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Challenges Facing Independent and Community Pharmacists

Floor Speech

Location: Washington, DC

The SPEAKER pro tempore. Under the Speaker's announced policy of January 3, 2013, the Chair recognizes the gentleman from Georgia (Mr. Collins) for 30 minutes.

Mr. COLLINS of Georgia. Well, it's good to be here at the end of a day in which there's been a lot of excitement here on the floor, a lot of voting going on, a lot of debate, which is what we're up here for.

One of the things that I have committed to, as we talked about a little bit last week, is pointing out some things that may fall a little bit under the radar but actually matter a great deal to the people of not only the Ninth District, but to the people of the United States.

Up here, we can get, many times, lost in what I'll call the big picture items or the latest of what's hot, so to speak, and tonight I want to talk about our local pharmacists.

I have a little pharmacist I go to. We have several, but one of the main ones I go to is Woody's Pharmacy, Kevin Woody. And I go in there and I know that when I ask him about the drugs for myself, for my wife, my kids, he gives me answers. He helps me know why they interact, what goes on. We've got pharmacists in all kinds of settings that do that every day for folks. But our local pharmacies, and especially our community pharmacies, right now are under attack.

I'm going to be joined, hopefully, here in a little bit by the gentleman from Pennsylvania to talk about the challenges facing independent community pharmacies. You see, local pharmacists play a vital role in America's neighborhoods and communities, particularly in the more rural areas of northeast Georgia. They provide unparalleled guidance, assistance, and resources for families, including my own. I'm committed to protecting access to independent and community pharmacists and helping to level the playing field through effective and robust oversight of pharmacy benefit managers, or PBMs.

It's a tough enough task to survive in this economy, and the overregulation by the administration is only making it more difficult. I am committed to working with my colleagues, particularly the gentleman from Pennsylvania, to promote legislation that will provide consumers with greater choice of pharmacies, require fair standards for PBM pharmacies, support access to diabetes testing supplies, protect traditional pharmacy compounding, and ensure that our military families can enjoy the many benefits that community pharmacies provide.

In many cases, independent and community pharmacists have dedicated their careers to providing quality patient care. However, they've been continuously cut by unfair reimbursements, overbearing audits, and a take-it-or-leave-it approach to contracts. Over the next 30 minutes, I look forward to discussing the challenges facing independent and community pharmacists and the important role they play in the lives of many of our constituents.

Although we cannot sufficiently cover these issues in the next half hour, I hope this will be the first of many conversations on this floor about this important topic. And this is what I mean about ideas and topics that may not make the headlines, they may not bring the stories on the opening of the evening news, but they affect us daily in our lives and they're often overlooked.

When we deal many times on this floor, and I have spoken of it before, is how do we deal with and what is the cost of regulation and how they are affecting our everyday lives, this is one of the areas, especially with our community pharmacists, that they're affecting right now. It's affecting how they do business.

As one community pharmacist told me recently, that if something doesn't change soon, that in my area of northeast Georgia, which has a vibrant community pharmacy along with PBM pharmacists and others, that within 10 years there may not be a community pharmacist left in northeast Georgia. That's a scary thought, Mr. Speaker.

When you think about that for a second, when you look at an industry that many of us grow up and you have stories going back to when many pharmacists had soda stands; they had just a full-service place where you could go. Even my pharmacist today still has the scoops of ice cream. One of the ways my kids want to come with me to the store is they say, I'll go with you if you're going to Woody's because I want a scoop of ice cream.

So it's a family place. It's something that I think brings back a sense of Americana, but it also hits at the very idea of what we'll just take as just good old-fashioned entrepreneurship--businesses that mean something to our community but also provide a service that is invaluable. Right now I think those are under attack, and those are the things that just concern me.

When we look at that possibility, as the pharmacist told me, he said that there possibly may not even be community pharmacists in our area within the next 10 years, that really struck my attention; and it's made me, before I was even elected, begin to look at what are the problems and how can we address those as we go along.

I can give examples. And I bet almost every Member here on both sides of the aisle can come in and talk about their pharmacist, wherever they may work, but a community pharmacist who they can call on and ask about. My parents--I have watched them grow up and they get older, and when we have questions about their medicines I know that I can call my pharmacist and ask him questions. I know that many of you--and maybe even you, Mr. Speaker--have that person that you can talk to about the drugs and the issues that just keep us healthy.

