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IMPACT OF OUR ANTITRUST LAWS ON

COMMUNITY PHARMACIES AND THEIR PATIENTS

HEARING

BEFORE THE

TASK FORCE ON ANTITRUST 

AND COMPETITION POLICY

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

OCTOBER 18, 2007

Serial No. 110–85

Printed for the use of the Committee on the Judiciary

(

Available via the World Wide Web: http://judiciary.house.gov 

(II)

COMMITTEE ON THE JUDICIARY 

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. (BOBBY) SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

LINDA T. SA ́ NCHEZ, California 

STEVE COHEN, Tennessee 

HANK JOHNSON, Georgia 

BETTY SUTTON, Ohio0

LUIS V. GUTIERREZ, Illinois 

BRAD SHERMAN, California 

TAMMY BALDWIN, Wisconsin 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

ARTUR DAVIS, Alabama 

DEBBIE WASSERMAN SCHULTZ, Florida 

KEITH ELLISON, Minnesota 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

STEVE CHABOT, Ohio 

DANIEL E. LUNGREN, California 

CHRIS CANNON, Utah 

RIC KELLER, Florida 

DARRELL ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TOM FEENEY, Florida 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio

PERRY APELBAUM, Staff Director and Chief Counsel 

JOSEPH GIBSON, Minority Chief Counsel 

TASK FORCE ON ANTITRUST AND COMPETITION POLICY

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

STEVE COHEN, Tennessee 

BETTY SUTTON, Ohio 

ANTHONY D. WEINER, New York 

DEBBIE WASSERMAN SCHULTZ, Florida 

RIC KELLER, Florida 

STEVE CHABOT, Ohio 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

CHRIS CANNON, Utah 

DARRELL ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

LAMAR SMITH, Texas, Ex Officio 

PERRY APELBAUM, Staff Director and Chief Counsel 

JOSEPH GIBSON, Minority Chief Counsel 

(III)

C O N T E N T S 

OCTOBER 18, 2007

Page 

OPENING STATEMENTS 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Chairman, Task Force on Antitrust and Competition 

Policy ..................................................................................................................... 1

The Honorable Ric Keller, a Representative in Congress from the State of 

Florida, and Ranking Member, Task Force on Antitrust and Competition 

Policy ..................................................................................................................... 9

The Honorable Anthony D. Weiner, a Representative in Congress from the 

State of New York, and Member, Task Force on Antitrust and Competition 

Policy ..................................................................................................................... 10

The Honorable Steve Chabot, a Representative in Congress from the State 

of Ohio, and Member, Task Force on Antitrust and Competition Policy ........ 12

The Honorable Darrell Issa, a Representative in Congress from the State 

of California, and Member, Task Force on Antitrust and Competition Policy .......................................................................................................................... 13

WITNESSES 

Mr. Mike James, Vice President, Association of Community Pharmacies Congressional Network, and Pharmacist/Owner, Person Street Pharmacy, Raleigh, NC 

Oral Testimony ..................................................................................................... 14

Prepared Statement ............................................................................................. 16

Dr. Peter J. Rankin, Principal, CRA International 

Oral Testimony ..................................................................................................... 18

Prepared Statement ............................................................................................. 21

Mr. David Wales, Deputy Director, Bureau of Competition, Federal Trade 

Commission 

Oral Testimony ..................................................................................................... 53

Prepared Statement ............................................................................................. 56

Mr. David A. Balto, Antitrust Attorney, on behalf of the National Community 

Pharmacists Association 

Oral Testimony ..................................................................................................... 77

Prepared Statement ............................................................................................. 79

Mr. Robert Dozier, Executive Director, Mississippi Independent Pharmacists 

Association 

Oral Testimony ..................................................................................................... 115

Prepared Statement ............................................................................................. 117

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

H.R. 971, the ‘‘Community Pharmacy Fairness Act of 2007’’ .............................. 2

(1)

IMPACT OF OUR ANTITRUST LAWS ON COMMUNITY PHARMACIES AND THEIR PATIENTS 

THURSDAY, OCTOBER 18, 2007

HOUSE OF REPRESENTATIVES,

TASK FORCE ON ANTITRUST

AND COMPETITION POLICY

COMMITTEE ON THE JUDICIARY, 

Washington, DC.

The Task Force met, pursuant to notice, at 9:40 a.m., in Room 

2141, Rayburn House Office Building, the Honorable John Conyers 

(Chairman of the Task Force) presiding. 

Present: Representatives Conyers, Lofgren, Jackson Lee, Waters, 

Sutton, Sherman, Weiner, Chabot, Keller, Issa, and Feeney. 

Staff Present: Stacey Dansky, Majority; Stewart Jeffries, Minority Counsel; and Benjamin Staub, Professional Staff Member. 

Mr. CONYERS. Good morning, ladies and gentlemen. 

The Committee has joined me here, the Antitrust Task Force 

hearing, to examine the impact of our antitrust laws on community 

pharmacies and their patients. I don’t think anyone in the Congress has not been visited by their constituents on this matter. 

And today we delve into an aspect of the health care industry 

that is frequently overlooked but, in my mind, may be one of the 

most important parts of the whole system, because pharmacies 

serve as the interface between consumers and their medication, a 

vital link. And independent pharmacies provide necessary and important services to patients all over the country and in places 

where, without them, there might not be any service for those consumers that might need it. 

Now, there is a common agreement that the health care system 

is in trouble. It has become so expensive that almost 50 million 

Americans don’t have coverage of any kind, and some 20 million or 

more that do aren’t covered for the right thing that they unfortunately find out when they go into their doctor or hospital. 

According to the Institute of Medicine, some 18,000 people die in 

this country each year because of lack of health care. What I am 

saying really is they don’t have the insurance that would allow 

them to be served by a doctor, clinic or a hospital. And we pay, in 

this country, on a per capita basis, more for health care, receive 

less from health care, and experience less satisfactory outcomes 

than many other countries in the world that have a universal 

health care system. 

2

Independent pharmacies are also suffering in today’s health care 

marketplace. We are told, and we will hear here today, how they 

are being driven out of business because they can’t compete with 

large retail pharmacies and cannot survive with the low reimbursement rates that are given to them now. 

So, given the importance of the human interaction between the 

patient, the doctor and the pharmacist, the ability to ask questions 

about drugs and get prescriptions filled immediately is a very important consideration. A substantial part of the crisis in our health 

care is the cost of prescription drugs and the prescription drug program currently in place. 

According to a report issued by the premiere Oversight Committee in the House, it said that privatizing the delivery of the 

drug benefit has enriched the drug companies and insurance industry at the expense of seniors and taxpayers. The report concluded 

that insurers participating in Medicare Part D do not cover prescription drugs as efficiently as other programs do, and that Medicare Part D beneficiaries and taxpayers could be saving billions of 

dollars per year if seniors got their Part D benefits directly from 

Medicare instead of through insurance companies. 

The report went on to conclude that administrative costs sometimes run six times higher in private health insurance companies 

than in Medicare’s traditional fee-for-service program. Approximately $4.6 billion went into administrative costs and other expenses in fiscal year 2007, and a billion dollars of that amount was 

steered toward insurance company profits. 

The Chairman of the Oversight Committee, the gentleman from 

California, Henry Waxman, stated further that the program inflated administrative costs and meager drug rebates, and that that 

will cost taxpayers and seniors $15 billion in this year alone. So, 

based on that report, it seems clear that, because of Medicare Part 

D, small pharmacies have suffered because of higher administrative costs, approximately some $15 billion a year. And that has prevented the reimbursement of pharmacies at a higher rate than the 

traditional PBMs do now. A proposed solution is to allow independent pharmacies to collectively negotiate for a better reimbursement rate. 

One of the Members of this Committee, and present here today, 

Anthony Weiner of New York, has put forward a proposal to alleviate some of the problems facing independent pharmacies and has 

a measure, H.R. 971, which we will hear more about. 

[The bill, H.R. 971, follows:]

3


HR971-1.eps
4


HR971-2.eps
5


HR971-3.eps
6


HR971-4.eps
7


HR971-5.eps
8


HR971-6.eps
9

Mr. CONYERS. But such an arrangement would require a special 

exemption to our antitrust laws in that regard. And so, while I am 

generally disinclined toward exemptions to antitrust laws, there 

could be particular circumstances where a carefully crafted exemption could be warranted. 

And so, today, we hear from witnesses to discuss whether such 

an exemption in the case of independent pharmacies is warranted. 

And these are a few of the crucial questions that we have gathered 

here today to discuss with our friends in the pharmacy industry. 

They waited a long time for this hearing, and I am glad that we 

are here to oblige you in that request this morning. 

And I’d like now to ask Ric Keller, who is our acting Ranking minority Member, to begin his discussion of this matter before us. 

The gentleman from Florida is recognized. 

Mr. KELLER. Thank you very much, Mr. Chairman. And I want 

to especially want to thank you for convening this hearing on the 

Task Force on Antitrust and Competition Policy. 

One thing I have to correct that you said that I have a little disagreement with, you referred to the Government Reform Committee as the premiere oversight Committee in Congress with——

Mr. ISSA. And rightfully so. 

Mr. KELLER. With you at our leadership, we kind of think the Judiciary Committee is the premiere oversight Committee in Congress here. But that will probably earn me a subpoena from Mr. 

Waxman shortly. 

I want to thank all of you for being here today. 

Today’s hearing on the impact of the antitrust laws on community pharmacists reflect a familiar theme in the Antitrust Task 

Force hearings, namely, how did the antitrust laws balance the 

needs of large companies on one hand with the needs of smaller 

companies on the other? 

In today’s hearing, the smaller companies are the independent 

pharmacies. For many years, they felt that the actions of the large 

companies—in this case, the larger chain stores, the HMOs and 

now pharmacy benefit managers, or PBMs—have been making it 

difficult for them to compete. They feel that the PBMs, which they 

claim cover almost 95 percent of all prescription drug purchases in 

this country, exercise market power of the independent pharmacies. 

They say that market power, in turn, allows the PBMs to dictate 

‘‘take it or leave it’’ reimbursement contracts with the independent 

pharmacies, and that those low reimbursement rates are driving 

many of the independent pharmacies out of business. To combat 

this perceived market power, the independent pharmacies claim 

that they need an antitrust exception to allow them to negotiate effectively with the PBMs. 

In contrast, the PBMs feel that they are lowering prices for the 

American consumer. Specifically, they argue that volume discounts 

help seniors get lower prices for their prescription drugs. They 

claim that independent pharmacies can negotiate some terms of 

the reimbursement contracts already. And they, along with the 

Federal Trade Commission, have expressed concern that allowing 

independent pharmacies to have an antitrust exemption would 

10

allow the pharmacies to engage in price-fixing arrangements or 

boycotts that could hurt consumers. 

To that end, PBMs commissioned a study by Charles River Associates that shows that an antitrust exemption can cost consumers 

as much as $29.6 billion over 5 years. That number includes 6.4 

billion under the Medicare Part D prescription drug plan. 

The Supreme Court has observed that the antitrust laws exist to 

protect competition, not competitors. It is therefore incumbent upon 

us to examine this issue to see whether a legislative fix is absolutely necessary. Certainly, Congress should be mindful of the role 

that small business plays in our communities and in our economy, 

and should do everything it can to promote those businesses. At the 

same time, Congress must also be aware of the cost of its actions 

on the American consumer and the critical need for senior to have 

access to low-cost prescription drugs. 

I look forward to hearing from all of our witnesses on this topic 

today. Let me just explain that I am personally very interested in 

what each and every one of you have to say and will read your 

statement. I have a markup at the exact same time, which I will 

have to go to and fro. And if I am not here, it is not that I am not 

interested, but just required to be elsewhere temporarily. But 

thank you very much for being here today. 

And, Mr. Chairman, I yield back the balance of my time. 

Mr. CONYERS. Thank you, Mr. Ric Keller. 

The Chair is going to recognize Mr. Weiner, Mr. Darrell Issa and, 

just briefly, the gentleman from Ohio, Mr. Chabot. And we begin 

with the distinguished gentleman from New York. 

Mr. WEINER. Thank you, Mr. Chairman, and I appreciate your 

calling this hearing and, frankly, organizing the Committee as it is, 

that you, as the Chairman, will be looking seriously at antitrust 

issues, because I think there are myriad issues that we need to understand a lot better around here. 

