-saving rebates received by the PBMs are being 
passed along to government programs. PBMs can receive rebates to 
acquire prescription drugs at lower-than-advertised costs, and PBMs can 
then charge the government the full cost for the drug even if a PBM has 
a significant discount. This deceptive practice increases the cost of 
prescription drugs for beneficiaries of Federal Government prescription 
drug programs.
  Let's break that down, Mr. Speaker. When we talk about Federal drug 
programs, these taxpayer-funded programs, we are talking about my 
taxes, your taxes, and everybody else's taxes. That is why this is 
important and needs to be addressed. This is what is the problem.
  This lack of transparency is unacceptable and jeopardizes the quality 
of care for millions of patients across the United States. Northeast 
Georgia has a vibrant pharmacy community, but its pharmacies are being 
threatened by the unfair practices of the PBM. The fact is--and I have 
made mention of this before--several pharmacists tell me that if 
something doesn't change, we are going to see more and more of those 
pharmacies disappear within the next few years.
  I introduced the Prescription Drug Price Transparency Act to help 
address this situation. My legislation preserves pharmacy access for 
patients by allowing pharmacists to know the sources PBMs are using to 
set reimbursement rates for community pharmacists.
  PBMs' prices are often based on incentives for manufacturers not 
disclosed for long periods of time. Oversights of PBMs ensure taxpayers 
are not footing the bill for generic prescriptions by providing 
transparency into how drug acquisition costs are determined. The 
Prescription Drug Price Transparency Act also prevents PBMs from 
forcing their customers to fill or purchase prescriptions from 
pharmacies owned and controlled by the same PBM.
  Let me go back over that real quickly. The PBMs, the pharmacy benefit 
managers, are allowed to force customers to fill or purchase 
prescriptions from pharmacies they own and control. There is no 
transparency here. They are simply controlling a system and running the 
market out. This means patients can keep the pharmacists they like 
rather than being improperly incentivized or coerced to use a PBM-owned 
pharmacy.
  Finally, it would require PBMs to update their MAC pricing list every 
7 days, codifying current CMS rules for Medicare part D and expanding 
it to TRICARE and FEHP. This legislation is vitally important to 
improving fairness and transparency in drug pricing and reimbursements 
to independent and community pharmacists.
  I will tell you this: I've heard story after story, and we will 
continue these tonight. The community pharmacists may be muzzled by 
PBMs, those that are still. There may be fear of retaliations. But I 
won't let those concerns go unnoticed. We are going to continue to take 
this fight to the floor so there will be a voice for transparency and 
fairness for community pharmacists, for

[[Page 11000]]

