News Releases

EDINA, MN -- At Fairview Southdale Hospital, U.S. Senator Amy Klobuchar convened a forum today entitled “A Dose of Common Sense: Ensuring Affordable Access to Medications.” 

The event featured Minnesota Attorney General Lori Swanson and Jon Leibowitz, the Chairman of the Federal Trade Commission, which protects consumers against business practices that are anticompetitive, deceptive or unfair. 

The forum addressed four specific issues:

Drug Shortages

Klobuchar said there is a crisis with unprecedented shortages of essential medications.  She noted that the number of drug shortages has nearly tripled over the past six years, jumping from 61 drug products in 2005 to more than 200 in 2011. 

Klobuchar has introduced the Preserving Access to Life-Saving Medications Act, bipartisan legislation which would provide the U.S. Food and Drug Administration (FDA) with the authority to require early notification from a pharmaceutical company at least six months in advance of any planned interruption, disruption or discontinuation of a drug.

“Pay-to-Delay” Deals

Pay-for-delay deals are an anti-competitive practice in the pharmaceutical industry.  It occurs when a generic drug producer agrees to keep its lower-cost drug off the market in exchange for a payment from the company that makes the more expensive brand-name drug.  As a result, consumers must buy the more expensive brand-name drug rather than the lower-cost generic version.

FTC Chairman Jon Leibowitz said that a top priority for his agency is to end “pay-to-delay” deals – which are when a brand-name drug manufacturer pays a generic competitor to keep its lower-cost drug off the market.

Klobuchar is also cosponsor of the Preserve Access to Affordable Generics Act, bipartisan legislation which would explicitly prohibit brand-name drug manufacturers from using pay-off agreements to keep cheaper generic equivalents off the market.

Price-Gouging

As a result of the drug shortages and pay-for-delay deals, hospitals and pharmacists report that a flourishing “gray market” has emerged, with middlemen hoarding scarce drugs and jacking up prices to exorbitant levels.

Both the FTC chairman and Minnesota Attorney General Lori Swanson said they are vigilant and will investigate any suspected price-gouging. Klobuchar said that, in previous situations, she has asked the FTC to investigate specific companies that were suspected of price-gouging.

Medicare Part D Prescription Drug Benefit for Seniors

Under current law, Medicare is not allowed to negotiate lower prices from pharmaceutical companies.  In contrast, Veterans Administration is permitted to use its bulk purchasing power to negotiate with drug companies.  As a result, the VA has achieved significant cost-savings as a result.

Klobuchar is a cosponsor of the Medicare Prescription Drug Price Negotiation Act, which would require Medicare to negotiate with pharmaceutical manufacturers to get the best possible prices.  By negotiating directly with pharmaceutical companies, Medicare would be able to pass along the savings to nearly 28 million seniors currently enrolled in Medicare Part D.

In addition to Klobuchar, speakers at the forum included:

-          Jon Leibowitz, Chairman of the Federal Trade Commission

-          Lori Swanson, Attorney General for Minnesota

-          Stephen Schondelmeyer, Professor of Pharmaceutical Economics, University of  Minnesota

-          Darcy Malard Johnson, Oncology Pharmacy Program Manager, Fairview Pharmacy Services

-          Mary McHugh Morrison, a cancer patient from Edina

###