Securing Growth and Robust Leadership in American Aviation Act

Floor Speech

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Mr. GRASSLEY. Mr. President, I have come to discuss with my colleagues the plight of our local pharmacists, which is always difficult, particularly in small towns; but it is going to be particularly difficult come January 1 and through next year. I have heard firsthand from rural pharmacists about the looming cashflow challenges that they face next year. These challenges are a direct result of the powerful pharmacy benefit managers and the managers' behavior in response to Federal regulations.

This is the situation. You see, pharmacies are going to face direct and indirect remuneration clawback fees, or what we call DIRs, from the PBMs for calendar year 2023, just after January 1, 2024. At the same time, pharmacies will also be facing lower post point of sale reimbursement from PBMs beginning that same date of January 1 of next year. So it is a double whammy against cashflow problems of small rural pharmacies.

For over a decade, these powerful PBMs have gouged rural pharmacies by clawing back part of the reimbursements many months after the sale. It is almost like you sign a contract the first of the year that you are doing business with the PBMs. Then, at the end of the year, you get a dun to pay back sometimes thousands of dollars, and I have even heard examples of tens of thousands of dollars.

You see, this situation comes because three very large PBMs control nearly 80 percent of the prescription drug market. Some of them are vertically integrated, also, with chain pharmacies, insurance companies, and other parts of the prescription drug supply chains. So PBMs have a lot of power over what the prescription drug patients can access through the formulary and how much these drugs are going to cost the patient and then the reimbursement for the pharmacy. In other words, what is the pharmacy getting paid for doing this service?

I want to end all direct and indirect reimbursement fees. I attempted to do this in legislation, which never passed the Senate, in a bipartisan bill by Grassley and Wyden called the Prescription Drug Pricing Reduction Act. Even though the legislation didn't pass, we, luckily, in 2021, had the Centers for Medicare and Medicaid Services determine that that Agency had the authority to end most but not all direct and indirect reimbursement fees.

I support CMS's actions they have already taken, but we still need to take legislative action to end all DIR fees. CMS's regulations will go into effect this January. With CMS's regulations nearing the effective date to end most DIR fees, you would think rural pharmacies would be about to see some relief. Sadly, this is not the case. These changes have turned into a cashflow issue for many rural pharmacies, forcing many rural pharmacists to consider closing or going without pay for a while so that they can keep their staffs around and keep the lights on.

Now let's get to a suggested solution for this issue.

PBMs should work with rural pharmacists to make sure that they don't close, because if you are paying everything back to the PBMs or you are getting less reimbursement and you are running your accounts from day to day, it brings financial problems particularly to these small rural pharmacies. Of course, PBMs are so financially strong that they have the ability to help these small pharmacists after the first of the year. We aren't asking them to help forever; we are asking them just to help through this interim period of clawback and less reimbursement. So what I am asking here of PBMs is PBMs should work with pharmacies to give a little extra time to pay back the 2023 direct and indirect reimbursement fees. I am not asking the PBMs to give up a single dollar that they are entitled to.

Because CMS can help us solve this problem, in their final regulation, the Agency spoke to concerns about rural pharmacy cashflow issues, saying that they were--their words--``particularly attuned'' to this issue.

CMS said that, through law, they have the power to conduct oversight. They said that they could enforce, first of all, provider network access standards and, second, prompt payment rules.

In July, I wrote to the CMS Administrator to see what the Agency is doing to conduct this oversight and, in turn, help small pharmacies through 2024--and, of course, only that 1 year--with their cashflow problems.

As of mid-September, I had not received a response from CMS. I will soon tell you about a telephone conversation I had with them. It shouldn't take an Agency almost 2 months to respond to me about a problem that they said that they are ``particularly attuned'' to. Remember, I told you previously those words--``particularly attuned'' to--are their words.

So last week I spoke for a long time on the phone with the CMS Administrator. I asked what her Agency is doing to conduct oversight and protect our constituents' access to their rural pharmacy and particularly our older seniors who can't travel for miles to get their drugs. I asked that question because, so far, I have not seen any action of oversight by this Agency.

The Administrator committed in the phone call to monitoring compliance to pharmacy access standards and the prompt payment requirements, but, at the same time, the Administrator didn't offer any specific action that she has taken or even what action she might take.

The Administrator also committed to looking into what the Agency can do to encourage payment plans between rural pharmacies and PBMs or, at the very least, bring rural pharmacies and PBMs together to work out a joint effort. I am going to be holding the CMS accountable for following through on that promise.

Iowa's seniors and rural pharmacies are counting on the Centers for Medicare and Medicaid Services. The Agency can't sit on the sidelines and let rural pharmacies go out of business.

I told this directly to the CMS Administrator, and I will state it now to the same CMS Administrator: Please use your authority and bully pulpit to protect seniors' access to their rural pharmacies. These very powerful PBMs, which receive a lot of public funding from Medicare and Medicaid Programs, can also put many rural pharmacies out of business if you just stand down. PBMs can't put the blame on others. They must and ought to work with rural pharmacies. Don't drive them out of business by idly standing by. PBMs have the opportunity to protect seniors' access to their local pharmacy.

It is kind of this situation in rural America because I see it all the time in rural Iowa--losing local health delivery professionals. It happens that your local pharmacy is oftentimes the only healthcare provider that you have. So, obviously, and what I am telling my colleagues today is, we need them in our communities,

I say to my colleagues--because everybody in the U.S. Senate has rural communities--I hope you will check into this situation affecting small pharmacies, starting January 1, 2024. We have got about 3 months to get CMS, rural pharmacies, and PBMs together to smooth out this cashflow problem that rural pharmacies are going to have through next year.

I am not going to stop fighting to protect rural pharmacies.

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