ObamaCare

Floor Speech

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Ms. KLOBUCHAR. Mr. President, I rise to bring attention to an urgent issue affecting all Americans. Actually, the No. 1 issue I heard about when I was home--and especially at our State fair, which, by the way, is the biggest State fair in the country because we don't count Texas because they are open for a month. But there were 2 million people, a record crowd, 1.9 million to be exact.

I went out there most of the days, and I was able to talk to folks right where they were. The issue they are talking about is the high cost of prescription drugs in our country. The price of insulin has tripled in the last decade. The price of the infectious disease drug Daraprim has increased 5,000 percent overnight. The antibiotic Doxycycline went from $20 a bottle to nearly $2,000 a bottle in just 6 months. Of course, the price for an EpiPen--which received so much attention over the last few weeks, which is used to treat life- threatening allergies, my daughter carries one wherever she goes--shot up nearly 500 percent since 2007.

It seems every week we hear another disturbing report of drug companies focused on profits. According to a 2016 Reuters report, prices for 4 of the Nation's top 10 drugs increased more than 100 percent since 2011. The report also shows that sales for those 10 drugs went up 44 percent between 2011 and 2014, even though they were prescribed 22 percent less.

I continue to hear from people across my State and the Nation about the burdensome cost of prescription drugs. There are heartbreaking stories about huge pricetags that are stretching families' budgets to a breaking point. This is just an example. I brought these examples home with me from the State fair and then brought them to Washington. These are from just a few days at our State fair booth, where people came up and filled out cards about their stories of increasing drug prices. These are just a few of the emails we have received since August 25 and calls we have received in our office every single day.

For example, take the Dwyer family from Cambridge, MN. At 11 years old, Abby was diagnose with a rare form of leukemia. A few years later, her older brother Aaron was diagnosed with stage III lymphoma. Thankfully, both Abby and Aaron are doing much better, but the family faced astronomical out-of-pocket expenses during their treatment. Abby is on a drug with an average wholesale price in the United States of $367 per day, which is double the average price in other countries.

Another example is a family from Elk River, MN. Due to their son's allergies, they must buy four EpiPens a year--two for home, one for school, and one for daycare. That is not overdoing it. I can tell you, having had a child with allergies since she was 4 years old, you don't just buy one. You have to buy one for school, then you also have to maybe buy one for grandma's house, and then one gets lost--so you end up not buying just one EpiPen. In reality, most families are buying four to six, which are two packs, three packs, sometimes even four packs. This family from Elk River, MN, buys four EpiPens a year: two for home, one for school, and one for daycare.

This year the family paid $533 for a two-pack, even after using Mylan's coupon. They shouldn't be forced to spend over $1,000 each year just to make sure their son is safe every single day.

I recently heard from a family in Lakeville, MN, whose daughter was diagnosed with type 1 diabetes. She needs insulin on a daily basis. This means paying $100 a month for Humalog, which is a fast-acting form of insulin. This significant financial burden is on top of all the other costs they pay for their daughter's diabetes, including test strips, an insulin pump, and a glucose monitor.

Unfortunately, these families are not alone. A recent study showed that one out of four Americans whose prescription drug costs went up said they were unable to pay their bills. One out of five were forced to skip doses of their medication. Seven percent of people even missed a mortgage payment due to rising prescription drug costs. That is just not right, and our country must do better.

I think one of the most frustrating things about it, having heard about the EpiPen--all because of my role with this all during the last few weeks--is that I got screen shots of photos of this exact same product in Australia for $150 from someone who saw it online.

In Great Britain, I was on a show broadcast out of Europe, and there the host had it right there on the screen at 150 bucks. In fact, the Canadian prices--Minnesota being so close to Canada--are, on average, 50 percent of American drugs across the board.

Of course, the burden extends beyond patients, the States, and the Federal Government. Programs such as Medicare, Medicaid, and the State Children's Health Insurance Program, or SCHIP, paid roughly 41 percent of the Nation's prescription drug costs. When drug prices increase with abandon, American taxpayers are left footing the bill. So people who think, well, I don't need one of those EpiPens, they are paying for it because Medicaid is buying them because SCHIP is buying them and because Medicare is buying them.

Just last week, we learned that the company that manufacturers EpiPen and perhaps other companies have found ways to make taxpayers pay even more. Mylan marketed EpiPen like a brand-name drug, right? We heard about it this week because they just--and we will appreciate that-- introduced a generic version. However, their other version, their marketing version, controlled at least 85 percent of the market. They would claim they were having some innovations, and that is how they justified that enormous price increase from $100 to about $600 from 2009 to the present.

