WASHINGTON – At a Senate Judiciary Committee hearing titled “Ensuring Affordable & Accessible Medications: Examining Competition in the Prescription Drug Market”, U.S. Senator Amy Klobuchar (D-MN), Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, discussed the need to bring greater competition to prescription drug markets to reduce costs and improve choices for consumers by bringing her bipartisan bills to the Floor for a vote.

“Anticompetitive pay-for-delay settlements where a branded pharma company pays off a generic or biosimilar company to delay the introduction of the competing drug product is sadly a common practice. Our bill called Preserve Access to Affordable Generics and Biosimilars Act strikes a balance between anticompetitive settlements while allowing pro-competitive patent settlements to proceed, and saving the estimated $1.6 billion over 10 years,” said Klobuchar.

Klobuchar continued, “[Sham FDA petitions] risk delaying the approval of generic drugs and biosimilars and pose [] unnecessary burdens on FDA resources. Senator Grassley and I introduced a bill, the Stop STALLING Act, to give the FTC enhanced authority to crack down on abuses of this process while allowing petitions submitted in good faith to raise legitimate health and safety concerns. CBO estimates the bill would save taxpayers $400 million over 10 years.”

Senator Klobuchar has been a leading voice in the Senate to lower prescription drug prices. 

Klobuchar’s bill to end the ban on Medicare negotiating lower prescription drug prices for Medicare’s 50 million seniors and help lower drug prices for all Americans was signed into law in 2022 as part of a larger legislative package.

Klobuchar leads two bipartisan bills with Senator Chuck Grassley (R-IA) to promote competition and reduce drug prices: the Preserve Access to Affordable Generics and Biosimilars Act and the Stop STALLING Act. Last February, they both unanimously passed the Senate Judiciary Committee.

The Preserve Access to Affordable Generics and Biosimilars Act would limit anticompetitive “pay-for-delay” deals that prevent or delay the introduction of affordable generic drugs . Pay-for-delay deals happen when branded pharmaceutical companies pay generic drug companies to delay the introduction of cheaper substitutes – increasing the cost of prescriptions and imposing significant costs on our health care system. 

The Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics  (Stop STALLING) Act would deter branded pharmaceutical companies from filing sham petitions with the Food and Drug Administration in order to interfere with the approval of generic and biosimilar medicines that would compete with their own branded products, a tactic that delays patient access to affordable medications. The bill would also give the Federal Trade Commission enhanced authority to take action against those companies that file sham petitions. 

Earlier this year, Klobuchar worked with Senators Peter Welch (D-VT) and Mike Braun (R-IN) to introduce bipartisan, bicameral legislation to streamline drug patent litigation, encourage fair market competition, and lower prescription drug prices by making it easier for generic and biosimilar companies to enter the market.

A rough transcript of Klobuchar’s full remarks is available below. Download video here.  

Senator Klobuchar: Thank you very much, Mr. Chair. And thank you for the work that we've done together on the negotiation of Medicare prices. 

We're so pleased, I heard you talk, Mr. Mitchell, about Eliquis. One of the drugs, as you know, that's now being negotiated, of the ten blockbusters, with many more to come. I want to start, though, with one of the issues of a bill that still hasn't passed that Senator Grassley and I have been working on for a really long time, which I know he mentioned – pay-for-delay. As you know, Mr. Mitchell, anti-competitive pay-for-delay settlements–where a branded pharma company pays off a generic or biosimilar company to delay the introduction of the competing drug product–is sadly a common practice. Our bill, it's called the Preserve Access to Affordable Generics and Biosimilars Act, strikes a balance between targeting anti-competitive settlements while allowing pro-competitive patent settlements to proceed and saving an estimated $1.6 billion, $1.6 billion over 10 years. Mr. Mitchell, you mentioned the drug that you depend on, Revlimid, which was caught up in a pay-for-delay settlement, as I understand. How did that affect the cost of the drug for you personally? How do pay-for-delay deals keep the cost of prescription drugs high for patients generally?

