Klobuchar’s legislation to lift the nearly 20-year ban that stopped Medicare from being able to negotiate lower drug prices for consumers was signed into law last year
WASHINGTON - On the Senate floor, U.S. Senator Amy Klobuchar (D-MN) highlighted Medicare’s announcement of the first ten drugs selected for price negotiation and the need to fight back against Big Pharma’s attempts to stop the law in court. She was joined for a series of floor speeches on this topic by Senators Ron Wyden (D-OR), Peter Welch (D-VT), Chuck Schumer (D-NY), Debbie Stabenow (D-MI), Tammy Baldwin (D-WI), Catherine Cortez Masto (D-NV), John Hickenlooper (D-CO), and Sheldon Whitehouse (D-RI).
Klobuchar’s full floor remarks are below. Video is available for online viewing HERE.
Mr. President, I rise with many of my colleagues today to mark a new era for patients in this country. Last year, we decided that enough is enough. And we put an end to the sweetheart deal that let drug companies charge seniors on Medicare whatever they wanted for some of the most common life-saving and life-improving prescription meds on the market.
Now, the Big Pharma companies are trying to stop this legislation with absurd lawsuits. And I'll talk about that effort in a moment. But for now, let me say unequivocally: allowing Medicare to negotiate lower prices is a victory for seniors, a victory for taxpayers, a victory for patients and their families, a victory for America.
Mr. President, thank you for your work on this. As the Senator from Vermont, when you were the House Member for Vermont, you led this bill in the House and I led it in the Senate. We worked together to allow for the negotiation of drug [prices]. And finally, this bill has been passed into law as part of larger legislation. A number of our colleagues, including Senator Wyden of Oregon, have long been leaders on this issue. I think we all know this progress could not have come soon enough.
We know that Americans pay the highest prices in the world for the same brand name prescription drugs. In fact, prescription drug prices in the U.S. are more than 250% higher than drug prices in other industrialized countries. And not only are prices sky high, we've all watched them get higher as Senator Wyden has worked on this, as you, Mr. President, have worked on this, as Senator Schumer has worked on this. We have continued to battle, sadly, the other side, when it comes to putting our provision into law that allows Medicare to negotiate better prices.
Finally, we did it on our own. We did it on our own, but not really. We did it with the seniors of this country - with AARP at our side. With so many advocacy groups. Taxpayers should not have to foot the bill to have the money go into higher profits for companies that already are making much more than the average company on the [S&P 500] stock exchange.
Not only are we seeing high prices, but it literally makes it unaffordable for some patients. What good are treatments and cures if they go unused because they are unaffordable? The average price of the 25 brand name medications that Medicare spends the most on, 25 top blockbusters, has tripled on average, tripled, since the drugs hit the U.S. market. Think about it. We all believe in competition. We believe in capitalism.
Well if you allow for real competition and generics to get on [the market], and you don't mess around and play around with the patent system, and change this little thing so you get a longer patent, and you don't put into law a sweetheart deal that says Medicare can't negotiate any prices for 50 million seniors, which by the way affects everyone else because when that the biggest negotiating group in the country is locked out from the table, they're locked out of the room, it hurts everyone else as well for what the prices are.
This change alone, when the administration just put the first ten drugs on the negotiating table. We have so many people involved that will be affected by this that we will say we will save… over [$3.4] billion dollars. That is a big, big deal. Not only are prices sky high, we know that the numbers only grow [more] shocking as you learn about the people behind them and about the profit margins of the big drug companies.
I'm thinking of Kerry and his wife who live in Cloquet, Minnesota and both take Jardiance. This prescription drug costs them $750 each for just one month supply and that's on top of the cost of their other meds. I know of a 71-year-old Medicare beneficiary from Oak Grove, Minnesota who also relies on Jardiance to control a heart issue. Last year that drug cost her about $530 for a 90-day supply [that is] roughly a sixth of her take home pay from her job at a senior care residence.
Another Minnesotan, a 67-year-old Medicare beneficiary from Glenville paid roughly $750 total for a 90 day supply of Jardiance and Januvia, and stopped taking the drugs altogether due to the costs. And then there's another patient from Rochester, Minnesota, southern Minnesota, who was diagnosed with a rare form of blood cancer. She was relieved to find that she would be able to take an oral medication instead of invasive chemotherapy treatments, but it was going to cost $680 per month [out-of-pocket], nearly half of her monthly Social Security check. Her daughter applied for a grant and figured out a way to make ends meet but it just shouldn't be that hard. Those are just a few of the many Minnesotans who have had to tighten their belts to satisfy Big Pharma’s greed.
You’ll hear the stories from Oregon, you’ll hear the stories from every state in this country. In fact Big Pharma makes almost, as I said, three times the average profit margin of other industries on the S&P 500 [Stock] Exchange, three times larger profit on average of other industries on the S&P stock market. And yet nearly 30% of Americans say they haven't taken their medications as prescribed due to costs. That's unacceptable.
The Presiding Officer, [when he was] over in the House, and I led these bills to get rid of that sweetheart deal. And yes, we got this into the Inflation Reduction Act and got it signed into law. A couple of weeks ago, Medicare announced the first ten drugs selected for price negotiation including, as I mentioned, Jardiance, which treats heart failure and diabetes, Januvia, another prescription for diabetes, Enbrel [a] rheumatoid arthritis and psoriasis treatment, Xarelto and … Eliquis medications to prevent blood clots taken by… taken by five million Medicare beneficiaries.
