Senator Amy Klobuchar

Working for the People of Minnesota

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Joel Gross
Press Secretary
(202) 224-3244

News Releases

Klobuchar Calls for Action to Stop Price-Gouging in Specialized Prescription Drugs

Convenes Joint Economic Committee hearing to examine skyrocketing medication prices

July 24, 2008

Washington, D.C. – U.S. Senator Amy Klobuchar convened a hearing of Congress’ Joint Economic Committee today to examine skyrocketing prices of certain prescription drugs and the impact on the pharmaceutical market, hospital budgets and consumers’ health care costs.

At Thursday’s hearing, a physician and a University of Minnesota expert said prices for medications used to treat infant heart defects, AIDS, and other serious conditions had risen as much as 10- or 18-fold, often after the drugs were acquired by new companies, forcing consumers to pay thousands of dollars out of pocket for life-saving medications.

“This looks to me like simple price-gouging. These companies are jacking up prices on the backs of consumers, of taxpayers and even little babies,’’ Klobuchar said. “And it not only hurts patients, it hurts the hospitals who also have to purchase expensive drugs and the doctors who only want the best for their patients.’’

Klobuchar was joined at the hearing by Senator Charles Schumer (D-NY), chairman of the Joint Economic Committee.

Last winter Klobuchar wrote executives of Ovation, an Illinois pharmaceutical company, asking them to explain an 18-fold increase in the price of Indocin, a drug used to treat heart conditions in premature infants, after Ovation acquired distribution rights to the drug. Klobuchar also has asked the Federal Trade Commission to investigate whether anti-competitive practices led to the price increase of Indocin and similar medications.

“I understand that we have a market-based economy,’’ Klobuchar said. “It’s fine for companies to make money on the products they sell. But when you’re dealing with the well-being of sick patients – babies and the elderly and everyone in between – there has to be special consideration.’’ Pointing to a chart showing drugs whose prices more than doubled in a single year, Klobuchar said, “I don’t think this is the law of supply and demand.’’

At Thursday’s hearing Klobuchar also outlined several possible solutions to the problem of skyrocketing drug costs, such as authorizing the Food and Drug Administration to consider fast-tracking the approval of cheaper generic alternatives to expensive specialized drugs. She also said the government needs a better price-tracking system in the pharmaceutical market to monitor sudden cost increases.

“In America we have a serious problem with health care inflation and runaway costs. It’s no wonder, when a handful of companies can increase prices to astronomical levels because of a lack of competition. They are able to exploit an extremely vulnerable and captive market,’’ Klobuchar said. “Beyond hospitals and patients, a dramatic increase in the price for one of these drugs has a significant impact on the federal government because if the wholesale cost of a drug goes up, Medicare or Medicaid has to pay for the increase. So this is also about taxpayers’ money.’’

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