patients, and for taxpayers. Because if they think they can pull a fast 
one on the Federal Government at the cost of taxpayers, then they have 
got another thing coming. They may go in and intimidate and strong-arm 
our community and independent pharmacists. They may threaten them to 
keep quiet. They may tell them not to go to their elected officials or 
have a voice to say that we think that there is a better way, or just 
to be able to compete on a fairness level without anything else except 
just let us compete. The PBMs may try to strong-arm them and to silence 
them into submission, but they are not going to be able to silence me. 
They can't audit me, and they can't do that to the American pharmacist 
who is simply trying to be a part of this system.
  There is nobody that can understand that better than my friend from 
south Georgia. He is a pharmacist by training. He has left the 
pharmacies behind so that he can come up here and help us continue this 
fight for patient care and patient health all across this country. He 
is a champion in every sense of the word of this industry because, as 
the old saying is, he is one. He comes tonight to talk further and 
provide insight into this Congress.
  Mr. Speaker, I yield to the gentleman from Georgia (Mr. Carter). It 
is good to have him back in the fight tonight.
  Mr. CARTER of Georgia. Mr. Speaker, I thank the gentleman for hosting 
this tonight and for his advocacy on the part of the community 
pharmacy, but, more importantly, on the part of the patients, because 
that is what this is about. This is about patients, about patient care, 
about escalating prescription costs. That is what we are talking about 
here, about unfair trade practices.
  This is America. Like my colleague mentioned earlier, I am not 
opposed to anybody making money. That is great. More power to them. But 
where there is a problem with transparency, there is a problem with 
PBMs. There is a problem with escalating drug prices.
  I want to mention that I have been a practicing pharmacist, as 
Representative Collins mentioned, for over 30 years. I have worked with 
my neighbors and my friends to really provide a helpful voice for their 
needs. Beneficiaries are facing increased costs in prescription drugs 
without much of a basis notification as to why these costs are 
skyrocketing.
  My friend, Representative Collins; my friend, Representative Scott; 
others--even on the other side of the aisle--Representative Peter 
Welch, Representative Elijah Cummings, and Representative Dave 
Loebsack, this is a nonpartisan issue. Everybody has to have 
prescription medications. Whether you are a Democrat, whether you are a 
Republican, whether you are an Independent, it doesn't matter. Everyone 
is the victim of escalating prescription drug costs. The problem is we 
have got to understand where that is coming from.
  I thank Representative Collins for his legislation, the Prescription 
Drug Price Transparency Act, to bring about greater transparency in the 
role that pharmacy benefit managers, the PBMs, have in the drug pricing 
structure.
  Many people don't understand the structure or where the additional 
fees are originating from, which is often a direct result of the lack 
of transparency between the manufacturer and the dispenser. Let me 
repeat that. Many people don't understand the structure. I will be 
quite honest with you. I have been working with this for over 30 years, 
and I still don't understand it. In fact, I have got numerous examples 
of where CEOs have said they don't understand it. It is intentionally--
intentionally--complicated so that no one understands it.
  I had the opportunity last year as a member of the Oversight and 
Government Reform Committee. We had the CEO of Mylan pharmaceuticals. 
Mylan, of course, is the manufacturer of EpiPen. It went up in price. 
The EpiPen costs $600 for a dual pack.
  I said: Okay. When it leaves you, the manufacturer, you are the 
beginning. You are the manufacturer. How much have you got in costs?
  She responded: I have got $100, maybe $150 in costs.
  I said: Okay. You are the beginning. I am the end. I am the 
dispensing pharmacist. When it gets to me, it is $600--$150 at the 
beginning, $600 at the end. What happened in between? What happened in 
between?
  Now, a lot of times it is lost on some of my colleagues here and on 
the average American because all they are concerned about what the 
copay is, if the copay is $15 or if the copay is zero. Okay.
  But keep in mind that somebody somewhere is still paying that $600. 
In a lot of cases, it is the Federal Government through Medicare part D 
or State Medicaid plans. Somebody somewhere is paying it.
  But when you have the CEO of a manufacturer, when I asked her a 
direct question, ``What happens in between that $150 and that $600?'' 
and she says, ``I don't know,'' and I am the pharmacist and I say, ``I 
don't know either,'' somebody somewhere has to know. I can tell you it 
is the middle man.
  The most effective, the most immediate impact that we can have on 
prescription drug pricing is to pass this bill that Representative 
Collins has and to have transparency in drug pricing. Sunshine is the 
greatest disinfectant of all. If we have sunshine, we will have lower 
drug prices if we have transparency.
  I want to give a couple of other examples. My colleague, 
Representative Collins, mentioned about three PBMs controlling 80 
percent of the market. That is not competition when you have got three 
companies that control 80 percent of a market.
  Did you know that Express Scripts, the number one PBM in the country, 
had gross revenues almost equal to McDonald's, Ford Motor Company, and 
Pfizer pharmaceuticals added together? Added together, this one PBM.
  Now, again, I am not opposed to anyone making money. More power to 
them. But how are they making it? Nobody knows.
  Why don't we have transparency?
  Everybody wants lower drug prices, and we have all got to do a better 
job. Pharmaceutical manufacturers have got to do a better job. 
Pharmacists have got to do a better job. GPOs have got to do a better 
job. But until we have transparency, we are never going to be able to 
get it under control.
  I want to give a couple other examples. The manufacturer of the 
hepatitis C drug has had so much criticism about the price, and it is 
too expensive. Gilead pharmaceuticals makes SOVALDI. SOVALDI accused 
Express Scripts of not warning them to go down on the price of SOVALDI. 
Gilead said: You never wanted us to go down on that price because you 
are getting a percentage rebate. The higher the cost of that 
medication, the higher rebate you are getting.
  My colleague mentioned about the lawsuit that Anthem has against 
Express Scripts. Anthem is not going to renew their contract with 
Express Scripts because they are suing them for billions--that is 
billions with a ``B''--of dollars, saying: You owe us billions of 
dollars.
  These are real-life examples of what I am talking about. That is why 
we need to pass the Prescription Drug Price Transparency Act that 
Representative Collins is pushing so hard, and has been, and we thank 
him for that.
  I want to also talk about some other bills here continuing in the 
theme of transparency. We have an opportunity to address the issue of 
retroactive DIR fees and the impact they have on drug pricing. My 
colleague, Representative Scott, mentioned DIR fees and clawbacks. DIR 
fees are having a negative impact on the ability to provide accurate 
and comprehensive services to the beneficiary.
  Those fees are a large unknown for pharmacists and don't provide 
clarity on drug costs to the patient or whether they will be able to 
accurately meet the needs of their patients. Ultimately, the patient 
ends up being penalized, and that is an issue that must be addressed. 
Ultimately, what this boils down to is the patient--the patient, Mr. 
Speaker, the patient. Let's stay focused on what we are supposed to be 
focused on, and that is the patient.