One of the things that they also help us do, and community pharmacists do, is provide that preventive care that keeps us from getting into these long-term illnesses which drive up the health care costs, which is talked about so much on this House floor. And really from my perspective the tragedy of ObamaCare is: let's get back to the very roots of medicine. And as the doctors were speaking earlier tonight on the floor, talking about how we can do preventive medicine and make sure that the health of our constituents is taken care of, community pharmacists do just that.

One of the first challenges facing our local pharmacists I want to discuss here tonight relates to diabetic testing supplies and the competitive bidding process. Earlier this year, I wrote the Comptroller General Gene Dodaro expressing concern about the impact that the Medicare Competitive Bidding Process will have on patient access to diabetic testing supplies.

Seniors in northeast Georgia, and across the State, rely on their ability to get the testing supplies from their local pharmacists. Many have written to me expressing their concerns that applying competitively bid pricing to independent community pharmacies could negatively impact their access to these essential supplies.

In more rural communities, such as northeast Georgia, an independent community pharmacy may be the only available option for seniors. Their local pharmacist helps them properly use their test strips and meters and provide much needed resource and guidance in managing their disease.

A 72 percent reduction in reimbursement for retail pharmacies that are currently supplying these items to Medicare beneficiaries was announced on January 30, 2013. This reduction in reimbursement took effect on July 1 of this year.

Here are some of the feedback that Georgians have given about the impact that this reimbursement reduction is having on their quality of life and access to care. We've heard things like: ``I've had difficulty finding a new provider; my product of choice was unavailable; I've been forced to change providers; the quality of my care and services is poor; my cost has increased; I've experienced poor communication from CMS; I'm confused about the changes.''

Independent community pharmacists typically sell diabetic testing supplies to provide a service to patients, not to make money. Even before the reduction in reimbursement rates, the profit margins on these supplies were very low.

Now, pharmacists have to choose between keeping their business open or giving their patients the supplies and care they need. This isn't a choice they should be forced to make. In an area and a time in which our economy and jobs are suffering, this is another example of a business that is fighting against the world, so to speak, to stay in business and to employ those 3 or 4 or 5 or up to 10 or 15 people that take care of the people in our communities, Mr. Speaker.

This is something we need to take care of. This is something when you hear the feedback from folks who are calling our office and writing our office and calling their pharmacist and saying: ``I'm having difficulty finding a new provider; I can't make sense of this; I'm forced to change my provider; and the quality and service are poor.'' We need to take a look at what's going on.

Another pressing issue from my local pharmacists is the lack of oversight and transparency when it comes to the pharmacy benefit managers. PBMs are actually one of the least regulated segments of the health care market, yet they are the cause of numerous frivolous audits that local pharmacies are subjected to.

Now, supporting strong PBM transparency requirements is key to delivering real savings to patients. Unlike my local pharmacist, and those across the Nation, PBMs do not have a real relationship with patients. In fact, it is not uncommon for them to secretly retain most manufacturer payments--e.g. rebates, discounts and other fees--instead of passing the savings on to patients.

Additionally, PBMs have been known to switch plan members from low- to high-cost drugs and manipulate generic pricing. At the end of the day, the data points to the fact the PBM market is broken. I can speak to this from my own personal experience. As I've shared before, I believe when we talk about problems, we need to relate it to what people can understand. For this, I can understand it through my family, but also through my parents, who have talked about how their drugs have been changed, or they've been given short notice of changes, or when they get them from their doctor, who gives them the prescription to take them to their pharmacy, they have a problem because they're not going to be certified because there's been a change just in the last little bit in what drug the coverage will make, and the PBMs have had a large part in that.

What I believe is, their conduct is anticompetitive and anticonsumer, and independent community pharmacists are often left vulnerable to their market power.

But there are solutions to this problem. For example, allowing the smaller to collectively negotiate will help level the playing field.

The threat of antitrust liability in the status quo prevents these collective negotiations, and I believe an antitrust exemption is appropriate and consistent with past exemptions enacted by this Congress.

It is with that that I am proud to be an original cosponsor of what is known as the ``Protecting our Hometown Independent Pharmacies Act of 2013,'' which I believe achieves this goal.

The author of this bill, Mr. Marino, and I have had several conversations discussing his examples and what brought him into an understanding of what is going on with our community pharmacists and the problems that have developed here. And I want to applaud, and I want to take out and highlight Members who have brought forward pieces of legislation that I believe matter to our constituents and they matter to the American people.