You know, with all of the complicated things that are going on 

in health care and all of the debates that we’re having—do we 

want larger government solutions or more private-sector solutions; 

do we want a business-based structure or a single-payer system, 

like Mr. Conyers and I have proposed—of all of the things we have 

disagreement on, very rarely, if ever, does anyone ever stop any of 

us in our communities and say, ‘‘Boy, you have got to do something 

to wipe out those neighborhood pharmacists.’’ Very rarely do we 

hear people complain about that man or woman behind the counter 

in our neighborhood shopping strips, in our towns and villages, because, frankly, with more and more of the challenges facing consumers with health care, more and more of the responsibility that 

should be perhaps placed elsewhere is being laid on the counter of 

our neighborhood pharmacists. They are being asked to wrestle 

with Part C and now Part D. 

I would argue that when Medicare Part D was initiated and 

started to roll out that pharmacists should have been paid as if 

they were civil servants for all the questions that they had to answer, all the details they had to explain, all of the combinations 

and permutations. It was not uncommon for someone to call up my 

office, ask a question about Part D, still have a little bit of concern 

11

and say to one of my staffers, ‘‘That’s okay. I’ll just ask my pharmacist the rest.’’

And so, we have to realize that it is imperative on the part of 

us in Congress to make sure that that element of our health care 

system survives. Not only are we failing at that, but we are making 

it, every single day, more and more difficult for community pharmacists. You know, the changes that we made in reimbursements, 

the changes that we made in regulations have made it more and 

more difficult for neighborhood pharmacists to survive. 

I did a study of New York City in 2003, and I looked at from 

1990 to 2003—the data is a little bit dated by now—1990 to 2003. 

And we found out that, of the 1,600 community pharmacists, we 

had a 30 percent drop in that period, from 1990 to 2003, while the 

chain pharmacies had had a 263 percent increase. Now, what is 

happening is the chain pharmacies, as they grew stronger and 

stronger and their ability to compete was more and more consolidated, the neighborhood pharmacists disappeared. 

So what is it that can we do? Well, there are some things that 

we can do. We can obviously go back and revisit the reimbursement 

rates, and I think we are going to in the guise of another Committee. But one of the easiest things that we can do is allow our 

common sense, meaning common among Democrats and Republicans alike, that competition has a way of helping solve these problems in the benefit of the consumer. 

If we allow individual neighborhood pharmacies not just to operate as islands, but to be able to work together to negotiate with the 

big PBMs—and you can argue both ways that PBMs might save 

money, it might cost service, but that’s the reality of the system 

that we have now, that the PBMs hold a lot of cards; the HMOs 

hold a lot of cards. And the chain stores do this every day. The 

chain stores, whether they’re Rite Aid or Walgreens or Wal-Mart, 

they get together and they say to the PBMs, ‘‘Look, because we 

have 200, 300, 400 stores, we’re going to negotiate for lower prices.’’

What my legislation does—and it is sponsored by Democrats and 

Republicans, like Mr. Coble was a sponsor in the last Congress and 

in this one; the bipartisan Small Pharmacy Coalition that we 

formed here in the Congress supports it—what we’re saying is, listen, let’s let these neighborhood guys band together and do their 

best to compete. 

Now, are 20 or 30 in central Florida going to be able to band together and have the heft of a Wal-Mart? Probably not. But it would 

give them a little bit more advantage that they are not going and 

negotiating for prices for one person, they are going for five or six 

or seven. 

Now, I have seen a study—and Mr. Keller, who laid out the 

issues here quite well that we have to confront—that said, well, 

this might mean added costs. Well, if that is the argument, then 

you have got to tell me why we allow competition anywhere. Maybe 

we should just allow the benevolence of the PBMs to just look out 

for us all and hope that it’s in our best interests. 

We are not seeing saying who should win or lose. What we are 

saying is that the playing field should do the best we can to allow 

people to compete. 

12

Now, where are those costs going to go? I don’t know if there will 

be any higher costs. I think what will probably wind up happening 

is PBMs are going to have people driving a harder bargain on behalf of whom? The consumer. The consumer is ultimately who 

these neighborhood pharmacies represent. When they go back and 

say, ‘‘I want a lower price for this drug’’ to the PBM and I’ve got, 

now, 50 of my buddies with me, rather than just little old me, what 

winds up happening? Now, does the PBM say, ‘‘Okay, we’ll give you 

a $5 discount.’’

But that is what we are supposed to be trying to encourage here. 

There are a lot of deeply partisan issues about how you deal with 

health care. I think competition is the abiding thing that we all 

agree that, if we had, everyone would benefit from. 

So the chain stores, they already have this. We’re not asking—

they’re not going to lose a single right. If you are someone who is 

advocating on behalf of letting the chains stores prosper, so be it; 

they don’t lose a single right. H.R. 971 doesn’t not touch them one 

wit, unless you think that allowing a chain pharmacy to be able to 

better compete harms them. If you don’t want competition, I don’t 

think you should come here to the Judiciary Committee and say it. 

So this is a case that we can do something that has no cost to 

the Government, has little administrative costs, if any, to the Government, because it will be individuals who are going to be able to 

negotiate. And it allows us to do something now, quickly and immediately, to try to save the one last remaining noncontroversial element of our national health care system, and that is the neighborhood community pharmacist who is there every single day, answering questions large and small, dealing with a much more complicated, complex world of pharmaceuticals than we’ve ever had before. 

Before I yield back, think for a moment whether or not we would 

be better off or worse off if we continue this decline of community 

pharmacies closing. And I think you will realize, almost by any 

measure, we’d be worse off. 

And I thank you, Mr. Chairman, for holding this hearing. 

Mr. CONYERS. Well, I appreciate that analysis. 

And I now turn to my friend from California, Darrell Issa, who 

has never been shy—I had to cross out some adjectives. ‘‘Shy,’’ ‘‘retiring’’ and ‘‘unassuming’’ were never phrases used to describe the 

gentleman from California. And yet we recognize him now for 5 

minutes. 

Mr. ISSA. Well, thank you, Mr. Chairman. My wife often says 

‘‘seldom mistaken, never in doubt,’’ when describing me. Perhaps 

you could use that in the future. That sounds like a good one. 

Mr. CONYERS. Would the gentleman——

Mr. ISSA. I would yield to the gentleman from Ohio. 

Mr. CHABOT. I’ll be very brief. I’m the Ranking Member of the 

Small Business Committee, and we have a markup at 10 o’clock. 

So we are definitely going to review the testimony of all the folks. 

This is a very important issue. I want to thank the Chairman 

and the Ranking Member for holding this. Unfortunately a bunch 

of us have things at the same time. 

So I want to thank the gentleman for yielding. I intend to come 

back. Thank you. 

13

Mr. CONYERS. I support the notion that the gentleman from Ohio 

has been working on this issue for quite a long time. 

And I thank the gentleman for allowing the interruption. 

Mr. ISSA. Thank you, Chairman. And thank you for holding this 

important hearing. 

I think, sometimes in these hearings, there is a preconception 

that we have already made our mind up. Nothing could be further 

from the truth, because the nature of legislation that rebalances 

antitrust is a delicate one. I think we all understand that somewhere between ‘‘antitrust’’ meaning no monopolies and ‘‘antitrust’’ 

meaning you can’t talk to your wife about what is happening in her 

part of the business versus yours is where is the balance we want 

to achieve. 

Having been a small-business man for many, many years in the 

electronics industry, I dealt with buying groups. I understand both, 

as a manufacturer, the negative that buying groups demand better, 

sharper prices, or, as they like to say, ‘‘sharpen your pencil.’’ I also 

understand that you make one call, you negotiate one contract, and 

then you’re able to sell in to a much larger network. 

I think here today that we’re balancing the fact that individual, 

family-owned and nonpublic drugstores are, in fact, inefficient to 

deal with. We, in fact, realize that to call on one store and negotiate one contract is, by definition, more expensive than going down 

to Walgreens or CVS or Wal-Mart, if you can get to Arkansas with 

a couple of flights, and negotiating contracts. So there’s a tradeoff. 

At the same time, we also understand that small businesses have 

been the innovators, small businesses have provided great service. 

And we want to make sure that they are allowed, under our antitrust law, to survive. 

So, as we look at Mr. Weiner’s legislation, either in whole or in 

part, or as is or with changes, I believe that what we’re going to 

find is a lot of the testimony here today serves an understanding 

of why you can have a buyer’s group to buy drugs; what you can’t 

do is have a group that agreed to be under a common contract that 

is, in fact, perhaps less competitive, less sharpened-pencil than 

CVS or Walgreens, and yet better for the companies who negotiate 

one contract for perhaps 200 or 300 small businesses, where the 

tradeoff for them also is a common contract. 

In preparation for this, I discovered that there is no question 

that large companies, such as Wal-Mart and CVS—all of whom I 

applaud their ability to deliver good products at a good price—they 

also start off with a comparative blank sheet of paper when negotiating these contracts. If, in fact, what you have is one store on the 

corner near my home, you were sent a contract which you will sign 

or you will not participate. That cannot be allowed to continue. 

So when we’re looking at balancing antitrust, Mr. Chairman, I 

believe what we’re going to see is we’re going to see that if you 

have 10 percent market share with Wal-Mart and 4 percent market 

share with another chain and 6 percent with another chain, that 

if, in fact, independents come together and have no greater market 

power than, let’s say, either the average of the top three or certainly no greater than the greatest in an area, that, by definition, 

the rebalancing could do no harm to the intent of the antitrust 

laws, which is to ensure that there is competition. 

14

The fact is that the independents today represent perhaps too 

much of small and not enough to compete against big. And I look 

forward to hearing it in detail. I look forward to working with Mr. 

Weiner and this Committee on legislation that really could provide 

a narrow but meaningful exemption. 

And, with that, I yield back. 

Mr. CONYERS. I thank the gentleman very much for his presentation. 

Mr. Weiner and myself, right now, so far, we are the witnesses 

and you are the Committee. Because you’ve heard some fascinating 

analysis that could be the basis of a discussion on these views 

alone. 

But now it’s your turn. And what a wonderful set of five witnesses: Dr. Robert Dozier, attorney David Balto, David Wales, and 

Peter Rankin, and finally Mike James. What a great way to begin 

or, really, more accurately, continue this discussion that has been 

started. 

And so, I want to begin with Mike James, the vice president of 

government relations at the Association of Community Pharmacists 

Congressional Network. He is an owner of independent pharmacies 

in North Carolina and Florida. He has chaired the North Carolina 

Retail Merchants Association and was named North Carolina pharmacist of the year. 

We’ve got all your testimony; it will go into the record. 

And we invite you to begin, sir. 

TESTIMONY OF MIKE JAMES, VICE PRESIDENT, ASSOCIATION 

OF COMMUNITY PHARMACIES CONGRESSIONAL NETWORK, 

AND PHARMACIST/OWNER, PERSON STREET PHARMACY, RALEIGH, NC 

Mr. JAMES. Thank you very much, Mr. Chairman——

Mr. CONYERS. Try to press the button again. 

Mr. JAMES. Is it working now? 

Mr. CONYERS. It doesn’t seem to be working now. We’ve been 

having a lot of technical difficulties in this hearing room, and I 

apologize for that. 

Mr. JAMES. How about this one? 

Mr. CONYERS. Excellent. 

Mr. JAMES. Chairman Conyers, Ranking Member Keller, Members of Antitrust Task Force, good morning. And thank you for allowing me to testify this morning on behalf of the Association of 

Community Pharmacy Congressional Network and the independent 

hometown pharmacies they represent across the country. I would 

also like to thank you for holding this hearing to address a crucial 

problem in the health care system. 

My name is Mike James. I am vice president and director of government affairs for the Association of Community Pharmacy Congressional Network and a practicing pharmacist at an independent 

community pharmacy in Raleigh, North Carolina. 

As managed care became the norm in the health care industry, 

pharmacy benefit managers began to realize they could become a 

bigger player in the business of health care. Their business model 

was to manage prescription programs and promise huge savings, 

15

but these so-called savings came with a high price for consumers 

and pharmacies. 

Today, about 95 percent of all prescriptions filled in the United 

States are handled by PBMs. As a result of this power, the PBM 

industry now dictates, without negotiation, reimbursement rates 

and terms of contracts to independent pharmacies. In order to continue serving your patients, pharmacies are required to fill prescriptions under PBM arrangements at prices that do not cover 

cost. This has resulted in the closing of 1,152 independent hometown pharmacies in 2006. 

Every pharmacy owner I have spoken with who has closed indicated that their reason for closing was low third-party PBM reimbursements. The PBM strategy is working well, and I believe we 

will see a larger number of closings this year and next if nothing 

is done. 

