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Klobuchar Demands Action on Price-Gouging in Prescription Medicines

Pushes FTC commissioners to pursue drug-pricing investigations

April 8, 2008

Washington, D.C. – At a hearing of the Senate Commerce Committee today, U.S. Senator Amy Klobuchar demanded action from the Federal Trade Commission (FTC) to stop price-gouging by pharmaceutical companies and bring more competition to the market for prescription drugs.

Klobuchar made reference to Ovation Pharmaceuticals, an Illinois company that raised the price of a heart drug for premature infants by more than 18-fold after acquiring distribution rights to the medicine. Klobuchar recently wrote to Ovation executives demanding an explanation for the company’s pricing behavior, after Minnesota hospitals and doctors complained about the price increase.

“How does the Commission respond to cases where drug companies appear to be charging excessive prices for a vital medicine?’’ Klobuchar asked FTC Chairman William Kovacic. “How do I get some action on something that to me seems outrageous? I’d like to go back and tell the doctors in Minnesota that we’re making some progress.’’

Klobuchar noted that the cost of prescription drugs has risen dramatically in the last decade, pricing them beyond the reach of many middle-class consumers. She noted that Ovation was not the only example. The price of another medicine, H.P. Acthar, known as the gold standard for treating catastrophic seizures in babies, was recently raised by 14-fold by its manufacturer.

Klobuchar also mentioned cases where one drug company pays another a certain fee to delay the introduction of generic alternatives.

Klobuchar, a member of the Commerce Committee, said that reauthorization of the FTC should include adequate staff and resources to make sure the commission can investigate price-fixing and anticompetitive behavior in the pharmaceutical industry.

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