And I wanted to correct one statistic I used, it is up to nine million Americans with Medicare Part D take the drugs that were selected. And they have spent, I said 300, they have spent $3.4 billion, $3.4 billion in out-of-pocket costs.
Up to nine million Americans with Medicare Part D take those ten drugs paying an average between $121 and $5,200 a month… out-of-pocket. $5,200 [a] month, how much is that per year? The Pages can do the math, that is $60,000 on average per year. What does this mean for a senior on a fixed income? That relief is finally coming. For years we toiled on this legislation, as Presiding Officer [Senator Welch] and Senator Wyden… but it was Joe Biden that finally got it over the finish line and signed it into law. Giving Medicare the power to negotiate with drug companies to help bring the price of medications in the U.S. down. The law also, as we all know, has other provisions: $35 out-of-pocket monthly cap on insulin. This new policy has lowered the costs [of] daily living for [an estimated] over 1.5 million Americans already.
We now have drug companies that have voluntarily, for non-seniors, capped it. I predicted this would happen, several of us did, because it's kind of hard to say “well, seniors get $35 but a 15 year old has to pay $100 a month.” So you're starting to see that change. That law also provides free recommended vaccines like shingles or pneumonia, that is going to help the average Minnesota senior save about 100 bucks. And then of course the legislation puts a $2,000 cap on out-of-pocket spending for Medicare beneficiaries starting in 2025.
What happened? Lawsuits. Johnson & Johnson, let's name them: Johnson & Johnson has sued. I thought when we passed it, signed into law by the President [of the] United States, anyone that knows Schoolhouse Rock knows, get both Houses to pass, sign a bill by the President, it's law. What these guys do, they go out and they sue in court like “oh, we made a sweetheart deal twenty years ago and we want it back so we're gonna sue.” [They] hire tons of lawyers, Johnson & Johnson, Merck, Bristol Myers Squibb, Boehringer Ingelheim, and Novartis as well as the industry trade group, the Pharmaceutical Research and Manufacturers of America, better known as PhRMA, they've all sued. We know that this effort is patently absurd. Government agencies negotiating on drug prices isn't novel and unprecedented, the VA has done it for years.
End story: we persisted. After nearly $400 million dollars was spent in lobbying in Congress. After every member of Congress had three lobbyists assigned to them. We still passed this bill. So big surprise they've gone to court, but we will win there, too. Their legal argument is somewhat absurd, that somehow this is a taking. When in fact it is their choice to participate in capitalism and provide these drugs and be part of our competition. It's not a taking if they don't want to sell drugs to 50 million Americans, I guess that's up to them.
These first ten drugs are just the beginning. We must go then to the next 15, the next 15, the next 20, that's how the law works. And at the same time, take on these patent cases that Senator Grassley and I have done, Senator Cornyn, Senator Blumenthal, others in Judiciary are leading bills to take on the sham petitions, take on the product hopping and take on all the bad stuff that keeps competitors off the market. But in the end, this should be a celebration. This has finally begun and they're not going to end the celebration for 50 million seniors with all their lawyers, no matter how many they hire, and no matter how many they bring to the courthouse.
With that Mr. President, I yield to my wonderful colleagues. Thank you.
Klobuchar has long led efforts to lower drug prices.
The Empowering Medicare Seniors to Negotiate Drug Prices Act, 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 August 2022 as part of larger legislation.
This past April, Klobuchar, Senator Peter Welch (D-VT), and 28 of their colleagues introduced the Strengthening Medicare and Reducing Taxpayer (SMART) Prices Act which would give the Department of Health and Human Services (HHS) enhanced ability to negotiate lower drug prices for Medicare Part D beneficiaries.
In February, the Senate Judiciary Committee favorably reported by voice vote two of Klobuchar and Senator Chuck Grassley’s (R-IA) bipartisan bills to promote competition and reduce drug prices - the Preserving Access to Affordable Generics and Biosimilars Act and the Stop STALLING Act.
The Preserving Access to Affordable Generics and Biosimilars Act would limit anticompetitive “pay-for-delay” deals that prevent or delay the introduction of affordable follow-on versions of branded pharmaceuticals.
The Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics (Stop STALLING) Act would deter pharmaceutical companies from filing sham petitions with the Food and Drug Administration (FDA) that interfere with the approval of generic and biosimilar medicines that compete with their own brand products, a tactic that delays patient access to affordable medications.
In June 2022, Klobuchar and Representative Katie Porter (D-CA) urged the Department of Justice (DOJ) and Federal Trade Commission (FTC) to examine the parallel price increases for two commonly-used blood thinner medications: Janssen Pharmaceuticals’ Xarelto and Bristol-Myers Squibb (BMS)-Pfizer’s Eliquis. The lawmakers expressed concern that lockstep pricing practices and the general lack of competitive behavior exhibited by these drug sellers may constitute potential unlawful conduct.
In February 2022, Klobuchar and Senator Bernie Sanders (I-VT) introduced the Cutting Medicare Prescription Drug Prices in Half Act, which would allow Medicare to pay the same prices for prescription drugs as the Department of Veterans Affairs (VA). The prices the VA pays for prescription drugs are roughly half the amount of prices paid by Medicare Part D for the same products.
In February 2021, Klobuchar and Grassley introduced bipartisan legislation to allow imports of more affordable prescription drugs from Canada. The Safe and Affordable Drugs from Canada Act would allow Americans to safely import prescription drugs from Canada, lowering prices for consumers and promoting competition in the pharmaceutical market.