The takeover by PBMs is also resulting in movement on a large 

scale of senior patients to mail-order prescription programs. They 

have no say in how their pharmacy benefits will be delivered and 

are afraid to complain in fear of losing their benefit. These patients 

are denied their traditional right to seek personal and confidential 

professional assistance from local hometown pharmacy professionals. 

Today the goal of PBM contracts is not to support critical pharmacy-patient relationship. Rather, the goal is to systematically undermine the solvency of independent pharmacies and force patients 

covered under these agreements into highly profitable proprietary 

mail-order programs. This is a conflict of interest. The PBMs run 

their own mail-order programs in direct competition with retail 

pharmacies. There is a distinct inequity by forcing patients to pay 

a higher co-pay in the pharmacy than they pay through mail-order. 

And it is putting patients at a disadvantage by not allowing a local 

retail pharmacy to fill a 90-day supply which is offered through 

mail-order. 

You will be told that allowing negotiations will increase costs by 

$29 billion. This is strictly a decision of the PBM. PBMs have great 

flexibility in determining how much they shift over to patients and 

taxpayers. 

CMS handed over all power and authority to PBMs to run Medicare Part D, but rather than be good stewards of the payers’ interests, the $29 billion indicates that Charles River Associates and the 

Congressional Budget Office understand well that PBMs will continue to put their profits above the interest of the patient. If the 

cost goes up, it will be because the PBM raised cost, not because 

the pharmacies were allowed to negotiate. 

You will also be told that surveys show a huge majority of Medicare Part D patients are happy with the program. I would contend 

this survey didn’t include those patients who have entered no coverage zone or the donut hole, as it is called. I own a pharmacy, and 

I do surveys every day. And every day, I counsel patients who have 

hit the donut hole and have no idea how they’re going to buy their 

medication. 

The patient is paying a monthly premium; the Federal Government is paying a monthly allowance to the PBM. The patient is 

paying the total cost of the medication and is trapped in the donut 

16

hole until the new year begins. All this time, the PBM is collecting 

money and paying nothing to help the patient receive their medication. 

I can assure you, these patients are not happy with the program. 

In many communities, pharmacies are the primary or only health 

care resource for American families. The human interaction with a 

patient is a vital part of the entire process of the delivery of care 

to the public. This is a fulcrum of the integration of standard of 

care for the patient. 

Independent pharmacies must have the right to negotiate to keep 

these PBMs from taking over the prescription-delivery system, but 

antitrust law prohibits this right. With pharmacies closing every 

day and patients being forced into the mail-order program, I believe Congress must act. I believe Congress must give independent 

hometown pharmacies a way to help the patient, a way for pharmacies to negotiate a fair contract, and a way for these local pharmacies to continue to serve their communities and keep America 

healthy. 

Mr. Chairman, this legislation is a cornerstone for the future of 

health care reform, because, without the independent pharmacy 

network, reform will not work. As you know, Mr. Chairman, this 

association, the Association of Community Pharmacy Congressional 

Network, has worked for months on this legislation. And I ask for 

you, the Committee, to move this legislation forward to markup to 

enable passage of this important bill. 

Thank you for your time, Mr. Chairman. I appreciate the opportunity to speak with you. 

[The prepared statement of Mr. James follows:]

PREPARED STATEMENT OF MIKE JAMES

Chairman Conyers, Ranking Members Smith and Keller, and Members of the 

Antitrust Taskforce, good morning and thank you for allowing me to testify this 

morning on behalf of the Association of Community Pharmacies Congressional Network and the independent pharmacies they represent across the country. I would 

also like to thank you for holding this hearing to address a crucial problem in the 

health care system. 

My name is Mike James; I am Vice President and Director of Government Affairs 

for the Association of Community Pharmacies Congressional Network, a practicing 

pharmacist and the owner of an independent, community pharmacy in Raleigh, 

North Carolina. 

Years ago, as managed care began to invade health care in this country, insurance 

companies began to hire Pharmacy Benefit Administrators (known as PBAs) to become electronic claims clearing houses between the insurance company and the 

pharmacies. This was done in an effort to centralize all claims from the thousands 

of pharmacies to a central switch, to then be routed to the correct insurance company. This is a transaction much like a credit card transaction—a central switch, 

an electronic transfer. 

But as managed care became the norm, these PBAs began to realize they could 

become a bigger player in the business of health care and convinced insurance companies, large corporations, and government entities that they were the experts in 

the prescription delivery process. These PBAs sold this idea as a cost-savings mechanism. The Pharmacy Benefit Administrators then became known as Pharmacy 

Benefit Managers (PBMs) and their business model was to manage the entire prescription program and promised as much as 30 to 40% off prescription prices to the 

insurance companies. But these so-called ‘‘savings’’ came at a high price for consumers and pharmacies. 

Back when the Pharmacy Benefit Administrators were used, they handled about 

10% of the prescriptions filled in the US. By 2005, the number of prescriptions being 

handled by PBMs was over 60%. Today, after the implementation of Medicare Part 

D, about 95% of all prescriptions filled in the United States are handled by PBMs. 

17

As a result of this near-monopolistic power, the PBM industry now dictates, without negotiation, reimbursement rates and terms of contracts to independent pharmacies. In order to continue serving their patients, pharmacies are required to fill 

prescriptions under PBM agreements at prices that do not cover costs. This has resulted in the closing of 1,152 independent pharmacies in 2006. Every one of the 

pharmacy owners I have spoken with who has closed their pharmacy since January 

2006 indicated that their reason for closing is low third-party PBM reimbursement. 

The PBM strategy of putting independent pharmacy out of business is working well 

and I believe we will see a larger number of closings in 2007 and 2008 if nothing 

is done. 

The take-over by PBMs is also resulting in movement on a large-scale of senior 

patients—particularly those in rural areas—to mail-order prescription programs. 

This has provided a perverse outcome for patients, who have no say in how their 

pharmacy benefits will be delivered, and are afraid to complain in fear of losing 

their benefit. These patients are denied their traditional right to seek personal and 

confidential professional assistance from local, hometown pharmacy professionals. 

Today, the goal of PBM contracts is not to support critical pharmacy-patient relationships. Rather, the goal of PBM contracts is to systematically undermine the solvency of independent pharmacies and force patients covered under the agreements 

into highly profitable proprietary mail-order programs. PBMs promote mail-order as 

a cheaper alternative to visiting your local pharmacy. However, this is a conflict of 

interest—the PBMs run their own mail-order programs in direct competition with 

retail pharmacies. The argument of cost-savings is completely false—mail order programs won’t necessarily offer a less expensive generic alternative to a medication 

because the PBM has rebate agreements with the brand drug makers. And the mailorder programs can’t possibly fill a script the day it is written—there must still be 

a local pharmacy to fill that script written for antibiotics to cure an infection or a 

painkiller after a broken bone is set. Can those patients mail off the prescription 

and wait another two weeks before it arrives in the mail? 

The mail-order programs run by PBMs are truly a conflict of interest. For example, there is a distinct inequity of forcing patients to pay a higher co-pay in the 

pharmacy for the same prescription than they pay through mail-order. And it is putting patients at a disadvantage by not allowing a local retail pharmacy to fill a 90-

day supply when that same benefit is offered through mail-order. But the PBMs do 

this because they run the mail-order programs and these are effective methods of 

putting retail pharmacy out of business. You will be told that allowing negotiation will increase cost by $29 billion dollars. 

This is strictly a decision of the PBM. PBMs have great flexibility in determining 

how much they shift over to patients and taxpayers. CMS handed over all power 

and authority to PBMs to run Medicare Part D, but rather than be good stewards 

of the taxpayers’ interest, the $29 billion indicates that Charles River Associates 

and the Congressional Budget Office understand well that PBMs will continue to 

put their profits above the interest of the taxpayer. If the cost goes up, it will be 

because the PBMs raised cost, not because the pharmacies were allowed to negotiate. 

You will also be told that surveys show a huge majority of Medicare Part D patients are happy with the program. I would contend this survey didn’t include those 

patients who had entered the ‘‘no coverage zone’’ or ‘‘doughnut hole’’ as it is called. 

I own a pharmacy and I do surveys everyday and everyday I council patients who 

have hit the doughnut hole and have no idea how they are going to buy their medication. They are still paying a monthly premium, the Federal government is still 

paying their monthly allowance to the PMB for that patient and the patient is paying the total cost of the medication and will not escape the doughnut hole before 

the program begins again in January. All this time, the PBM is collecting money 

and paying nothing to help the patient receive their medication. I can assure you 

these patients are not happy with the program. 

Independent pharmacies provide invaluable health care services on a daily basis 

to millions of patients nationwide. They know their patients and their health care 

history. This is especially important for patients who have multiple doctors and prescriptions. The pharmacist is the only health care professional who knows all of the 

patient’s medications, their interactions, and whether there are lower cost generics 

available to address the patient’s needs. 

Hometown pharmacies are the only health care providers who do not require appointments and in many communities, pharmacists are the primary or only health 

care resource for American families. The role of the hometown pharmacist as part 

of the health care team cannot be duplicated through the PBM mail-order process. 

The human interaction with the patient is a vital part of the entire process of the 

delivery of care to the public—this is the fulcrum of the integration of standard of 

18

care for the patient. Patients can’t ask their postman about their medication—not 

everyone can call a 1-800 number and navigate through a directory of options only 

to be put on hold or speak with an operator nor will everyone remember to order 

each of their prescriptions two weeks before they run out—many patients take multiple drugs, especially seniors and those who have serious illnesses. Shouldn’t we 

be taking extra care with them rather than forcing them into faceless mail-order 

programs? 

There is only one way to combat the takeover of your constituents’ health care 

by these huge companies whose only interest is the bottom line, not the health of 

patients. Independent pharmacies must have the right to negotiate to keep these 

PBMs from taking over the prescription delivery system. But antitrust law prohibits 

these small pharmacies from banding together to discuss terms of a contract. If 

Main Street Pharmacy talks to Elm Street Pharmacy about reimbursement rates or 

dispensing fees and agree to turn down the contract from a PBM unless they offer 

a reasonable contract, they are in violation of the law. Currently, these pharmacies 

tend to accept contracts that will put them at a loss because they lead with their 

hearts, not with their business sense. But with pharmacies shutting down every 

day, and the alternative being patients forced into mail order or going to the next 

town to get their prescription filled, I believe Congress must act. When Medicare 

Part D was signed into law, PBMs were given more power, more lives to control—

now almost every American with prescription drug coverage is at the mercy of a 

PBM. I believe Congress must give independent pharmacies the right to negotiate, 

a way to help the patient, a way for pharmacies to negotiate a fair contract, a way 

for these local, hometown pharmacies to continue to serve their communities and 

keep America healthy. 

Mr. Chairman, this legislation is the cornerstone for the future of healthcare reform because without the independent pharmacy network, reform will not work. I 

ask you and this committee to move this legislation forward to mark-up to enable 

passage of this important bill. 

Thank you for this time.

Mr. CONYERS. Thank you, Mr. James. It has been a long time before you could get before the Committee to lay this problem out 

from your perspective and experience. I am so glad that we have 

your full statement to go through the position that you’ve outlined. 

We now turn to the senior associate at Charles River Associates, 

Peter Rankin. Dr. Rankin earned his Ph.D. In economics at Duke 

University. He’s become a leading researcher in health care and 

pharmaceutical industries. His most recent research is focused on 

the influence of Medicare and managed care on the marketplace. 

I apologize for not having looked those articles up, so I don’t 

know what you said, but they certainly are important and are not 

unrelated to what brings us here this morning. 

Welcome, Dr. Rankin. 

TESTIMONY OF PETER J. RANKIN, PRINCIPAL,

CRA INTERNATIONAL 

Mr. RANKIN. Thank you. Good morning, Chairman Conyers, 

Ranking Member Keller and Members of the Task Force. My name 

is Peter Rankin. I am a principal at CRA International, formerly 

known as Charles River Associates, an economics and management 

consulting firm. 

I testify today to raise concerns regarding the economic and potential unintended consequences of H.R. 971. The proposed legislation would provide antitrust exemptions to pharmacies not owned 

or operated by a publicly traded company. Supporters of this bill 

believe that these independent pharmacies need an antitrust exemption because they are at a competitive disadvantage in negotiating contracts with health insurers or pharmacy benefit managers. 

19

My analysis and research leads me to conclude that such a drastic policy change is not warranted. And I will focus on three points. 

First, patients and payers, including Medicare, would bear the 

burden of higher costs. A conservative estimate is that the bill 

would increase expenditures by nearly $30 billion over 5 years, 

nearly a quarter of which would be higher spending on Medicare 

Part D. 