David Mitchell: I took Revlimid for five and a half years, and during the time that I took the drug, both the price, underlying price, and my out of pocket rose dramatically. When, by the way, Revlimid was the second most expensive drug for Medicare until it began to have competition last year to treat only 39,000 patients. The second most expensive drug for Medicare at $5.4 billion. When the drug company that owns the patent decided to let competition come on the market, it limited the generics to a lower market share, 10% each for the first two competitors. If you have a limited market share as part of the deal, you will not lower your price because you cannot gain market share. What happens then is the brand drug company and the two generics, in the case of Revlimid, shared the monopoly, and the price didn't come down. This is a pay-for-delay deal. This is making an arrangement to say we won't fight you in court. Instead, we'll give you a market share limited deal, and you will make a whole lot of money for a few years, while we delay real competition.

Klobuchar: Very good description. Thank you. Turning to another issue that has been discussed today, is sham FDA petitions. Dr. Feldman, this practice risks delaying the approval of generic drugs and biosimilars, and imposes unnecessary burdens on FDA resources, to add to everything else when they have so much to do. Senator Grassley and I introduced a bill, the Stop STALLING Act, to give the FTC enhanced authority to crack down on abuses of this process while allowing petitions submitted in good faith to raise legitimate health and safety concerns. CBO estimates that the bill would save taxpayers $400 million over 10 years. As you know, both of these bills have gone through this committee on a voice vote. Which types of entities filed the majority of citizen petitions challenging FDA approval of generic or biosimilars Dr. Feldman?

Dr. William Feldman: Brand name drug companies. 

Klobuchar: Okay, and can you elaborate on the harm to patients and competition caused when pharma companies use a citizen petition process to delay entry of competing drugs? I just find it ironic, indeed. When it's a citizen petition process, and the citizens are getting screwed by it, but continue on.

Feldman: I have felt that same irony myself. So, first of all, we should say that companies are doing this because every day of delay for some of these blockbuster drugs can be worth millions or tens of millions of dollars for the company. So there's a strong incentive to do this. And basically, what happens is the brand name firms will wait until the right moment to put a question to the FDA to request that they not approve a generic medication. And it slows things down. And every day that we slow things down is more revenue for the brand name manufacturers. But, it's one less day that patients get access to generic drugs. And we know that generic drugs are the number one way to lower prices in this country. It is a way to bring down costs for patients. So I think -it's a good bill. And as you said, these are not citizen petitions, they are -put out there by the companies for economic gain.

Klobuchar: Last, Professor Rai. The price of 25 brand name medications that Medicare spends the most on, some of which are negotiated, of course, right now or in negotiations and have, on average, tripled in price since they hit the market. You have written that Medicare price negotiations will promote the entry of new drugs by reducing the incentives for brand drug companies to engage in anti-competitive patent strategies that can allow for these price increases. So this is kind of where our Medicare [drug price] negotiations, that are almost an outcome of all of this bad activity, sort of hits the road and combines with this patent problem. How will requiring drug companies to negotiate prices with Medicare… as I said, with more on the road, despite lawsuits going on right now all over the country to try to stop us, which seems unbelievable to me given that Congress is the one that made the deal and Congress can change a deal. How will requiring drug companies to negotiate prices with Medicare deter pharma companies from playing patent lifecycle games to preserve high prices and facilitate the entry of competitors and further reduce prices?

Professor Arti Rai: So I think the Inflation Reduction Act is one of the most important patent reforms of the 21st century, and the reason is this: it finally places a time limit, at least for Medicare, on how long you can extend an old drug, which means that you have to come up with new drugs, truly new drugs, and that is a game changer, it seems to me, and I wish it was only more than 10 drugs, and it is increasing, fortunately. But I think that's how it spurs innovation, and Dr. Feldman noted this as well, or Mr. Mitchell noted this point as well that it spurs innovation to prevent patent abuse. 

Klobuchar: Very good. Thank you. I'll turn it back to the Chair. 

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