[[Page 11001]]

  We talk about drug costs and we talk about healthcare. We want 
accessibility, we want affordability, and we want patient-centered 
healthcare.

                              {time}  2045

  That is what we want in prescription drugs, accessibility and 
affordability. Yes, they need to come down in prices. And again, the 
most effective, the immediate impact that we can have is to have 
transparency, transparency in the middleman in what they are doing.
  That is the reason why Congressman Morgan Griffith's legislation is 
helpful in bringing about stability. Pharmacies would no longer be 
penalized for providing the same quality service they always have 
simply because PBMs have shifted cost under a lack of transparency. 
With this legislation, we can keep costs down for beneficiaries.
  Now, I want to talk about another piece of legislation that another 
good friend, Representative Brett Guthrie from Kentucky has introduced, 
H.R. 592, the Pharmacy and Medically Underserved Areas Enhancement Act, 
to address the role of pharmacists in rural communities. With this 
bill, many of the individuals who seek consultation, especially 
seniors, can contribute to receive quality input and expertise.
  There are many underserved and rural areas of the country where 
patients don't have access to a primary care provider but have access 
to a pharmacist. Pharmacists are the most accessible healthcare 
professionals that we have. That is why provider status is so 
important. That is what we call this, the Pharmacy and Medically 
Underserved Areas Enhancement Act.
  Under this legislation, pharmacists can continue to service those 
rural and underserved areas and fill a role that is vital to the 
healthcare of these residents in these areas.
  I also want to compliment and commend Representative Griffith again 
on his efforts to keep patients' access to compounded medications 
intact. In June, he introduced a Preserving Patient Access to 
Compounded Medications Act of 2017. This bill will provide further 
guidance for the FDA, medical providers, patients, and compounding 
pharmacies about what constitutes pharmacy compounding and what is 
regarded as drug manufacturing. This legislation will provide a crucial 
balance between public safety and patients' access to the medications 
they need.
  Lastly, the leadership of the Energy and Commerce Committee has been 
critical in advancing legislation both in the 114th and 115th Congress 
that will lead to research and development of new drugs and treatments. 
I commend my colleagues on their hard work and thank my good friends 
for the opportunity to speak tonight on this issue that is very 
important to me.
  Mr. Speaker, the President has identified escalating prescription 
drug cost as being one of his biggest priorities. He has said himself: 
If you are on the other side of research and development, you need to 
beware because we are coming after you. PBMs, you are on the other side 
of research and development, and we are coming after you.
  This is too important. It is too important to the patients who are 
trying to get these medications, who need these medications. All we are 
asking for here is transparency. All we are asking for is to shine the 
light on what is going on.
  I know they make it difficult to understand. It is a shell game. It 
is nothing more than a shell game. Again, I want to commend my 
colleague, my friend, Representative Collins, for his untiring advocacy 
on the part of community pharmacists and on the part of citizens who 
need and depend on their community pharmacists.
  Mr. COLLINS of Georgia. Mr. Speaker, I want to thank my friend. He 
has brought out so many things. And you know, Representative Carter, 
one of the things that is off the top, when we talk about Mack 
Transparency, when we talk about this list we talk about, one of things 
they come back at us, and they say: Well, it is going to increase cost. 
You know, if you do this, it increases cost.
  And it is sort of interesting because in Texas, this actually 
happened in 2013, they did their top 200 drugs, and they were somewhere 
in the neighborhood of a little over $200. And then in just a matter of 
3 years, those average prices of those 200 drugs dropped to below $100.
  We are both from Georgia when we were talking about it. That is going 
down. It is not going up. It is because they are actually having to 
show what they are doing. That is why this--don't you agree that that 
is why we are having to do what we are doing here?
  Mr. CARTER of Georgia. There is no question about it. Let me, if I 
may.
  Mr. COLLINS of Georgia. Continue.
  Mr. CARTER of Georgia. Mr. Speaker, if I might just give two 
examples. First of all, there is an example of Caterpillar. Caterpillar 
has done away with PBMs. They have done away with the third parties. 
They are doing it themselves. And you know what it has resulted in? 
Stable drug prices for the past few years.
  As opposed to the increases that most companies have seen, 
Caterpillar, when they cut out the middleman, they have had stable drug 
prices. They said: We can do this better. And they have done it better.
  Keep in mind--the second thing that I want to point out is, keep in 
mind, why were PBMs created? First of all, they were created to process 
claims, insurance claims. But what is their purpose? They will tell you 
our purpose is to keep drug prices down. Our purpose is to keep drug 
prices down.
  Mr. Speaker, how is that working out for you? They are not keeping 
drug prices down. They are keeping drug prices up. They are one of the 
reasons why drug prices are going up, one of the primary reasons.
  I can remember when I started practicing pharmacy in 1980. And I am 
proud to say that I am that old. I started practicing pharmacy in 1980. 
We used to buy directly from the drug companies. I would buy directly 
from Upjohn, from Merck Sharp & Dohme, from Squibb, from whoever. There 
was no middleman there. Now I can't even do that. I have to go through 
the PBM. I have to go through all these different layers and layers in 
order to get the medication.
  PBMs, if their purpose is to control drug prices, then what is going 
on? Because drug prices are escalating. What a tangled web we weave.
  Mr. COLLINS of Georgia. Mr. Speaker, it is that, and I think the 
interesting thing is the middleman who produces nothing on their own. 
That is the thing. They don't produce anything in this. They are 
simply--you know, I think I will just sort of describe it like I see it 
in northeast Georgia. It is like a tick on the back of a dog. They just 
simply suck profit off and do not do what you exactly just said. They 
don't do what they just said.
  I mean, Caterpillar. You brought up Caterpillar. I will bring you 
some numbers with Caterpillar. Caterpillar started moving away from 
PBMs. They suspected that they could save as much as, in a quarter, 
$150 million in drug prices being spent inefficiently.
  They went back and did their own formularies. They worked this out so 
that they are on this straight, and just--the company saved 5- to $10 
million per year in just cholesterol-lowering statins alone, one of the 
most widely prescribed medications, just in that right there.
  When you see how PBMs claim to save money, you look at the 
Caterpillar model. There are other models out there that are finally 
looking at this and saying: We can do this in a better way.
  And I appreciate your input tonight. I think that has been--you are 
just highlighting this that there are ways to do this. This is not the 
only way. And to go into State legislators, and to go into county 
offices, and to go into county governments, and the Federal Government, 
and to pull the wool saying ``we are saving money,'' while all along we 
are seeing this tangled web of DIR fees and clawback and no 
transparency.
  You know, it isn't amazing to me that they are spending so much money 
on advertising right now. It is not amazing to me that they are trying 
to spend so much money claiming what we are saying is not true. But 
they never address the point. They never