Second, antitrust waivers for independent pharmacies are not 

warranted. 

Third, in general, antitrust waivers are inefficient and threaten 

to raise additional competitive concerns. 

I would like to submit for the record in my written testimony 

CRA’s report on this legislation. 

Mr. CONYERS. Without objection, so ordered. 

Mr. RANKIN. The first concern: Antitrust waivers are expensive. 

Antitrust waivers would allow independent pharmacies to collude 

on pricing and services in negotiations with health insurers and 

PBMs. Considering only the direct cost effects of increases and 

charges, independent pharmacy waivers will increase spending by 

up to $29.6 billion over 5 years, or an increase of up to 11.8 percent, with nearly one-quarter of that amount accruing to Medicare 

Part D plans. 

These costs are likely to be ultimately passed on to Medicare, 

health insurers, employers and patients. As costs increase, patients 

fill fewer prescriptions, and employers will likely scale back, reduce 

or even eliminate health care coverage for their employees. Including consideration of reduced or eliminated access to health care, 

the total costs of independent-pharmacy antitrust exemptions exceed the financial costs estimated by the CRA report. 

The second concern: Antitrust waivers for independent pharmacies are not warranted. There are examples of independent 

pharmacies with economic difficulties. However, antitrust laws are 

not designed to protect individual pharmacies that may be harmed 

by competition, but rather to insure that consumer welfare is maintained with access to pharmacies with reasonable prices and quality. Current antitrust laws provide legitimate mechanisms for 

pharmacies to negotiate with PBMs when such collaboration enhances the quality or efficiency of care to patients. And independent pharmacies already have organizations that can collectively represent their interests. 

The third concern: Antitrust waivers are not effective. The Federal Trade Commission and Department of Justice actively enforce 

the antitrust laws in the health care industry. The regulatory agencies and most economists have regularly dismissed the concept of 

combating perceived competitive imbalances in market power by 

creating countervailing market power. The appropriate response, 

instead, is to determine if there is a legitimate competitive imbalance and to address the economic factors creating that imbalance 

directly. 

Antitrust waivers legalize collusive behavior to create market 

power. Relying on waivers to address perceived competitive imbalances requires continuous adjustment and interference in economic 

markets and runs the risk of spreading competitive imbalance to 

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related markets as the protected entities engage in other lines of 

business. 

In conclusion, antitrust exemptions are drastic and expensive 

tools to address a perceived competitive imbalance between independent pharmacies and PBMs. My analysis leads me to conclude 

that no such competitive imbalance exists in this area. To the extent that prices paid to pharmacies have been reduced, these price 

reductions have benefited consumers. Antitrust exemptions amount 

to a wealth transfer from payers and patients to independent pharmacies of up to $29.6 billion over 5 years. 

I thank you for the opportunity to share some of these concerns 

that I have with H.R. 971. Thank you. 

[The prepared statement of Mr. Rankin follows:]

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PREPARED STATEMENT OF PETER J. RANKIN


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Mr. CONYERS. Thank you very much, Dr. Rankin. 

We really have some wide-ranging testimony here this morning. 

We have a third witness who has a great deal of background. Attorney David Wales is the Deputy Director of the Bureau of Competition at the Federal Trade Commission. He has also served as 

Counsel to the Assistant Attorney General in the Antitrust Division of the Department of Justice. And he has also privately practiced as an antitrust lawyer at Cadwalader, Wickersham & Taft 

and Shearman & Sterling. In other words, he has a long career in 

this area of antitrust. 

And we’re very pleased that you could join us this morning. Welcome to the Committee. 

TESTIMONY OF DAVID WALES, DEPUTY DIRECTOR, BUREAU 

OF COMPETITION, FEDERAL TRADE COMMISSION 

Mr. WALES. Thank you very much, Chairman. It’s a pleasure to 

be here today. 

Chairman Conyers, Ranking Member Keller and Members of the 

Task Force, I am David Wales, deputy director of the Federal 

Trade Commission’s Bureau of Competition. I appreciate the opportunity to appear today to present the Commission’s views on H.R. 

971, the Community Pharmacy Fairness Act of 2007. 

Let me first start by saying that my oral presentation and responses today are my own and do not necessarily reflect the views 

of the Commission or any commissioner. 

Health-care markets are complex and dynamic, and the market 

for pharmacy services is no exception. The Commission is mindful 

of the challenges and economic pressures faced by small drug 

stores brought on by changes in the health care sector. Caring 

pharmacists across the Nation work with dedication to serve the 

needs of patients, and we do not question the sincerity of those 

raising concerns about the quality of patient care. But the solution 

to the concerns raised by pharmacies is not to give them immunity 

from the antitrust rules that guide our economy. 

The Commission is charged with and takes very seriously its obligation to enforce the antitrust laws. And it acts to protect consumers by addressing anticompetitive action in each of the markets 

it reviews, including the markets for pharmacy and pharmacy benefit management services and other vital products and services in 

the health care industry. 

H.R. 971 would create an exemption from the antitrust laws to 

allow to allow pharmacies to engage in collective bargaining to secure higher fees and more favorable contract terms from health 

plans. 

Simply put, the Commission opposes legislation, because the exemption threatens to raise prices to consumers, including for seniors, for much-needed medicine. It also threatens to increase costs 

to both private and employers who provide health care insurance 

to employees, potentially reducing those benefits, and also to the 

Federal Government, which is projected to have paid over 30 percent of the cost of prescription drugs in 2006 alone. Importantly, 

the proposed bill threatens these harms without any assurance of 

higher-quality care for consumers. 

54

At various times since the advent of active antitrust enforcement 

in health care in the 1970’s, health care providers have sought an 

antitrust exemption. In 1998 and 1999, then-Chairman Robert 

Pitofsky testified on behalf of the FTC, opposing similar bills that 

would have applied to all health care professionals. Although those 

bills and others seeking antitrust exemptions have differed in their 

scope or details, they all have sought some form of antitrust immunity for anticompetitive conduct that would tend to raise the prices 

of health care services. 

The Congressional Budget Office concluded, for example, that, if 

enacted, the 1999 exemption bill would significantly increase direct 

spending on pharmaceuticals both by private payers and under 

various Government programs. 

Just this year, the Antitrust Modernization Commission, the 

body enacted by Congress to evaluate the application of our antitrust laws, addressed the subject of antitrust exemptions. The AMC 

urged that Congress exercise caution, pointing out that antitrust 

exemptions typically create economic benefits that flow to a small, 

concentrated group of interested groups, while the costs of these exemptions are widely disbursed, usually passed on to a large population of consumers through higher prices, reduced output, lower 

quality and reduced innovation. 

Accordingly, the AMC recommended such statutory immunities 

be granted rarely and only where proponents have made a clear 

case that exempting otherwise unlawful conduct is necessary to 

satisfy a specific societal goal that trumps the benefit of free-market competition to consumers and the U.S. Economy in general. 

Is the proposed exemption for pharmacies in H.R. 971 one of 

those rare instances in which the societal benefits from dispensing 

with antitrust rules in the normal competitive process exceed the 

costs? In Federal Trade Commission’s view, it is not. The bill would 

immunize price-fixing and boycotts to enforce fee and other contract demands, conduct that would otherwise amount to clear antitrust violations. 

Experience teaches that such conduct can be expected to increase 

health care costs both directly through higher fees paid to pharmacies and less directly by collective obstruction of cost-containment strategies of purchasers. These higher costs would fall on consumers, those employers who purchase pharmaceuticals and other 

products on behalf of their employees, and Government assistance 

programs. Importantly, making prescription drug coverage more 

costly means some Americans will actually have to do without important needed drugs. 

In addition, although H.R. 971 aims to ensure and foster continued patient safety and quality of care, there is no guarantee that 

the proposed exemption would further these goals. Antitrust immunity not only would grant competing stores a powerful weapon to 

obstruct innovative arrangements for the delivery and financing of 

pharmaceuticals, but it also dull competitive pressures that drive 

pharmacies to improve quality and efficiency in order to compete 

more effectively. 

Moreover, nothing in the bill requires that the collective bargaining it authorizes be directed to improving patient safety or 

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quality, rather that merely increasing pharmacies’ revenues from 

payers. 

If Congress concludes the difficulties facing small pharmacies require legislative solution, then one tailored to the specific problem 

is called for, not a sweeping antitrust exemption that may bring 

with it greater harm. 

Again, I appreciate the opportunity to testify before you today. 

And I’d be happy to answer questions. Thank you. 

[The prepared statement of Mr. Wales follows:]

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PREPARED STATEMENT OF DAVID WALES


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Mr. CONYERS. Thank you very, very much, Mr. Wales. Is this 

your personal testimony or——

Mr. WALES. The way I think it works is the written testimony 

was the testimony of the Commission itself. My remarks today, 

though, are my own. 

Mr. CONYERS. Okay. 

Mr. WEINER. When we ask him questions, who is he speaking 

for? 

Mr. CONYERS. Well, it would probably depend on the question. 

Mr. WALES. The questions and the answers I will give will be my 

own. 

Mr. CONYERS. That’s a little unusual arrangement, I just wanted 

to observe, because I didn’t think I was hearing correctly. But your 

testimony is welcomed and appreciated. 

Now we have another antitrust attorney, David Balto, and he is 

testifying on behalf of the National Community Pharmacists Association. He has practiced antitrust law for quite a while, and he’s 

spent a lot of time in the Department of Justice’s Antitrust Division, as well as the Federal Trade Commission. And he currently 

chairs the American Bar Association’s Antitrust Section on Health 

Care Committee. 

We have your testimony, and now we’d like to hear from you. 

TESTIMONY OF DAVID A. BALTO, ANTITRUST ATTORNEY, ON 

BEHALF OF THE NATIONAL COMMUNITY PHARMACISTS ASSOCIATION 

Mr. BALTO. Thank you, Chairman Conyers and Ranking Member 

Keller. It’s a privilege today for me to come before you and testify 

on behalf of the independent pharmacists of the United States and 

the National Community Pharmacists Association. 

When you look at health care antitrust issues, you should ask 

two questions: Who represents the consumer? And who benefits? 

Who represents the consumer in the pharmaceutical distribution 

system? It’s not the insurance companies. They’re there to serve 

the interest of their stockholders. It’s not the employers, for whom 

health care costs is just a line item. It’s the pharmacist: the pharmacist who wakes up the 5 o’clock in the morning to go and deal 

with a claims problem; the pharmacist who answers a question at 

10 o’clock at night; especially the community pharmacist, dedicated 

individuals, many of whom serve underserved areas in the United 

States, rural areas, low-income areas, which just simply aren’t 

profitable for chain pharmacies. 

Who profits? Well, it’s the PBMs and insurance companies that 

are profiting. While they’re making record profits, they’re doing it 

in part by squeezing independent pharmacists to their last ounce 

of survival, driving them from business. 

Now, you passed H.R. 1304, the Campbell-Conyers bill, back 7 

years ago, because you saw it was important for the health care 

provider to be able to voice for itself and for the consumer to have 

a voice in this process. Seven years later, that imbalance you 

sought to redress is far worse. Both the PBM and insurance industries have become vastly more concentrated. PBMs are a type of oligopoly of three firms that basically control the market. They’re 

making record, astronomical profits. 

78

They’re also make a record in something far less glorious: 

They’re creating a record of consumer protection violations. The 

Justice Department and the Coalition of State Attorneys General 

have sued them over and over again to stop these anticonsumer 

practices. That’s another reason why you want to give the independent pharmacists a voice at the bargaining table. 

But let’s be clear about this. The independent pharmacist is 

gagged. It’s gagged by sound economic policy; it’s gagged by an 

antitrust rule, the per se rule against antitrust price fixing, which 

says that if Mr. Dozier and Mr. James dare go and voice things together, that conduct can be illegal under the per se rule. 

The PBMs are smart, and they have expensive lawyers, and they 

use that rule to threaten litigation against the pharmacists to prevent them from acting collectively. Will they win those cases? No. 

No sound court would find those as violations. But the cost of that 

litigation prevents the PBM pharmacies from actually being able to 

voice their concerns at the bargaining table. 

Is an exception warranted under the law? It’s clearly warranted 

under the facts. You want those independent pharmacists to be 

able to speak for you. You want them to speak for themselves. The 

antitrust laws are not perfect, and we don’t want the antitrust laws 

to become the enemy of the good. Basically, what the antitrust laws 

have done is create a sword of Damocles, so that if the independent 

pharmacist voices its concerns, they can be threatened by costly 

antitrust litigation. 

