Prescription Drug Costs

Floor Speech

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Mr. GRASSLEY. Madam President, many Iowans rely on pharmacists who operate independently or as part of a small community pharmacy chain. This is especially true in rural Iowa, but I will bet it is true in a lot of other rural States as well. In Iowa, we have over 300 independent pharmacists, and many work in multiple rural communities. These pharmacies are small businesses serving Iowa communities like Muscatine and Sioux City.

These pharmacies want a level playing field to compete with anyone whether that is a big chain or whether it is another independent pharmacy. Yet the pharmacists I hear from are being hurt by retroactive direct and indirect remunerations. I am going to refer to them as ``DIR'' fees. They have to work with pharmaceutical benefit managers in regard to those fees, and there are conflicts between them that I hear about all the time. This all deals with Part D Medicare plans. What I am talking about with regard to direct and indirect remunerations and these negotiated fees with PBMs are what are sometimes known as clawbacks.

Every day, seniors go to the drug store, and they probably always pay a copay. These seniors then rightfully believe that they are paying the lowest amount possible, but that is not always the case. After the patient pays and leaves the pharmacy, the Part D Medicare plan or a PBM, a pharmacy benefit manager, contacts the local pharmacist to claw back a certain amount paid. That is where this DIR fee comes in. This action actually lowers the cost of the drug, but the patient doesn't know it. Because of these DIR fees, seniors pay a lot more than they need to for the pills they get at the pharmacy.

One Iowa rural pharmacist told me that DIR fees, clawbacks, are not only costing the patient more in the form of a higher copay, they are also costing that local pharmacy. From 2010 to 2020, Part D Medicare plans and the PBMs increased the DIR fees by over--can you believe this?--104,000 percent. DIR fees now total over $9 billion a year. Pharmacists, especially those operating independently in rural areas but particularly in rural Iowa, whom I hear about, have told me, if DIR fee clawbacks do not get under control, pharmacists will not survive. Of course, we hear--maybe not every day, but we hear quite often--about those small pharmacists going out of business, and these DIR fees are often cited to us as one of the reasons. This will then leave Iowans without access to the local pharmacy for medication therapy management and for other care.

I have a bipartisan solution to solve this problem that ends DIR fee clawbacks.

In 2019, the senior Senator from Oregon and I negotiated and introduced a bill that we entitled the ``Prescription Drug Pricing Reduction Act,'' also known as Grassley-Wyden. I don't even care if it is known as Wyden-Grassley. The Grassley-Wyden ends DIR fee clawbacks. This will reduce out-of-pocket expenses and provide pharmacies with financial predictability. This move may even keep rural pharmacies viable.

On top of my legislative efforts in Grassley-Wyden, I commend the Centers for Medicare and Medicaid Services for issuing a proposed rule to end DIR fee clawbacks. I am not sure that that proposed rule exactly does what the Grassley-Wyden bill does, but it is still a step in the right direction, and I welcome that. In welcoming it, I have submitted comments, asking the Centers for Medicare and Medicaid Services to strengthen the proposed provision as much as the existing statute allows. Of course, we ought to finalize that proposed rule without delay.

In addition to ending DIR fee clawbacks, I am committed to passing Grassley-Wyden. I hope, now that Democrats worked on Build Back Better last year with provisions that they thought would reduce pharmaceutical drugs--and it doesn't seem to be moving--that, instead of going the partisan way, they would take a look at a bipartisan way of trying to get something done on prescription drugs and, at the same time, end the DIR fee clawback.

This bill, as a whole, besides dealing with the clawbacks, will lower prescription drug costs in a comprehensive manner. It actually takes on Big Pharma. You probably know that, in this body, there are some people who say we should just leave Big Pharma alone, but I know that they do wonderful work. I know they have to have their money for research, and I know they have to be able to market their products in a free market way, but when you have these big pharmaceutical price increases maybe a couple of times a year, it is time we do something about it.

Besides this clawback provision, Grassley-Wyden caps out-of-pocket expenses, eliminates the doughnut hole, and in dealing with these price increases every year, it caps rising prices at the inflation price index. It also brings more sunshine and accountability, particularly to the pharmacy benefit managers.

Nobody seems to be able to tell us anything as to what goes on between the health insurance companies, the pharmaceutical companies, the PBMs, and the local pharmacists and then how that affects the consumer. We ought to know exactly where those moneys go and what those negotiations are, and Grassley-Wyden does something about that.

So I urge my colleagues to join Wyden and me in that effort.

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