[[Page 11002]]

say this is not true. They simply say we are saving all this.
  I encourage the Energy and Commerce Committee to take these bills up, 
hold hearings on these things. They are not going to deny it, and they 
are going to find out that unfortunately what is supposed to be a help 
has been really falling backwards, and actually, you know--and really, 
even from the Federal Government, those community and independent 
pharmacists are not wanting.
  Mr. CARTER of Georgia. Mr. Speaker, if I could just mention one 
thing, and I would be remiss if I did not mention this, because the 
gentleman has just brought up an outstanding point, and that is: What 
value are they bringing to the system? What value are PBMs, are 
middlemen, bringing to the system? That is what I would ask.
  Now, look, pharmaceutical manufacturers need to do a better job. They 
need to bring their prices down. But I will cut them some slack. At 
least they are using their profits to go back into research and 
development. At least they are doing that. PBMs don't put one red cent 
into research and development, not one red cent.
  I repeat what I said earlier. I am not against anybody making money, 
but, Mr. Speaker, this is causing escalating drug prices. The lack of 
transparency is causing the problems that we are experiencing right 
now.
  The most immediate, the most effective impact that we can have on 
prescription drug prices is transparency. Sunshine is the greatest 
disinfectant out there, and we need sunshine.
  Thank you for what you are doing for the patients. Thank you for what 
you are doing for the people who are struggling to pay for their 
prescriptions. That is what this is about.
  Mr. COLLINS of Georgia. Mr. Speaker, it has always been about that. I 
have come to this well and come to this floor on many occasions to talk 
about it. And when you look at the impacts they are having on DIR fees 
and these clawback fees that are coming back after the fact and not at 
the time of when there is no really need or cause for it, according to 
the Community Oncology Alliance, pharmacists lose $58,000 per practice, 
on average, to DIR fees each year. You know, this makes it completely--
I mean, think about that.
  Mr. Speaker, if you had a business in which you had $58,000 just 
sucked away for no apparent reason, I mean, this is--we wonder why this 
is happening, and we wonder why people can't get their drugs. We wonder 
why people wonder why can't I get this drug? Why do I have to wait to 
get approval here? It is this area right here--DIR fees.
  And I do applaud my friend, Mr. Griffith from Virginia, who has 
introduced this bill, and I am a proud cosponsor with him on this.
  You know, it is amazing today to see when patients--when this happens 
in Medicare part D, the beneficiaries are going through this process, 
and really what happens, it increases the problem called the doughnut 
hole, and they are hitting that doughnut hole sooner, forcing them to 
pay out of pocket for their drugs. And when patients pass through the 
doughnut hole into catastrophic coverage, CMS takes on most of the cost 
of burden-sharing.
  Now, here is where it gets important, Mr. Speaker. When CMS picks it 
up, the cost increased from 10 billion in 2010 to 33 billion in 2015. 
You cannot tell me DIR fees are not part of that problem right there. 
You cannot tell me that what they are doing is now taking--they are 
simply reaching into your pocket, Mr. Speaker. Maybe you can feel it 
right now. You can feel that hand going into your wallet. You can feel 
that tax money being taken out and being taken away, sucked away by PBM 
through these fees and DIR fees, and they are getting into it through 
Medicare part D. And 10 billion to 33 billion increase is simply from 
2010 to 2015.
  Pharmacists are at distinct disadvantage when DIR is taken and 
collected from pharmacies after point of sale. There is a lack of 
transparency in the detail provided to pharmacists, and the retroactive 
nature of these fees creates operational and cash flow challenges for 
pharmacists.