If you look at past precedents of the Congress, you’ll see that 

they’ve acted to create exemptions when the antitrust law prevents 

this type of pro-competitive conduct or creates the need to create 

countervailing power, such as the Capper-Volstead Act exemption. 

Let me close with one last point. Will this be harmful? Not on 

your life. Several months ago, the FTC investigated Rite Aid’s acquisition of records, which gave it more than a 40 percent market 

share in many metropolitan markets in upstate New York. They inquired, could Rite Aid use that 40 percent market power to get a 

better deal from PBMs? Could they extract super-competitive profits? The answer was no, they didn’t do a thing in terms of protecting PBMs. Why? Because 40 percent didn’t matter when you 

were dealing with PBMs. 

If Mr. James or Mr. Dozier or the 20 pharmacists in Florida that 

Mr. Weiner talks about want to get together, they deserve that opportunity to collaborate and innovate. They deserve to have this 

sword of Damocles taken away from them. 

Who speaks for the consumer, Mr. Chairman? The independent 

pharmacist speaks for the consumer. And the independent pharmacist needs this Committee and this Congress to come up and 

speak for them by enacting H.R. 971. 

Thank you. 

[The prepared statement of Mr. Balto follows:]

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PREPARED STATEMENT OF DAVID A. BALTO


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Mr. CONYERS. Thank you so much. 

We now have a pharmacist, the executive director of the Mississippi Independent Pharmacies Association, Mr. Robert Dozier—

Jackson, Mississippi. And he’s become one of the State’s leading advocates for independent pharmacists by ushering in legislation 

through his State, ensuring that pharmacies receive timely reimbursement. 

And we’d like to hear from you now, as our final witness. Welcome. 

TESTIMONY OF ROBERT DOZIER, EXECUTIVE DIRECTOR, 

MISSISSIPPI INDEPENDENT PHARMACISTS ASSOCIATION 

Mr. DOZIER. Good morning, Chairman Conyers, Ranking Member 

Keller and Members of the Committee. My name is Robert Dozier, 

and I am the Executive Director for the Mississippi Independent 

Pharmacies Association. 

The local community pharmacies I represent play a vital role in 

our health care delivery system, but they are being forced out every 

day by unfair business practices by the major pharmacy benefit 

managers and the Medicare Part D plans. This is the very reason 

why the Mississippi Independent Pharmacies Association was 

formed and why I am before you today at this hearing. 

Independent pharmacists are one of the most trusted professions 

of this country and are the only health care provider that gives 

free, no-appointment-necessary, trusted care. These pharmacists 

pride themselves on being able to serve their patients and communities with the highest service. Most independent pharmacies provide 24-hour emergency care, such as helping a mother with a sick 

child in the middle of the night. Nearly all independent pharmacies 

provide delivery services to their patients, despite rising fuel costs 

in today’s markets. 

To give you an example about the service independent pharmacies provide to the community, Ms. Jane Paschall from Holly 

Springs, Mississippi, stated in February of 2006 that she was sick 

and could not drive to town to pick up her medication, so her local 

independent pharmacist, Bob Lomenick, delivered her medication 

free of charge, placed her trash out by the road, and when he arrived he even brought her a milkshake from his local pharmacy. 

Ms. Paschall stated later that she would’ve never received that 

kind of service from anybody but an independent pharmacist. I 

might add that Bob Lomenick performed all of these services in the 

middle of an ice storm that was passing through north Mississippi. 

In the aftermath of Hurricane Katrina, we saw what independent pharmacists were really made of, when the majority of 

health care institutions and facilities had been destroyed by the 

storm. The independent pharmacists of the Mississippi Gulf Coast 

who had survived the storm opened their pharmacies the day after 

the storm, despite having no electricity or modern conveniences, so 

they could provide for their patients and survivors of the worst natural disaster this Nation has ever witnessed. 

Independent pharmacist John McKinney in Moss Point, Mississippi, worked alongside with Dr. Sid Ross, who was working 

from the pharmacy because his office was destroyed, providing care 

and medication to the people of the Gulf Coast. Mr. McKinney 

116

made sure that anybody who could produce a medication list or 

bottles with proper ID received their medication, as long as the 

medication was not a controlled drug. Mr. McKinney and other 

community pharmacists on the Gulf Coast provided these survivors 

with their medication with little or no hope of being reimbursed for 

the products or their services. They provided these survivors with 

their medication not for the payment or low reimbursement that all 

independent pharmacists are seeing today, but they provided the 

medication because it was the right thing to do. 

If it were not for these independent pharmacists, the Gulf Coast 

and the rest of Mississippi might have seen a major health care 

disaster. When hospitals, local clinics, chain pharmacies and even 

Kessler Air Force Base were closed, these local pharmacists rose to 

the top to provide patient care and service in the time of need of 

their local communities. 

You simply cannot receive that kind of treatment and patient 

care from a mail-order company. I know this from personal experience, because my father had to evacuate his home in New Orleans 

due to the storm and he is a mail-order patient. My father is a 

mail-order patient not by choice, but because his insurance company’s PBM has forced him to receive his diabetic medications 

through the mail. He is one of the many refugees from the storm 

that had problems receiving their medication, but Bill Mosby, a 

community pharmacist from Canton, Mississippi, helped my father 

get his medication when he was unable to get it from the mailorder company. 

It only strengthens my belief in the role of our country’s independent pharmacists when I think of what could have happened to 

my father and other patients if they were not able to receive their 

medications. 

I want to point out that the small business of independent pharmacy is unique in that it has little control over the cost paid for 

a product or control over the price set to sell the product. Yet, when 

it comes to squeeze savings from the system in this escalating-cost 

environment, both State and Federal Government turn to pharmacy as if they had control over pricing. 

Almost all of the medications that pharmacies dispense are paid 

by third parties, thanks in part to Medicare Part D benefit that our 

Government approved a few years ago. But the small, independent 

pharmacists have no voice in the agreements for reimbursement for 

the Part D plans, and they are facing smaller margins, low to no 

profit, and greater debt. 

Members of Congress may believe pharmacies can absorb these 

losses and go on. Many people do not understand business operations or the term ‘‘gross margin.’’ It is very simple: If a pharmacist 

buys a medication for $100 and gets reimbursed $85, then has to 

wait 6 weeks to be paid, it is just a matter of time before he will 

have to close his pharmacy. There’s no gross margin. 

The PBMs have reduced payments in a severe fashion. This is 

an inequity which needs your attention today. A small business of 

any type cannot continue to operate if the revenue coming in does 

not at least match the cost of the product being sold and the overhead needed to serve the consumer. 

[The prepared statement of Mr. Dozier follows:]

117

PREPARED STATEMENT OF ROBERT DOZIER

Good morning Chairman Conyers, Ranking Member Keller, and Members of the 

Antitrust Taskforce. My name is Robert Dozier and I am the Executive Director for 

the Mississippi Independent Pharmacies Association. The local community pharmacies I represent play a vital role in our healthcare delivery system—but they are 

being forced out of business every day by unfair business practices by the major 

Pharmacy Benefits Managers and Medicare Part D Plans. This is the very reason 

why the Mississippi Independent Pharmacies Association was formed and why I am 

before you today at this hearing. 

Independent pharmacists are one of the most trusted professions of this country 

and are the only health care provider that gives free, no appointment necessary, 

trusted care. These pharmacists pride themselves on being able to serve their patients and communities with the highest service. Most independent pharmacies provide 24 hour emergency care, such as helping a mother with a sick child in the middle of the night. Nearly all independent pharmacies provide delivery services to 

their patients despite rising fuel cost in today’s markets. To give you an example 

about the service the independent pharmacists provide to the community, Ms. Jane 

Paschall from Holly Springs, MS, stated that in February 2006 she was sick and 

could not drive to town to pick up her medication, so her local independent pharmacist Bob Lomenick delivered her medication free of charge, placed her trash out 

by the road when he arrived and even brought her a milkshake from his local pharmacy. Ms. Paschall stated later that she would have never received that kind of 

service from anybody but an independent pharmacist. I might add that Bob 

Lomenick preformed all of these services in the middle of an ice storm that was 

passing through North Mississippi. 

In the aftermath of Hurricane Katrina, we saw what independent pharmacists 

were really made of when the majority of the healthcare institutions and facilities 

had been destroyed by the storm. The independent pharmacists of the Mississippi 

Gulf Coast who had survived the storm opened their pharmacies the day after the 

storm despite having no electricity or modern conveniences so they could provide for 

their patients and the survivors of the worst natural disaster this nation has ever 

witnessed. Independent pharmacist John McKinney of Burnham-McKinney Pharmacy in Moss Point, MS, worked along side with Dr. Sid Ross, who was working 

from the pharmacy because his office was destroyed, provided care and medication 

to many of the people on the Gulf Coast. Mr. McKinney made sure that anybody 

who could produce a medication list or bottles with proper ID received their medication as long as that medication was not a controlled drug. Mr. McKinney and other 

community pharmacists on the Gulf Coast provided these survivors with their medication with little or no hope of being reimbursed for the products or their services. 

They provided these survivors with their medication not for the payment or the low 

reimbursement that all independent pharmacists are seeing today, but they provided the medication because it was the right thing to do. 

If it were not for these independent pharmacists, the Gulf Coast and the rest of 

Mississippi might have seen a major healthcare disaster. When the hospitals, local 

clinics, chain pharmacies, and even Kessler Air Force Base were closed, these local 

pharmacists rose to the top to provide patient care and service in the time of need 

for their communities. 

You simply can not receive that kind of treatment and patient care from a mailorder company. I know this from personal experience because my father had to evacuate his home in New Orleans due to the storm and he is a mail-order patient. My 

father is a mail-order patient not by choice but because his insurance company’s 

PBM has forced him to receive his diabetic medications through the mail. He was 

one of the many refugees from the storm that had problems receiving his medications, but Bill Mosby, a community pharmacist from Canton, MS, helped my father 

get his medication when he was unable to get it from the mail-order company. It 

only strengthens my belief in the role of our country’s independent pharmacists 

when I think of what could have happened to my father and other patients if they 

were not able to receive their medications. 

I want to point out that the small business of independent pharmacy is unique 

in that it has little control over the cost paid for a product or control over the price 

set to sell the product. Yet, when it comes time to squeeze savings from the system 

in this escalating cost environment, both State and Federal government turn to 

pharmacy as if they had full control over pricing. Almost all of the medications that 

pharmacies dispense are paid by third parties—thanks in part to the Medicare Part 

D benefit that our government approved a few years ago. But the small, independent pharmacies have no voice in the agreements for reimbursement for the Part 

D plans, and they are facing smaller margins, low to no profits, and greater debt. 

118

Members of Congress may believe pharmacies can absorb these losses and go on. 

Many people do not understand business operations and or the term ‘‘gross margin.’’ 

It is very simple: if a pharmacist buys a medication for $100 and gets reimbursed 

$85, then has to wait 6 weeks to be paid, it is just a matter of time before he will 

have to close his pharmacy. There is no gross margin. The PBMs have reduced payments, in a severe fashion. This is an inequity which needs your attention today. 

A small business of any type cannot continue to operate if the revenue coming in 

does not at least match the cost of the product being sold and the overhead needed 

to serve the consumer. 

This is a blow to small business, but devastating to those patients served by these 

small businesses. Pharmacists across the nation are agonizing over the thought of 

not being able to serve their patients. And those patients will be distraught over 

the thought of losing their pharmacies. Members of Congress may not believe access 

is a problem because they see multiple pharmacies at the same intersection in larger cities. Mississippi is a prime example of rural America, a state that has eleven 

counties with only one pharmacy and one county that has NO pharmacy at all. 

These patients understand what it will mean to their health care if that pharmacy 

disappears—they could easily be 30–40 miles away form the next closest pharmacy. 

Independent pharmacies across the state of Mississippi and the United States are 

a key component of the healthcare delivery system, but they are facing extinction 

due to the unfair business practices of the major Pharmacy Benefit Managers and 

Medicare Part D Plans. You can see from my earlier statements how important 

these small businesses are to our communities. Without the ability to truly negotiate with the PBMs, independent pharmacy will become a thing of the past and 

our healthcare system in this country will truly be broken beyond the point of fixing. We will never be able to replace the face-to-face patient counseling that community pharmacists provide on a daily basis to all of their patients. There will not be 

the same care from a mail-order company that we see from an Independent Pharmacist. 

Once again, I would like to thank you for your time and I urge that the committee 

schedule a markup of HR 971 and bring the bill to the floor in order to keep this 

key component of our health care system in place.

Mr. CONYERS. I thank you, Mr. Dozier. 