This is a conservative piece of legislation that brings forward and highlights a problem with our community pharmacists, who are reliable businessmen in their communities. And by doing so and taking that part, Mr. Marino has helped bring forth a piece of legislation that I am glad to support and look forward to moving forward, hopefully through the committee process and onto this floor and eventually signed into law.

Now, understand, there's a lot of discussion that needs to be had here. PBM takes their fair share of blame, and there are a lot of problems in this situation. It is something that we need to discuss because it matters to the people back home, it matters to the very essence of health and health care, which we come down to this well and we talk about all the time. We talk about costs, we talk about the problems with access. This is an area where I believe we can continue to move forward.

There's also another pressing matter facing independent community pharmacists, particularly in northeast Georgia, and that is abusive audit tactics. I believe, like many Americans, that pharmacy audits should be focused on uncovering actual fraud and abuse. Audits play an important role in ensuring high-quality patient care and services.

Unfortunately, PBMs are leveraging their power to abuse the auditing process. They're singling out expensive drugs and using typographical and other trivial errors to recoup from pharmacies significant amounts of money--not to return to Medicare, but to line their own pockets.

Now, this is where I'm going to use an example that I had a few months ago. I had a number of pharmacists, my local pharmacists all over northeast Georgia, came in and they met with me. All I did was, I sent out a note because I had been hearing about this from my local pharmacist and from others, and I said, come talk to me about what you're experiencing.

Like a lot of times--and Mr. Speaker, maybe you've done a similar thing with businesses--you expect maybe three or four people to show up. In my conference room I had a full house. Pharmacists who left and drove, some as many as 2 hours, to come to that office to sit down and talk about the problems that they were facing. What that told me in the middle of the day was that the issues and the problems that they have were more important to them than spending time at their shop that morning, and were finding somebody to cover their shop so they could come talk about this because it's affecting the very quality of their existence.

Now, as we look at this, they began to give me examples. For example, let's say your local pharmacist fills a $500 prescription for you that you called in over the phone or you had called in from the doctor's office. The pharmacist dispensed the correct drug in the correct amount and provided you the correct directions for taking the drug. Mr. Speaker, do we have a problem at this point? I don't think so. You're getting the right drug in the right amount in the right container with the right label. Everything is there on what your doctor had wanted you to have.

But if the pharmacist makes a mistake in his personal records in his checking off--instead of checking the ``called in over the phone'' box he checks ``the faxed in'' box--a PBM could then during their audit of the pharmacy find the mistake and take back the entire $500. Not just the copay, and not just the profit the pharmacy received; they take back the entire cost of the drug.

Now, I've said before, there are a lot of things that make me scratch my head. This is one of them. It's one thing to come in and be audited, it's one thing to find a mistake in which there's a clerical error--and there needs to be some correction to that clerical error. But let me go back, Mr. Speaker, and remind you that it was dispensed properly in the correct amount with the correct drug and the correct facility with the correct directions on there. But, however, on the paperwork on how the call came in, how they took the prescription down, they were audited and deemed for that, and they were not just deemed for the amount of their copay or their profit even; they were deemed for the entire amount of the drug.

What's really interesting about this is I've also had several of my pharmacists say it is eerily interesting to them that when they're audited, it's not the generics that are audited, it is the brand names that seem to be audited, the higher cost drugs that find their way onto the audit list. I think that's really interesting because what happens is if one mistake comes, you're talking about a major cost for these pharmacists. This is not something they can continue to eat.

Now, it can be said they can appeal it, and they can go through the process, but it is something over and over. They don't get to appeal it and hold the money. They have to send the money in and then appeal. Now, does that sound fair? I don't think so.

I think what we've got to do here is begin to look at this problem in its entirety. The PBM could pocket the entire cost of a correctly dispensed drug, even what the pharmacy paid wholesale. This leaves me baffled. Obviously, an auditing measure should be in place, but for transparency and accountability, not to financially penalize one's competitors.

Oh, by the way, some of the PBMs are actually involved in the competitors to the local pharmacies in which they audit. Just a small reminder.

I can stand here all evening and tell you story after story of the unfair and almost unbelievable auditing practices that my local independent folks have had to deal with.