  Think about having something that you think you have one price on, 
and they come back and say: No, you messed it up.
  We talked about so many different things. We talked about how PBMs 
can come in and audit basically their competitors. We talked about how 
they can send out letters to a pharmacy's clients and say: This 
pharmacy is no longer taking this prescription plan. And then when the 
pharmacist points it out, they say: Yeah, you are right; you still have 
the plan.
  And the pharmacists have the audacity to ask: Would you please send a 
letter to these people who you just sent a letter to and tell them you 
were mistaken? And the PBM said: No, we can't do that; you will have to 
do that on your own.
  Is this America, Mr. Speaker? Where do we operate like that? And we 
wonder why our healthcare system and these community pharmacists are 
bearing the brunt of it.
  At the end of the day, it is about people. It is about moms and dads. 
It is about kids. It is about those folks who simply want a healthcare 
system that works. And one of the most visible parts of the healthcare 
system is the community pharmacist, the one who dispenses the drug and 
asks them: How are you doing? How are the kids? Are you taking your 
medicine?
  And they will ask those questions that maybe some of us just don't 
want to ask our doctor. You know, you might just ask that pharmacist 
that question and say: Really, what does this do to me?
  That is what we need. And as long as they are being frontally 
assaulted, retroactively assaulted with DIR fees, and generally 
pummelled out of business, the PBM will continue to just drown our 
community and independent pharmacists.
  And as long as that happens, there will be myself and others in the 
well speaking the truth and pushing our committees to do something 
about this, because at the end of the day, businesses ought to operate 
properly. But when you are affecting the taxpayer dollars, when you are 
going after taxpayers, and you are doing so in a way that takes 
pharmacists out of the loop, you have threatened them, you have done 
everything else you can to them, well, the day is over, this Congress 
will continue to fight. And there are many Members who are learning 
what is going on, and it is now time I challenge this body and the 
committees of relevant jurisdiction to take this issue up because we 
are not going to stop.
  And we will be back soon, Mr. Speaker, with some more details on this 
issue and how much it can be effective. And with that, I yield back the 
balance of my time.
  Mr. DUNCAN of Tennessee. Mr. Speaker, thank you for this opportunity 
to speak, and thank you, Congressman Collins, for your leadership and 
persistence on this critical issue.
  Community pharmacies are so important to our Districts. There is 
nothing like walking into your local pharmacy, and the pharmacist knows 
you by name. He knows your medical history. He knows what you need. He 
knows you.
  As one community pharmacist described, ``People call me all hours of 
the day and night. They know where I live, and they come to my house if 
they need me.''
  These local pharmacies are in danger of disappearing across the 
Nation. Why? Because PBMs are running them out of business.
  Pharmacy Benefits Managers, or PBMs, claim to act as middlemen and 
help pharmacies and manufacturers find the best deals for their 
patients. It's a great idea.
  Despite these PBMs' promises, I have heard from more and more 
pharmacy owners in my District who say that many PBMs are in reality 
ripping them off with various unethical tricks of their trade.
  PBMs are often dictating the prices charged by manufacturers and 
pharmacists or insurance plans. PBMs are a key problem behind drug 
price inflation.
  One critical aspect of their strategy is gag orders that they impose 
on pharmacists and manufacturers in contracts, thereby silencing 
dissenters under threat of being excluded from networks or formularies 
. . . in other words, under threat of being blocked from buying and 
selling in the drug market altogether.