And I thank all of the witnesses. This has been fascinating. 

I’ve got to go back and find out what happened to Campbell-Conyers over a half-dozen years ago. 

Mr. Dozier, you’ve put a huge burden on my local pharmacist, because I don’t get that kind of service. And I’m going to tell everybody, all the local guys in the Detroit area, you know, what may 

be pretty extraordinary service here. 

But, you know, you five have listened to myself, Mr. Keller, Mr. 

Weiner, Darrell Issa. And each of you listened to four other witnesses. 

So I want to just ask you, if we were sitting around whatever it 

would be in Mississippi, maybe the Cracker Barrel—we’re just 

talking about this now. Forget the fact that you’re in a Federal situation where your testimony is reviewed for its accuracy. 

But let me ask you, Mr. Dozier, of all the things you heard here 

this morning from all the rest of us, what is on your mind? What 

are you thinking about, in terms of the great variety and scope of 

analysis that’s happened here this morning already on this subject? 

Mr. DOZIER. Well, my personal feeling is, listening to everybody’s 

testimony and some questions from you all, that there is an urgency that we need to save independent pharmacy in this country 

of ours. 

The gentleman earlier testified that this would run the program 

up; it would cost $29.6 billion. Personally, myself, I have a hard 

time believing that. If we do not save independent pharmacy, it 

will probably cost us $29 billion, because we will see a problem 

with pharmacy provider access, and therefore you will see hosVerDate 0ct 09 2002 12:20 Jul 09, 2008 Jkt 000000 PO 00000 Frm 00122 Fmt 6633 Sfmt 6601 H:\WORK\ATRUST2\101807\38336.000 HJUD1 PsN: 38336
119

pitalization rates increase because the pharmacist was not there to 

take care of those patients in those communities. 

For example, there have been already 18 to 20 pharmacies, independent pharmacies, to close in the State of Mississippi, from January 1st to the end of August, and that came from the State Board 

of Pharmacy. There are 11 counties in the State of Mississippi 

which only have one pharmacy, and that happens to be an independent pharmacy. In the State of Mississippi, if pharmacies continue to close, you will see a major health care disaster because the 

accessibility to the pharmacy will not be there. 

And as we’re going out of business, the PBMs and the Medicare 

Part D plans are making huge profits, obscene profits. And, ladies 

and gentlemen, Mr. Chairman, we have to remember this: It’s 

about the care of patient. 

And the pharmacists are the ones who take care of the patients. 

The PBMs and the Medicare Part D plans are only concerned about 

one thing and one thing only: profit, profit and profit. 

Mr. CONYERS. Thank you very much. 

Dr. Rankin, could I ask you for your impression of the various 

positions that have been put forward that you hear among the 

members of the panel and your fellow witnesses? 

Mr. RANKIN. Certainly, Chairman. 

I think it’s certainly true that there is a remarkable tension 

among the different testimony you’ve heard. And I think one of the 

commonalities that you hear or at least one issue that, perhaps, is 

not disputed is that there is a role, and there is a value to independent pharmacies. The frustration is that there are some pharmacies that are closing, and yet, the economic factors or at least 

the cause for this points to, according to advocates for the bill, to 

PBMs. 

And so, on the other side of the tension, you have the economic 

analysis of the PBM industry, which repeatedly shows that it is 

considered to be a highly competitive industry. When PBMs interact with plan sponsors—those are health insurers and employer 

groups—there is quite an intricate bidding system that has, over 

time, become incredibly efficient and has allowed plan sponsors to 

define the terms and get very good deals, at least in terms of the 

sharpened-pencil point, in structuring deals with PBMs. 

And so the tension, to me, seems really to be one of, if having 

the services provided by independent pharmacies is one of value 

and is one that Congress wants to value not necessarily on economic grounds but because it values the services offered by independent pharmacies, there is no role for antitrust exemptions. The 

PBMs are competitive and have repeatedly demonstrated to be so. 

And I worry, frankly, about the after-effects of granting exemptions 

to independent pharmacies. 

Mr. CONYERS. Thank you very much. 

Mr. Mike James, in sorting out all of these varied opinions and 

pronouncements, what is the major thing that is impressing you 

this morning? 

Mr. JAMES. Mr. Chairman, as you and I have talked before, as 

a pharmacist, my main concern in all of this is the health care of 

the patient. We’ve always said that the personal relationship of the 

independent pharmacist is the best cost-containment program 

120

there is, because that pharmacist knows what’s going on with the 

patient. They know what their process is, they know their health 

care, they know their history. 

The problem that I have with what I’m seeing today is that the 

health care, which is what we are here before the Judiciary Committee today about, is the fact that we’re seeing less and less 

health care being administered to that patient. 

I mean, I think about that patient who would walks into my 

pharmacy who is on Medicare Part D. She has fallen into the donut 

hole, and she has no way to buy her insulin. It is a true fact. I can 

give you the lady’s name. This is not a hypothetical case. 

The process we have here is a program that, when it was first 

announced, seniors said, ‘‘Oh, what a great program this is going 

to be.’’ They just, unfortunately, didn’t know the details of the program. They surely found those out as they found themselves within 

the program. 

The problem we have today is there are so many dollars being 

taken out of this program that could be retained in the program 

and eliminate the donut hole. There are ways to do that. You know, 

I believe there are programs out there, there are plans out there 

that we can put together to do that very thing. 

It’s easy for us to sit in this room today and talk about the patients who can’t pay for their medication. I can assure you, as you 

stand in your pharmacy and that patient is in front of you trying 

to figure out how they are going to get their medication, it is a 

whole different emotional level of what’s going on. And we face that 

as pharmacists every day, and we work every day to try to help 

those patients find a way to get their medications. 

It is a very difficult situation. It’s a situation that exists that 

shouldn’t exist, and that is what we are talking about this morning. 

Mr. CONYERS. Thank you very much. 

Mr. Wales, what impresses you most about the wide variety of 

opinions you heard this morning? 

Mr. WALES. I would be happy to answer that. 

Let me start off by saying that I think we are sympathetic to 

some of the issues that have been pointed out, in terms of some of 

the shortcomings with respect to our health care policy in the U.S. 

I, personally, grew up in a pretty small community in upstate 

New York. In fact, I’ve seen some of the challenges that are faced 

by communities in terms of not only pharmacy services but doctor 

services. And so I think—let me start by saying that I think we realize that there are some real challenges there. 

I think the problem is that we really don’t think a broad, you 

know, kind of antitrust exemption that would apply across markets 

and apply in different circumstances is the right answer to some 

of those problems. 

There are certain things we do know. We have seen collective 

bargaining by health care professionals that has really had a negative impact on American consumers. It has driven the prices up of 

health care services. We’ve seen pharmacists who, I think—you 

know, I really do think we do appreciate them. There are a lot of 

great pharmacists out there. Unfortunately, there are some bad apples who have been out there, you know, with the goal of increasVerDate 0ct 09 2002 12:20 Jul 09, 2008 Jkt 000000 PO 00000 Frm 00124 Fmt 6633 Sfmt 6601 H:\WORK\ATRUST2\101807\38336.000 HJUD1 PsN: 38336
121

ing compensation, really, untied to quality-of-care issues. And so I 

think the problem is that we really do believe in the benefits of 

competition in those markets, and we have seen some of the real 

downsides to consumers when that competition is taken away. 

In essence, I think there are some, really, more narrow qualityof-care issues that are raised by this panel. And I think, you know, 

hopefully, the challenge is trying to focus on those without a broader antitrust immunity that goes into areas that we think have unintended consequences and will actually harm consumers. 

Mr. CONYERS. Thank you. 

Attorney Balto, your view? 

Mr. BALTO. Thank you, Mr. Chairman. 

You know, let me start off with H.R. 1304. 

By the way, last night, I got to talk to Congressman Campbell, 

and he sends you and the Committee his regards. He is having fun 

running the Haas School of Business. 

He wanted me to say, look, the Congress had enacted the Sherman Act. You know, go back to that sword of Damocles. They saw 

the antitrust laws not as a sword for the PBMs to use, for the big 

insurance companies, for the big intermediaries to use to bully 

small producers, but, rather, as a shield to protect those small producers from the anticompetitive activity of those large intermediaries. 

That’s why you’ve acted prudently to pass exemptions, for example, the Standards Development Organization Act or other exemptions that have been passed that are mentioned in my testimony, 

to go and clarify the law and protect small producers. 

Let’s go back to H.R. 1304. There are people who said H.R. 1304 

shouldn’t be enacted. They said, ‘‘Wait. Let the antitrust laws 

work. If the problem is that the insurers and PBMs are too big, we 

will go and stop them from becoming bigger.’’ Well, what’s happened in the last 7 years, and with due deference to my good friend 

Mr. Wales, the FTC and the Justice Department haven’t stepped 

up to the plate. They haven’t challenged any PBM mergers. They 

didn’t issue a second request in the CVS-Caremark merger. They 

only did a quick, brief look at the Caremark-Advance PCS merger. 

By the way, based on that, they issued a statement saying the 

market is competitive. If you take just a quick look at things, I 

don’t think you can really assess whether or not it’s competitive. 

The result is there are three dominant PBMs, and they use ‘‘take 

it or leave it’’ offers. You know, they just basically impose ‘‘take it 

or leave it’’ offers. 

It’s important for you to realize when you consider these issues, 

when Mr. Rankin mentions economic grounds or Mr. Wales mentions economic grounds, we’re not talking about the production of 

ice cream, we’re not talking about the production of tires; we’re 

talking about health care. 

It is in the interest of somebody who has monopsony power to 

underbuy, to undersupply the market. When you have that power, 

you want to drive production down. And what that means is that, 

when I, as an individual, want to go and have my prescription 

filled, Mr. Dozier’s out of business. There is no place for me to go. 

It means that I can only get my service under mail-order, and 

that’s a cumbersome and often bad process. 

122

Now, we’ve spoken a lot about the profits of the PBM industry, 

and I don’t deny anybody the ability to secure profits, but what do 

the profits tell you? They tell you the same thing, Mr. Chairman, 

that they told you when you had the oil companies in here. Those 

astronomical profits mean those firms have market power. These 

independent pharmacists, they don’t have market power. Rite Aid 

is acquiring Eckerd’s. They don’t have market power. But if somebody is making those astronomical profits, that suggests they have 

market power. 

And how do they use that market power? They use it to harm 

consumers. They engage in a tremendous number of exploitative 

practices, which my testimony has an appendix of all of the cases 

that have been brought against the PBMs. They have had to pay, 

so far, over $300 million in damages. 

Let me stop with one final comment about mail-order. And I do 

not want to get into a debate over here, but I spend 60 percent of 

my time representing consumer groups—Consumers Union, Families USA and USPIRG—and they do not like mail-order. We don’t 

like mail-order. It may appear to save the employer money. It may 

be a rich source of profits for PBMs. But ultimately, it leads to 

worse patient care. Ultimately, it leads to worse health outcomes. 

The better system, the preferable system, is empowering the 

community pharmacists, allowing them to do 90-day scripts, allowing them to provide the high-quality service that consumers need. 

Otherwise, you will wake up 5 years from now, Mr. Chairman, having to fill a prescription, and you’re going to have to pick up a 

phone and call some pharmacist in Thailand, who works for a 

PBM, who will be trying to answer your questions about—you 

know, instead of being able to go to your neighborhood community 

pharmacist. That’s why this legislation is necessary. 

Mr. CONYERS. Well, thank you for your measured predictions of 

what is going to happen in the future. 

I now turn to the author of the legislation which has brought us 

together, the gentleman from New York, Mr. Anthony Weiner. 

Mr. WEINER. Thank you, Mr. Chairman. 

And I thank the panel. It has been enlightening. 

Mr. Rankin, who paid CRA International for this study? 

Mr. RANKIN. This study was commissioned by PCMA. 

Mr. WEINER. What is PCMA? 

Mr. RANKIN. It is the trade organization representing PBMs. 

Mr. WEINER. In your estimate of the cost of this $29.6 billion, according to your models, how much of that would be absorbed by a 

PBM’s bottom line? 

Mr. RANKIN. The model does not predict an exact number. If you 

read the report, what it says is $29.6 billion over 5 years. And 

based upon the recognition of competition in the PBM industry, the 

expectation is that most of that would be passed through to plan 

sponsors. 

Mr. WEINER. Well, I see cost-simulation scenarios that go into 

great questions about elasticity, where it would lie, the total incremental gross margin increases for TPP prescriptions. Nowhere 

could you—no modeling could calculate, given that there is a limit 

on how much is going to PBMs by the Government—so you should 

be able to recognize that some of it would be absorbed in different 

123

points along the consumer stream. You can’t in any way estimate 

how much of that would be absorbed by PBMs? 