One local pharmacist told me about how they had already been audited three times that year, and they were preparing for their fourth. Mr. Speaker, do you know when he told me that? March. He had been audited three times, getting ready for a fourth, and it was January, February, March. This seems to be a problem.

Interestingly enough, the audits don't focus, as I've already said, on generic drugs. The audits typically look at administrative errors on high-priced drugs.

This comes as no surprise. We know that the PBMs are looking to take money, line their pockets, and not care for patients. They don't sponsor baseball teams, they don't participate in chili cook-offs, and they sure aren't going to any tomato festivals. Patient care takes a back seat to profit margins.

I believe that Congress should take a closer look at PBMs because, in the status quo, after a pharmacy has been audited, recoupment funds go back to the PBM. This is unacceptable. In other words, you're auditing, and the fines that you get, the penalties that you get, go to you. Again, there seems to be an incentive problem here. You're dealing with the high-cost drugs, you're missing the generics, you're looking for clerical errors on correctly dispensed drugs. The patient never had a problem, but yet the pharmacist was deemed.

I'm committed to working with my colleagues to make sure that Medicare is getting its fair share of funds back. There is one word we hear a great deal on this floor. No matter the debate topic it is bound to come up at least once. And that word is ``transparency.''

But there are few areas in which this concept is more important. You see, transparency saves money and helps markets work better. It helps it work as it was intended to work.

Transparency allows plans and payers, including large corporations and governments, to confirm that a PBM is, in fact, providing the service it was hired to do: to secure low drug costs.

Now, remember, in this world of regulation--and for those who know me in my short time up here in Washington, this is one of the issues that I have focused like a laser on, regulation. In fact, tomorrow morning, I encourage Members if they are not busy and they want to come to a regulatory reform caucus breakfast, come see us. We'll have breakfast there for them, and we're going to discuss the effects of regulatory reform and why this matters.

Many times, we in the elected office, we talk about regulatory reform and why it matters, and it's going to make sense. I believe tonight we've shown how it affects local community pharmacists, and that's something that needs to be looked at.

But again, what were the PBMs supposed to do? They were supposed to secure low drug costs. They were supposed to secure a better way for our Medicare savings. This is not what is happening.

Unfortunately, under today's policy, the plan's sponsor has no way to verify that their PBM is sharing manufacturer rebates or that the PBM is negotiating the lowest possible cost for specific drugs. In fact, recent data indicate the exact opposite is occurring. For example, TRICARE anticipates a savings of $1.67 billion by negotiating its own drug prices and rebates for its 9 million beneficiaries rather than going through a PBM. Let me state that one more time, Mr. Speaker. TRICARE anticipates saving $1.67 billion by negotiating its own drug prices and rebates for its 9 million beneficiaries rather than going through a PBM.

I happened to be on this floor for the last couple days and in that chair, listening to discussions on our DOD appropriations and on the struggles that we're having with our funding for our vital services in our defenses. Don't you think that this is something that we can afford, not only in defense, but in other areas as well? I believe it is. The State of Texas estimates it could save $265 million by switching to a transparent PBM contract. This is no chump change we're talking about here tonight.

Although my time draws to a close, I am pleased that the conversations are just beginning. The challenges facing independent community pharmacies are great, but the important role they play in our towns and States is even greater. It is coming to a time and a place like this in which we can look forward to solutions that matter. I did not come to Washington, D.C., simply to watch things happen and to wonder why. I came to be part of a solution. Like you, Mr. Speaker, we are part of a freshman class that came here believing, as I've said before, that this is a place to which people still look to make this country continually the greatest country on Earth, and people look to us for solutions and answers. The way they do that is by looking at commonsense legislation. They look at commonsense solutions that affect them every day.

For many, many people in this country--and especially in my home of northeast Georgia--local pharmacies are a place that sponsor those football teams and baseball teams. They are the places where senior citizens go as I have watched many times in the pharmacies that I go to whether it be my own pharmacy or not.

Just the other day, I went in and saw a sweet little senior citizen lady I'd pastored for 11 years. In my first church, I actually had 45 senior adults. They were all that was there. I was 28 years old, and all of a sudden, I gained all of these grandparents. So, for me, it was something I learned a great deal from. When I watched this sweet old lady come up to the counter, she asked Kevin about some issues that she was having with her drugs. She was trying to figure out what was going on, and Kevin took the time to talk with her and to explain, No, this is not what's really happening. This is what you need to do, and this is the medicine you need to take. He took the time to care.