[[Page 11003]]

  Often, PBMs use what they call clawbacks. The outright cost of a drug 
might only be $40, but the patient might have to pay double or more 
than that price through their insurance.
  Too many times, pharmacists have to decide between two choices: 
either violate their consciences by watching often low-income patients 
pay exorbitant prices--or tell the patients to buy the drug outright, 
saving them money.
  But the second choice comes with a threat . . . because if a 
pharmacist informs her patients about how to save money, she is 
violating her contractual gag order imposed by PBMs.
  A pharmacy consultant recently interviewed by the LA Times accurately 
described PBMs like this--``The PBMs are sitting at the center of a big 
black box. They're the only ones who have knowledge of all the moving 
pieces.''
  But awareness of PBMs' deceitful practices is increasing. More and 
more pharmacists and manufacturers are speaking up and exposing PBMs.
  One endocrinologist and professor of medicine at the University of 
Washington recently said, ``It's becoming very, very common to see 
patients intentionally withholding their insulin.'' Doing so can be 
deadly, but patients are often facing $300 per vial and need two vials 
a week.
  There are three PBMs that control the market: ExpressScripts, 
OptumRx, and CVS Caremark. These three PBMs rake in over $200 billion a 
year and are responsible for 290 million Americans through their 
contracts with both private insurers and government programs like 
Medicare.
  CMS, the Centers for Medicare and Medicaid Services, is ``wising up'' 
to PBMs. In June, CMS proposed a new guideline for Medicare Part D 
PBMs. If finalized, this guidance will address PBMs' common practice of 
imposing retroactive fees.
  One of the pharmacists in my District told me these retroactive fees, 
known as DIR fees, can cost him tens of thousands of dollars months 
after the claims have been processed with no clarification, no 
explanation, no reasoning from the PBM.
  No business or even individual can plan a budget, if months later 
they may be forced to pay thousands of dollars more for something they 
thought they had already paid for.
  According to one expert and pharmacy owner in my District, he has 
seen three causes for recent increases in prescription drugs:
  (1) FDA involvement, including requiring ``modern clinical trials'' 
of old drugs that have worked for decades;
  (2) drug manufacturers' needlessly hiking the price of generic drugs;
  (3) PBMs charging ridiculous prices for drugs and pocketing the 
profits.
  According to my constituent, PBMs are the main culprit of the three.
  A number of lawsuits are being filed against PBMs, including one 
class action lawsuit. More and more people are realizing what one 
lawyer said recently: ``We describe this as basically a massive 
fraud.''
  We need to address artificially high drug prices right away. A good 
place to start is PBMs and their ``massive fraud.''
  As one small town pharmacist said, ``. . . The pharmacy benefit 
managers . . . set rates I cannot control. I can complain, but it does 
no good whatsoever. And in a town of 3,000, I cannot make it up on 
volume.''
  PBMs must be more transparent in their operations, so they can be 
held to their promises and to the laws.
  PBMs must not be able to get away any longer with conducting business 
with their unethical, at best, methods.
  In short, PBMs must be held accountable for their roles in the 
Nation's drug price crisis.

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