Mr. RANKIN. The estimate that you are looking for really depends 

on how plan sponsors interact with their PBMs. 

Mr. WEINER. I would agree with that. 

Could it be that $29.6 billion in your study, since you don’t model 

it to see where that will be distributed—to taxpayers in the form 

of Medicare payments, to pharmaceutical companies themselves, or 

to consumers—could it be that PBMs would absorb all of it? 

Mr. RANKIN. No. 

Mr. WEINER. Tell me why. 

Mr. RANKIN. Because PBMs compete vigorously for services provided to plan sponsors. 

Mr. WEINER. PBMs, in their creation, were created in order to 

take the amount of money that Government was allocating for the 

drugs and to process all of the various people trying to get the 

drugs, in a way, to save money. 

Now, if we create this and there is increased competition and 

PBMs are going to have to pay out or they’re going to have to pay 

more to pharmacists, why could it not just be, since PBMs can’t go 

to Government and say, ‘‘Give us more money,’’ that PBMs will 

have to absorb it? 

Mr. RANKIN. There’s nothing to absorb, is the point. When plan 

sponsors interact with PBMs, they provide very detailed RFPs. 

These are specific categories of services that need to be provided 

by the PBMs. They engage, typically, in at least two rounds of bidding, in which PBMs provide full documentation. And during this 

process, plan sponsors usually retain benefit consultants who serve 

this role over a number of negotiations and develop a familiarity 

with both the tools and the methods employed by PBMs——

Mr. WEINER. Let me just interrupt you for a second. You have 

calculated, under your contract with PBMs to do research, you 

have calculated a number that is exquisite in its precision, $29.6 

billion. A classic tool of consultants, to make it seem like it is a 

precise estimate. You make it $29.6 billion rather than $30 billion. 

Hey, well, that gives it a certain intellectual heft, I guess, but I 

have asked you whether you modeled to figure out where in the 

consumer stream that you broadly say that it can go to—consumers 

or it can be returned to Medicare. And nowhere is there anywhere 

in the modeling as to what percentage of it that just the PBMs will 

have to take since they’re now facing another organized group, 

competing together to negotiate for lower prices, just like Rite Aid 

or Eckerd’s or anyone else. Nowhere is it characterized in here how 

much the PBMs would absorb. 

And I think the reason that it’s not characterized that way is because there’s a chance that it can be $1 of it. I mean, you say none 

of it. I find that hard to believe. It could be $1 of it. 

Theoretically, let us assume for a moment independent pharmacies are able to organize. By your own definition, they are getting $29.6 billion of additional reimbursements for the drugs that 

they’re selling. Well, that cost could, absent any other information 

to the contrary in your study, be absorbed by PBMs. 

Mr. Wales—certainly, go ahead, Mr. Rankin. 

124

Mr. RANKIN. Everything you say is contrary to economic theory, 

to the statements of the FTC and to the economic research we have 

done. 

Mr. WEINER. Well, we’re going to get to the FTC in a moment. 

Mr. Rankin, you had an opportunity——

Mr. RANKIN. Yes. 

Mr. WEINER [continuing]. To model this. For example, if I asked 

you now—assume for a moment that the Federal Government 

wanted to model it so that all of it, all of the additional costs, 

would be absorbed by the PBMs. 

I can think not—you know, being a Member of the Energy and 

Commerce Committee, I would probably take about 25 minutes to 

how I would write that bill. I would say that the PBMs are going 

to get X number of dollars for a drug. That is going to be our reimbursement rate to the PBM. You then have to go out and negotiate 

your prices with your Rite Aids, your Eckerds and these independent pharmacies, and whatever price you get, if it is not $10 

like it was yesterday and if it turns out to be $9 because of tougher 

competition, it is $1 out of your employer’s hide. 

So I can say 100 percent of it comes from the PBMs, couldn’t I? 

Thank you, Mr. Rankin. 

Mr. Wales, let me ask you a question on your testimony. You are 

correct to point to the AMC, the Antitrust Modernization Act. And 

you point to, I guess, the salient line, that ‘‘Exemptions should be 

necessary’’—this is quoting from your testimony, which is from the 

Act—‘‘necessary to satisfy a specific societal goal that trumps the 

benefit of a free market to consumers and the U.S. economy in general.’’

And that is not only the statement of Congress, but it’s intuitive 

that you want to be able to make sure that a goal is advanced. Obviously, the uncontested goal here—I don’t see anyone arguing that 

having fewer community pharmacists is a societal goal. You want 

more competition by just about any model. No matter who is paying the bills, you want to have competition, you want to have employers and people to have a choice. Your hometown does not benefit by having less competition. It benefits by having more. So it’s 

intuitive that what we’re trying to do here is to have more competition, which is the societal goal we’re trying to pursue. 

The thing that the FTC doesn’t realize—and, frankly, it weaves 

in and out of this fact in its various actions—this is not a free market, is it? I mean, for 90 percent of seniors, they do not have the 

opportunity to go out and say, for example, ‘‘I do not want to get 

Lipitor. I don’t like that—I don’t like that drug. My blood pressure 

is—I’m going to go to something else. I’m going to go out, and instead of getting Lipitor, I am going to go out and shop for five or 

six or seven other drugs. I’m going to go compare notes, and I’m 

going to decide for myself.’’

This is not a classic free market because consumers don’t have 

the expertise, the experience or the choices. Elsewhere in this Committee, we have decided that a pharmaceutical company is going to 

have an uncontested right to sell that drug and only that drug for 

a certain period of time. So this is not a free market. We’re not 

going in and deciding which car you’re going to buy. We’re going 

in and taking a marketplace that is hyperregulated and 

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hypercontrolled—and extraordinary powers are vested with the 

person who controls that drug, whether it controls it at the manufacturer or it controls it at the PBM. We consumers aren’t going 

in and taking a free market and making it an unfree market. We’re 

taking a very, very hyperregulated market and trying to broaden 

choice for people. 

So you have to, in your analysis, look at the idea that you’re not 

looking at a classic free market, and you’re certainly not looking at 

a market as it relates to Medicare Part D. With Medicare Part D, 

neither the PBMs nor anyone else can go and say to the Government, ‘‘We are going to say whatever we want for this price.’’ They 

agree that if you’re going to be in the program, that you’re going 

to have to pay for it. 

And I would just point out one other thing. In your testimony, 

you expressed concern that if my legislation is passed that it takes 

away the incentive for greater service. Well, I would say to you, my 

friend, even with the advantage of being able to join together, the 

only way a neighborhood pharmacist can compete against the Rite 

Aids is based on service. And I think the record will show today—

and you may even want to stipulate to this—that neighborhood 

pharmacies today survive based on the service of Mr. Dozier. You 

know, that’s the only edge that they have, is they’ve got to hustle 

and hustle and hustle. But you can hustle all you want; if you’re 

paying $50 for a drug and the Eckerd down the street is paying 

$25 for a drug, you aren’t reaching that place. 

And so, sometimes the antitrust laws are used, or the ability for 

people to negotiate as a group is a way to do so in a minimally 

invasive way, rather than going and manipulating the economy. It’s 

a minimally invasive way to say, ‘‘Let’s figure out a way to try to 

let these different sides compete.’’

I see no scenario where allowing this to happen reduces the numbers of players in the marketplace. I just can’t figure that out. 

There’s no way a handful of guys in Mississippi are going to drive 

Wal-Mart out of business. I don’t see any real way that a bunch 

of guys in New York are going to drive Rite Aid out of business. 

So, if you game this out, you are going to have a furtherance of 

the societal goal, more community pharmacists surviving, a furtherance of the societal goal of having more competition based on 

service—because nothing is going to make Rite Aid improve their 

service if they’re not going to have the neighborhood community 

pharmacist to compete with—you’d have more competition in this 

controlled marketplace, so you don’t have this pure free-market 

thing; you have more people that are going to be competing. 

And let me just say, finally—because I’m giving you a lot, and 

I do want you to respond because you’re not on any PBM’s payroll, 

so I am interested in your viewpoint as an economic theorist in this 

case. In no way is it clear who it’s going to drive up the cost to. 

In my exchange with Mr. Rankin, he says, absolutely, it’s going to 

drive it up to everyone but to my bosses. You know, you might 

have a different view. Tell me. 

If I wanted to craft this and you said it should be limited and 

we should try to figure out a way to craft it—if I wanted to try to 

craft this in a way that the PBMs had to absorb the cost, how 

would you recommend I do it? 

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Mr. WALES. Let me figure where to start. 

Mr. WEINER. Go ahead. I have asked a lot of questions here. 

Take your time. 

Mr. WALES. I’ll do my best, and I’m sure there will be ones that 

I miss that you’ll hopefully bring me back to. 

Just to kind of start at the fundamental concept, I think that, 

certainly, no one is going to argue that these markets are operating 

in a perfectly competitive manner. I think there are very few markets in the U.S. that do that. 

I think there is also no question that there are some legitimate 

concerns, in terms of some of the issues that some of the independent pharmacies are facing in the market. Certainly, all things 

being equal, more competition is better, and certainly, more competition from independents is better. 

I think this bill does something very different, in the sense that 

it takes what we think is very important, in terms of the competition that is existing—and it may not be perfect, but there is no 

doubt, I think, that there is competition going on between the independents, between the chains—CVS and Wal-Mart and Walgreen’s 

are all competing—and that consumers benefit from that competition. 

I think the issue we have with the bill is that it goes and takes 

these issues, which, I think, are more narrow issues, and it applies 

it across the board in situations where, you know, there may not 

be inequities in bargaining power. Certainly, there are examples 

where there are inequities. 

I think the problem is that this bill applies across the board in 

areas where doctors and pharmacists may have more leverage, and 

there may be communities right now where pharmacists really do 

have a lot of bargaining power against the payers and the PBMs, 

because they are the only game in town. Certainly, that is a possibility. You know, maybe that is a minority of the markets, but certainly that is a complication. I think it is a concern that this bill 

does not take into consideration and, across the board, removes 

competition, which we think is vitally important in terms of protecting consumer interests and advancing the things——

Mr. WEINER. If I can stop you, explain to me that part. Where 

would it remove competition? Tell me how. Can you just kind of 

game it out for me? 

Let’s assume you have a community that has one community 

pharmacist and no Eckerd’s anywhere, and that guy forms into a 

consortium. You’re saying there, in that case, if it doesn’t end competition, you’re still going to have—I mean, I understand there is 

still competition that exists——

Mr. WALES. Maybe let me go through, and jump in, I guess, if 

I’m not hitting the point. 

I think the way you would look at it is that, when you remove 

the protections of the antitrust laws, that allows people to price, 

that allows them to collectively bargain against PBMs and against 

the payers. I think what we find is that, ultimately—and maybe 

that is the goal of the legislation, is it raises the reimbursement 

rates for pharmacists. 

What happens is—and this gets into, kind of, what happens after 

that point—what then happens is that, since this is such a large 

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input into the PBMs’ product that they offer to their customers and 

then that the payers offer to employers—and I think we kind of 

agree with the idea that basic economics suggests—and this came 

up in the 1998 and 1999 test by Chairman Pitofsky—inevitably, 

you typically do see an increase in the downstream product, and so 

people are going to pay more for their medicines and for their 

drugs here. I think that’s the fundamental issue that we see here. 

Beyond that, I mean, it’s not like we’re talking about a theoretical exercise here. We have specific enforcement actions we’ve 

taken where the exact same scenario that this bill is going to create has happened, where people have violated the law and have 

gotten together and have colluded in ways and have price-fixed and 

have boycotted PBMs and payers. That has had a really negative 

impact, increasing reimbursements by 22 percent and up to 60 percent. 

Mr. WEINER. Right. Maybe this will help us perfect the bill. If 

the bill said, we will suspend antitrust only for the purposes of 

forming into associations for the purpose of negotiating with PBMs, 

that that is the sole purpose, would you be satisfied that it would 

make it impossible to—that you could not price-fix and that you’d 

still have to get the PBM to agree? You’re still a tiny—and I’m sure 

you know this from the testimony—you’re still a tiny percentage of 

the overall marketplace, compared to the bigger chain stores. 

If it were limited just for those purposes, just for the purposes 

of negotiating deals on pharmaceutical drugs, would that help allay 

some of your concerns? 

