Sen. Klobuchar takes on the drug industry
posted Mon, 16 Jan 2012Senator Amy Klobuchar (MN) held a panel discussion on drug shortages last Thursday at Fairview Southdale Hospital in Edina, MN. RxRights’ staff were invited to attend the event.
At the event, Sen. Klobuchar charged that the pharmaceutical industry is limiting production of low-profit medicines and sometimes even paying generic drug manufacturers to keep cheap alternatives off the market. The latter tactic, known as “pay for delay,” further exacerbates the drug shortage problem.
A Star Tribune article from Friday cites Mary McHugh Morrison’s story. McHugh Morrison has cancer and was personally impacted by the shortage of Doxil, a chemotherapy drug.
The panel noted that 100 percent of U.S. hospitals have now experienced drug shortages. They also shared some striking facts and figures about prescription drugs that we thought might interest our readers (see below). In addition, we are pleased to report that Sen. Klobuchar reaffirmed her support for safe and affordable drug importation.
Prescription drug spending/costs
- U.S. health care spending = 18% of GDP (EU health care spending = 9% of GDP)
- 1 out of 5 U.S. health care dollars is spent on prescription drugs
- "Pay for delay" deals cost taxpayers $3 billion a year and cost the government $5 billion over 10 years as a buyer of prescription drugs for various programs
- If Medicare could negotiate prescription drug prices (like the Veteran’s Administration does), it would save $20 billion per year
- Brand name prescription drugs are going up 8-10 percent per year; specialty drugs (for ex. cancer meds) are going up 9-11 percent per year; generics are going down 0.5-0.7 percent per year
Aggravating factors
- In 1997, FDA regulations were loosened to allow drug manufacturers to market directly to consumers, and in the same year drug prices and spending shot up dramatically
- There are 1,700 reported pharmaceutical lobbyists in Washington, DC
- Major drug manufacturers have a profit margin of about 23 percent