Pharmacists all across this country--and I want to make this very clear; this has nothing to do with pharmacists individually. Pharmacists, whether they work in large shops or small shops, in community stores or large box stores, are wonderfully dedicated professionals who do a wonderful job. They work hard in helping their customers, and they work hard at helping those who have come in between.

When we deal with this kind of environment, we make sure that our local pharmacies are the ones that can have a chance to continue to grow and to prosper in their communities. When we have our community pharmacies operating as they should, then we are going to be able to continue the process of making sure that our communities have the pharmacies that they can depend on and also a transparency that comes with dealing with these PBMs and with the auditing practices which have been really tearing apart our pharmacies and community pharmacies as a whole.

I go back to that one statement that my local pharmacist said to me. He was sitting there, and he was looking across, and he was explaining what I've talked about here tonight about the auditing practices. He said that, if this doesn't change, our pharmacists will be out of business, that there won't be any pharmacies left in the community world. For northeast Georgia, that would be a tragedy.

I am pleased tonight to also see my good friend from Pennsylvania (Mr. Marino), who has been a real leader in this area, and I am a proud cosponsor of his legislation, the Preserving Our Hometown Independent Pharmacies Act of 2013. I would love to yield to him now to share further on what we've experienced during this time.

Mr. MARINO. Thank you.

Mr. Speaker, today, independent pharmacists are facing an increasing number of challenges that threaten their very livelihoods. These are the independent mom-and-pop pharmacies that all Americans have come to know and to love. They are the neighborhood staples that you have come to rely on. They are where you can go for basic medical advice, and they are where new parents can have their children's prescriptions filled. On average, independent pharmacies fill over 200 prescriptions every day, provide immunization, durable medical equipment, diabetes training, and other vital services. Unfortunately, these independent pharmacies are more vulnerable than ever and are having to lay off workers at an alarming rate.

As more independent pharmacies are forced to close their doors, I am increasingly concerned about the impact that this will have on American families, especially on those in rural areas like my district in northeast Pennsylvania. Not only does their closure jeopardize the local drug supply, but it also has dangerous consequences for the surrounding areas' medical providers--that's right--dangerous consequences for the surrounding areas' medical providers.

One of the biggest dangers to local independent pharmacies is the pharmacy benefit managers industry, or PBMs. Over the past few years, the PBMs' power has become concentrated in the hands of a few, enabling them to dominate over their competition. Independent pharmacies are at a competitive disadvantage, which prevents them from providing their customers with vital prescriptions at a reasonable cost.

I have heard from a number of pharmacists that PBMs have an incredible market power over independent pharmacists. Even worse, the political power of only a handful of companies has enabled them to grow and to swallow their competition, which is only expected to intensify if ObamaCare is fully implemented.

This is why I, along with my colleague to my right and Judy Chu of California, introduced H.R. 1188, the Preserving Our Hometown Independent Pharmacies Act of 2013. This bipartisan, commonsense legislation provides a limited exemption for independent community pharmacists from antitrust laws. My bill would level the playing field by enabling the mom-and-pop pharmacies to work together in order to negotiate better contract terms from the large drug companies and pharmacy benefit managers, or PBMs. The unchecked practice of PBMs has gone on for too long, and it's time we passed H.R. 1188 in order to stop these harmful practices.

Mr. COLLINS of Georgia. I appreciate that.

As our time draws to a close tonight, I am pleased that we can begin these conversations. That's what I want to have with the American people and with our body here, bringing out and highlighting legislation and the work that I believe is being done here, because I believe there are great things that can happen when we pull together and when we find the things that matter to Main Street. When we do that--Congressman Marino and others as we pull forward like this--we are actually bringing ideas to the forefront that help and build our economy, that talk about those jobs, that keep those jobs in the community, and provide a great public service.

When we are looking at a health care situation and an aging population, our community pharmacists need to be a vital player in that market, making sure that our health and our well-being are taken care of in a kind and caring and compassionate way. The challenges facing independent community pharmacists are great, but the important role they play in our towns and States is even greater still.

I want to thank the gentleman from Pennsylvania for his leadership, and I want to thank him for joining me here tonight and for being a part of discussing real solutions and real answers of why a conservative agenda is important to America, because it matters to Main Street, because it matters to real people in everyday life situations.

Mr. Speaker, with that, I yield back the balance of my time.


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