Mr. WALES. I don’t think it would. The problem is—and I think 

for the bill, really, to have an impact—I mean, I think that this is 

really not open to debate, that the plan of the bill is to allow pharmacists to get larger reimbursements. So, if you’re getting together 

and collectively negotiating, you have to have some market power 

to do that. 

You know, Mr. Balto had suggested that there are a lot of instances where independent pharmacists don’t have that market 

power. But if that’s the case, then what does this bill do for you? 

If you can’t negotiate and have some leverage with the PBMs, they 

can go to somebody else, right? 

Mr. WEINER. Mr. Wales, you’ve asked an excellent question. We 

sometimes have the tendency here, when we debate bills, to wildly 

overstate and wildly understate the effect of the bill. You know, it 

could well be that the influence might be more in some places and 

less in some places. It might be nothing. PBMs are so extraordinarily powerful in this, they might take a group in Mississippi 

and say, ‘‘Hey, guys, we’re not going to talk to you. You are now 

coming to us in association. We are refusing to deal with you. 

Goodbye.’’ Oxford Insurance, in my district in New York, said to 

whole hospitals, ‘‘You don’t like it? Tough. Take a hike.’’

So it could well be that the PBMs will continue to act in the way 

that PBMs have acted. And I would refer you to the testimony of 

Mr. Balto’s and to a list as long as my arm of lawsuits brought by 

consumers against PBMs and by States like my own against PBMs. 

So it could well be that this might not have a great impact. 

You see, this is the problem that I have. We can’t say that this 

is going to have this seismic shift when we know intuitively these 

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are still tiny players. Just to give them one additional arrow in 

their quiver, this notion that they’re going to transcend from being 

David into Goliath overnight because of this bill, I think, is overstating the case. 

Mr. Balto, do you want to respond since Mr. Wales mentioned 

your testimony? 

Mr. BALTO. Yes. You know, we’re ready to—all three of us are 

ready to give you an economic seminar, but let me explain. Pharmacies are being reimbursed at a suboptimal level. What they’re 

trying to do is get it up to what it should be. What we’re all saying 

is they—well, what all of us are saying is there is no chance these 

guys can have market power. They might get power enough to get 

it up to something like the level where it should be, but they’re not 

going to be able to charge super-competitive prices. 

Again, the FTC’s decision not to protect the poor, weak PBMs of 

New York against Rite Aid’s 40-percent-plus market share in several metropolitan markets in New York City shows you that getting independent pharmacies together is not going to harm the 

PBMs. Ultimately, consumers aren’t going to be harmed. 

You know, what we’re talking about is a legal rule that you have 

decided doesn’t work in certain circumstances, and you’ve enacted 

exemptions that prevent PBMs from going and doing everything 

that a chain pharmacy does. That’s all. And if the chain pharmacies do it, nobody cares. But if the independent pharmacists try 

to do it, they’re saying that a sword of Damocles should befall 

them. 

Mr. WEINER. Let me pivot off of that, because I was thinking the 

same thing when I was listening to Mr. Rankin’s testimony and 

Mr. Wales’ as well. 

By the logical extension of your argument, taxpayers, PBMs, the 

Government and consumers would benefit a great deal if Rite Aid 

had to negotiate as an individual store, right, that they could not 

join together? 

Mr. Rankin, do you want to take a stab at that? 

Mr. RANKIN. I am sorry. The question? 

Mr. WEINER. By the logical extension, if this would have such 

pernicious effects by allowing a small group to band together, it 

seems to me that the inverse is true, that if we said to Rite Aid 

tomorrow, ‘‘Rite Aid on Avenue U,’’ in my district, ‘‘and Rite Aid 

on Kings Highway, you can’t band together as one company and 

negotiate; you’ve got to do it as individuals,’’ that would reduce the 

cost to consumers, wouldn’t it? 

Mr. RANKIN. I guess I disagree with the premise of your question. And I think one thing that we’re losing track of here is the 

fact that there are access requirements that provide protection 

right now, and it is those same access requirements that give market share when there is not necessarily 40 or 50 percent. 

All you need, frankly, is a handful of independent pharmacies 

that happen to be, say, the only pharmacy within 15 miles of a 

rural residence. The inclusion of that pharmacy is absolutely necessary to comply with Federal access guidelines. 

Mr. WEINER. Right, I understand. 

If you can, just return to my question. You’ve made the argument that allowing this small group of hardy souls to band toVerDate 0ct 09 2002 12:20 Jul 09, 2008 Jkt 000000 PO 00000 Frm 00132 Fmt 6633 Sfmt 6601 H:\WORK\ATRUST2\101807\38336.000 HJUD1 PsN: 38336
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gether is going to increase costs to consumers, increase costs to taxpayers, increase costs, period. 

Isn’t the inverse true, that, if we were to say tomorrow, ‘‘Rite 

Aid,’’ which has hundreds of stores, ‘‘you can’t negotiate your 600 

stores together; you’ve got to go to the PBMs as individual stores,’’ 

which is the situation that independents are in now, that that 

would, by definition, or by your rationale, reduce costs to consumers? Because they wouldn’t have the bargaining power and the 

heft to join together, would they not? 

Mr. RANKIN. I don’t think that’s true. 

Mr. WEINER. Oh, okay. 

Mr. RANKIN. I think there’s at least one aggregation issue that 

you’re overlooking, which is the simple fact that, when PBMs or 

health plans approach pharmacies to construct a network, pharmacies can say, ‘‘No.’’ When you secure Rite Aid, you secure a certain number of pharmacies. 

Mr. WEINER. Well, that’s preposterous. 

Mr. Dozier, explain to him why that’s preposterous. 

Mr. DOZIER. When a PBM approaches a pharmacy, it’s a ‘‘take 

it or leave it’’ contract, plain and simple. 

If I were going to enter into a business deal with you, Mr. 

Weiner, there’d be some type of negotiating. When a PBM comes 

to a pharmacy, there’s no type of negotiating, none whatsoever. The 

PBM says, ‘‘Here is the contract. This is the reimbursement. These 

are the terms. You either accept it or you can’t be a provider in this 

network.’’ And if that pharmacist doesn’t accept that contract, 

they’re not allowed to serve their patient that they might have 

been serving for the past 20 or 30 years. That patient is going to 

have to go down the street to another pharmacy that they don’t 

want to. 

Mr. WEINER. Mr. Dozier, thank you. 

Mr. Balto, would you explain—because I’m not sure my question 

put it right. The argument by Mr. Rankin and by Mr. Wales is, if 

you allow these independent pharmacies of a relatively tiny number to band together, it would raise prices. I asked Mr. Rankin, 

does that not mean if you take the inverse, that if we had Rite Aid 

disband and they could only negotiate as individual Rite Aids, it 

would reduce prices as well, would it not? I mean, by the logical 

extension, I’m not,you know——

Mr. BALTO. Sure. You know, in the idyllic world of economic theory, it might appear to be good to create unlimited monopsony 

power. That would be great, you know, if we had agricultural processors with monopsony power. That would mean that we’d have, 

probably, relatively few farmers, and we would go extraordinarily 

hungry, because the goal of a monopsonist is to drive output down 

and to buy as little as possible. And we’re not talking about corn 

here; we’re talking about health care. 

But let me—you know, the PBMs—by the way, I should say, for 

full disclosure, I do, actually, do work for pharmaceutical benefit 

managers. I appreciate both sides of the story here. 

The PBMs are suggesting that they’re competing on behalf of the 

plan sponsors. If they were competing on behalf of the plan sponsors, in that index of consumer protection and fraud cases that I 

have appended to my testimony, you would not see so many cases 

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brought by plan sponsors against the PBMs. Why? Because the 

PBMs refuse to disclose information to the plan sponsors so that 

they can really assure a competitive market, so that, when they 

undercharge the community pharmacist, they know the value of 

that deal and they get the best price possible. 

I want to be sure that I have a chance to respond to the PCMA 

estimates. Could I have 2 minutes for that? 

I really look forward to going and providing a critique of the 

PCMA estimates, but, you know, these estimates are only as good 

as the assumptions they make. And the assumptions they make 

are terribly flawed. 

They suggest that, basically, Mr. James is going to turn the tables on the PBMs, he is going to gag and chain them at the negotiating table. He’s going to say, ‘‘You know that cash price I get? You 

have to give me that cash price.’’ We’re not talking about 10 or 15 

percent. We’re talking about something really substantially higher. 

They use this estimate from North Dakota. Well, the bid that was 

submitted by the North Dakota group was rejected, and they got 

far less than that. 

Finally, you know, the question, to me, about the additional costs 

I think are answered by the Rite Aid nonenforcement action by the 

FTC. If there is a real threat of market power here by your 20 

independent pharmacies in Florida getting together, I guarantee 

you the FTC would never have let Rite Aid acquire Eckerd’s. 

Mr. CONYERS. Thank you very much. 

I am going to ask Mr. Weiner to allow the gentlelady from California, Maxine Waters, a distinguished Member of the Judiciary 

Committee and who is under some time pressures—we would like 

to yield to her for any comments or opening statement that she 

would like to make at this time. 

Ms. WATERS. Thank you very much, Mr. Chairman, for your generosity. 

I do have to get back to my office, but I wanted to stop by, number one, because I am on the Antitrust Task Force, appointed by 

you, and I do want to pay attention to these issues. And, of course, 

I am extremely interested in the subject that is before us today. 

This Task Force on Antitrust and Competition Policy hearing that 

you’re holding interests me simply because, as a consumer that is 

involved with having to purchase prescriptions, I had no idea that 

there was an intermediary that managed all of this. I thought, 

when I went to my pharmacist, that I was purchasing my medicine 

from someone who bought it from the manufacturer and that there 

was a cost, certainly, involved that was negotiated with the manufacturer. I just had no idea that it was all this involved. 

Let me just say, Mr. Weiner, that I don’t know whether or not 

your prescription for making it fair to the local pharmacists is the 

right one, but I’m interested in hearing if, in fact, an exemption, 

antitrust exemption, would allow them to be able to negotiate with 

the intermediary—what is it, the PBMs?—that I’m interested in 

that, because I don’t like the idea of moving toward more mailorder prescriptions. I like the idea that I can talk with the pharmacist and ask him more questions about how I should use the 

medicine and what my experience has been. And I even like the 

idea of simply having to check off—that they offer to talk to me if 

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I want to talk, because I am just an old-fashioned person who likes 

the local pharmacist, the local bank, the local everything. I’m sick 

and tired of being thrown into these systems where I have less and 

less control. 

So we’ve got to have a remedy. I don’t know whether this is it 

or not, but it sounds good to me, and I am going to pay attention 

to it. 

Thank you. 

Mr. WEINER. Would the gentlelady yield? 

Ms. WATERS. Yes. 

Mr. WEINER. This is a scenario where you have the Goliath of 

PBMs, the Goliath of mail-order, the really big Goliath of the Federal Government, and then the tiny, little, individual people with 

their tiny, little, individual pharmacists. This might not be the sum 

and substance, because, at some point, we have to figure out a way 

to deal with this mail-order explosion, as to whether it is good or 

bad for health care, but this gives one additional little arrow in the 

quiver of the community pharmacist to be able to try to deal with 

things on behalf of their neighbors and their constituents. 

So I thank you for keeping an open mind on it, but I think, at 

the end of the day, we’re going to have big health care things we’re 

going to have to do, but this is one way to help community pharmacists survive. So, by the time we get there and Mrs. Clinton is 

sworn in as President and she starts putting her plans in place, 

that she has a community pharmacy foundation of providers out 

there that are still around, because they are precipitously dropping 

off. 

I thank you. 

Ms. WATERS. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. CONYERS. Well, you see, this hearing has been excellent because it raises some larger considerations in the delivery of health 

care in the United States, and this Committee is poised to make 

further inquiries. 

I just want to congratulate everybody for being here and for 

being patient. We know that a lot of our colleagues have conflicts, 

and they will be studying the record carefully. 

The gentleman from California, Brad Sherman, has come into 

the room, and I would yield to him if he wanted to welcome anybody or to make any comments. 

Mr. SHERMAN. Thanks for coming here. 

I’ve got a pain here. If you’ve got some good drugs, that would 

be helpful. [Laughter.] 

I apologize for not being here for the entire meeting, and I’ll look 

forward to studying this issue. 

I join with everyone else here on the panel in thinking that 

Americans need access to a local pharmacist that they can actually 

talk to. 

Thank you. 

Mr. CONYERS. And on that note, the Task Force on Antitrust is 

adjourned. And I thank, again, all of the witnesses for their excellent presentations. 

[Whereupon, at 11:23 a.m., the Task Force was adjourned.]

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