However, through the Medicaid Program--so, remember, they are marketing it not as a generic. Everyone knew that because they just introduced a generic. Well, in the Medicaid Drug Rebate Program they wrongly classified--we found out this week, when I sent a letter with Senator Grassley and Senator Blumenthal, that they wrongly classified EpiPen as a generic drug to the government. To the government, they claimed it was a generic drug. This classification means that Mylan has been paying lower rebates to Medicaid, increasing the burden on taxpayers.

So you think, OK, misclassification, what does that mean? Well, I can tell you what that means.

In Minnesota alone--because I specifically asked about Minnesota--in 1 year, my State overpaid an estimated $4.3 million. Why don't we multiply that out by all the States in the Union and all the years it has been happening? At this point, we do not know the total amount taxpayers have overpaid on EpiPen or how many other drugs from other companies are misclassified. That is why I have called on the Department of Health and Human Services to conduct a nationwide investigation to determine how much the misclassification of, first, EpiPen has cost States and the Federal Government, and, two, to identify other misclassified drugs from other companies.

Take these examples from the Canadian International Pharmacy Association. In the United States, a 90-day supply of ABILIFY, a drug used to treat depression and other mental health disorders, costs $2,621. In Canada, a 90-day supply of the exact same drug is only $467, which is over 80 percent cheaper.

So you see these examples of these high-priced drugs. I think one of the things we need to do--and I don't know how those are classified--is to see how these are being classified for Medicaid purposes.

Working with the Department of Justice, HHS should use all the tools it has to recover any overpayments. We have asked specifically about EpiPen. Well, Mylan paid almost $120 million--I don't think this has been that well known--back in 2009 to correct a misclassification of drugs. That was in 2009. Now we find out with EpiPen, which is about 10 percent of their profits, that this has been misclassified for years and years and years.

Misclassification is just one way the government and, as a result, taxpayers are paying more than necessary for prescription drugs. One thing is absolutely clear: We must act now to make the cost of prescription drugs more affordable for all Americans. There is not one silver bullet that will fix the problem across the board, but there are some commonsense solutions to address the problem. Today I am going to offer four such solutions, any one of which would provide real relief, but the best way is to do all of them.

The first is this. I mentioned Canada a few times. In fact, I just mentioned some of the Canadian prices for the drugs. In Minnesota we can see Canada from our porch. They spend a lot less money than we do on prescription drugs. As I mentioned, last year average prescription drug prices in Canada were less than half as expensive as they were in the United States--a price gap that has expanded significantly over the last 10 years. I mentioned a few of them--Abilify. There is Celebrex, an anti-inflammatory drug, which costs $884 in the United States for a 90-day supply. In Canada it is $180. That is nearly 80 percent less. I mentioned EpiPen, at $623. Of course, now we are going to get the rebate and the generic introduced after a public outcry, which is not the way it should be working. A two-pack in Canada costs 62 percent less, at $237.

These staggering differences are why I introduced bipartisan legislation with Republican Senator John McCain to allow Americans to safely import prescription drugs from Canada. The Safe and Affordable Drugs from Canada Act would require the FDA to establish a personal importation program that would allow Americans to import a 90-day supply of prescription drugs from an approved Canadian pharmacy.

Now, there may be other safe drug suppliers in other countries. I think we know that. But we thought, in order to get the noise down, let's focus on one country, our neighbor and one of our best trading partners, and why not just go with the friendly people of Canada for an experiment to see how this works to allow some competition by allowing these drugs in from Canada.

To provide needed safeguards, the FDA would publish an online list of approved Canadian pharmacies so people know where they can purchase safe drugs. These approved pharmacies would need to have both a brick- and-mortar and an online presence, and they must have been in business for at least 5 years. Also, these pharmacies would not be permitted to resell products purchased outside of Canada. The drugs from Canada would need to be dispensed by a licensed pharmacist and be required to have the same active ingredient, route of administration, and dosage form and strength as an FDA-approved drug.

There would also be safeguards to ensure that the personal importation program is not subject to abuse. Patients must have a valid prescription from a doctor. Certain types of drugs, including controlled substances, would not be permitted.

This is a safe and commonsense step that would save families real money and inject greater competition. We are about competition in this country. That is how we bring prices down. We have a friendly neighbor to the north that clearly has lower priced drugs than ours, and that is why Senator McCain and I have joined, along with Senators Susan Collins and Angus King of Maine and many others, to say: Let's do this. That is one solution.

A second solution is this: Pay for delay. This is of one of those things that, when I told our citizens in Minnesota about this at our State fair, they could not believe it. Beyond the drug importation legislation, we can crack down on illegal pay-for-delay deals that prevent less expensive generic drugs from entering the market.

Pay-for-delay agreements occur when a brand-name drug company--a pharmaceutical company--pays a generic drug competitor--a potential competitor--not to sell its products. This is going on in the United States of America.

My booth at the State fair is next to Bob's Snake Zoo, and sometimes people come out yelling and screaming because they get a little scared from the snakes, but this is scarier than that. In fact, pharma companies are paying generic companies to keep their products out of the marketplace.

That is why I have introduced the Preserve Access to Affordable Generics Act with Republican Senator Chuck Grassley of Iowa. This gives the Federal Trade Commission greater ability to block these anti- competitive agreements.

By allowing generic drugs to enter the market more quickly, the government would save money through the purchase of lower cost generic substitutes. That is why it is estimated that limiting these sweetheart deals would generate over $2.9 billion in budget savings over 10 years and save American consumers billions on their prescription drug costs.

Who can be against this? You literally have two competitors, one accepting money and one paying them off to keep their products off the market. The Supreme Court heard a case which made some difference. The SEC has a bunch of open cases, but it has been agreed at hearing after hearing that Senator Grassley and I have held that this would be a smart thing to do. Remember, it would save the government $2.9 billion, but it would also save the consumers.

The third good idea is allowing Medicare to negotiate prices. This is another thing where Minnesotans and Americans cannot believe this is the case, but in fact the combined incredible market power of the seniors of America has not been unleashed in terms of getting good deals for the seniors of America.

Under current law, prescription drugs for Medicare beneficiaries are provided through private prescription drug plans. The plans are responsible for crafting benefit packages and negotiating with pharmaceutical companies for prices and discounts. The Department of Veterans Affairs and Medicaid can currently negotiate drug prices with pharmaceutical companies, but the law bans Medicare from doing so. This makes no sense, and it is a bad deal not just for our seniors but for all taxpayers.

That is why I introduced the Medicare Prescription Drug Price Negotiation Act. This legislation would allow Medicare to directly negotiate with drug companies for price discounts. The Federal Government would leverage its large market share to negotiate better prices for more than 30 million seniors--that is market power--covered under Medicare Part D.

Last and finally, there is the CREATES Act. I worked on this bill with Senator Patrick Leahy, Senator Grassley, and Senator Mike Lee to introduce the bipartisan Creating and Restoring Equal Access to Equivalent Samples Act. That is a mouthful, but what it would do is to put an end to strategies that delay generic competition and cost American consumers billions of dollars.

To receive approval from the Food and Drug Administration, a generic must test its products against the brand name product to establish equivalence. You would want that. Without access to brand name samples, there can be no generic product.

For a long time, generic companies would simply buy these samples from a wholesaler. Now, some brand name companies prevent generic companies from obtaining samples, or the brand name company simply refuses to negotiate safety protocols with the generic company. In either case, the longer the brand name company can delay the generic company's approval, the longer the brand name maintains its monopoly.

The CREATES Act would allow a generic drug manufacturer facing one of these delay tactics to bring an action in Federal court in order to obtain the needed samples or stop a branded company from dragging its heels on negotiating safety protocols. The bill would also allow a Federal judge to award damages in order to deter future delaying conduct.

The Congressional Budget Office estimates that this bill would save the government $2.9 billion over 10 years. The savings to consumers and private insurance companies would likely be far greater.

So let's review this, as my colleagues come to the floor. Solution No. 1 is to allow for safe drugs from Canada. It would bring down the prices and would bring in competition. This is a bipartisan bill--Democrats and Republicans--that I have with Senator John McCain.

Solution No. 2 is to allow for more generic competition by passing the CREATES Act, which I just mentioned. That bill is with Senators Leahy, Grassley, Lee, and myself. That is a bipartisan bill that allows for samples to go quickly to the generic companies so they can actually create the drugs that will compete and bring the prices down.

Solution No. 3 is to stop those pay-for-delay deals that are unbelievable. That would bring in, according to CBO estimates, $2.9 billion over 10 years, by saying to the generics and the pharma companies: You can't pay each other to stop competition. Competition helps consumers.

And here is the final idea, which I think is the biggest idea: negotiation under Medicare Part D. This would finally take the kind of negotiation we see at the Veterans Administration, which has brought down the prices for the veterans of America, and harness the bargaining power of 39 million seniors so that we get better prices.

These are four ideas, and three of them have Democratic and Republican sponsors. I want to vote on these proposals because I believe, based on what I saw at our State fair booth--again, with just a few days of the cards we received--that these anticompetitive practices have to stop and we need to bring down the prices of prescription drugs for the hardworking Americans in this country.

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