Sen. Amy Klobuchar on drug reform: Big Pharma "spent hundreds of millions — and the public won"

Sen. Amy Klobuchar of Minnesota is known for a lot of things. She is the author of four books, she's a longtime civil rights defender and she made an impression on the national stage as a 2020 candidate for president, albeit briefly. But you likely don't know she was a childhood fan of Monopoly, the venerable board game.

It was her fascination with the game that led to one of her strongest and most consequential positions in the Senate, and is indirectly responsible for actions she's taken to make sure American consumers will pay less for prescription medication in the coming years. Klobuchar discussed all that and more in our recent "Salon Talks" conversation, describing in great detail the problems posed by Big Pharma's stranglehold on the drug business and by monopolies in general.

"We are paying in America 250 percent more for our drugs than you see in other industrialized nations. It's an outrageous situation," Klobuchar explained. She was part of the push to lower prescription drug prices reflected in the recent Inflation Reduction Act, President Biden's signature legislative achievement to date. One result is that beginning in 2026 Medicare officials can directly negotiate with drug companies to lower the prices of drugs for seniors. The first 10 drugs that will be included in those negotiations accounted, in 2022 alone, for more than $3.4 billion in out-of-pocket expenses paid by 9 million senior citizens.

"Not million," Klobuchar made clear. She meant $3.4 billion. "That's the kind of money when we talk about a drug like Xarelto or Eliquis, those are blood clot drugs. Nearly five million people take those drugs alone in America. Then there's diabetes drugs like Januvia and psoriasis drugs in the top 10. Basically now what will be unleashed," she concluded, is the true market power of all those senior consumers. The benefits, Klobuchar said, will go beyond seniors and help all Americans by creating lower drug prices across the board and saving consumers billions of dollars every year.

Watch my interview with Sen. Amy Klobuchar below. The following transcript has been edited for length and clarity.

I just started reading one of your books and I found out that you and I share something in common. We were both fans of Monopoly as a kid. 

As you now learn, it was actually invented by a woman who got totally screwed. She actually meant it originally as an anti-monopoly game, and then it got ripped off and made into something different, but it was her game. That was a pretty wild story.

It's a great story, but you and I took the same lesson from it. I would win that game, and I'm going, "What's next?" It seems like it's not quite fair.

You get a lot of those hotels and houses, by luck of the draw, if you land on Park Place …

That's it! We're actually here today to talk about the Biden administration's announcement on Aug. 29 that the first 10 drugs were selected for Medicare price negotiation as part of the Inflation Reduction Act. I know you had a lot to do with this. Beginning in 2026, Medicare can negotiate directly to get better deals for seniors. Can you explain to us how this works and how it affects others, not just those on Medicare?

Let's step back to explain how we got to where we are: About 20 years ago, the pharmaceutical companies, the Big Pharma companies, got a sweetheart deal written into the law, that they literally wrote, saying there couldn't be any negotiation for less expensive prescription drugs under Medicare. [Negotiation] worked great for the VA, and it should, for our veterans. They get much less expensive drugs. They negotiate, as do private entities all over the country and all over the world. But in this case, Medicare has to lock in and the drug companies get what they want. 

I've led this bill for years and years and years and worked through many different administrations and finally we have gotten this done. There were two game-changers. The first is the president and his leadership wanting to get it done. The second is that AARP actually put on ads against Big Pharma so their members who were willing to take on the pharmaceutical industry at least had a major entity that had their backs, because otherwise we were just on our own. 

The bill that passed allows first 10 drugs, then next year it'll be 15 more, then 15 more, then 20 more. These first 10 are blockbuster drugs. When you ask how it will save money, just last year 9 million seniors were taking the top 10 drugs and they spent — be ready — $3.4 billion. Not million. $3.4 billion in out-of-pocket costs. That's the kind of money when we're talking about a drug like Xarelto or Eliquis, those are blood-clot drugs. Nearly five million people take those drugs alone in America. Then there's diabetes drugs like Januvia, and there's also psoriasis drugs in the top 10. 

Basically now what will be unleashed is market power. Last time I checked, we're in a capitalist system. The market power of negotiations, instead of having Big Pharma lock in their profits. This is very exciting, and it's the beginning of what I hope will be more and more.

Also, we had insulin limits for seniors in this. This is all in the Inflation Reduction Act, a $35 per month limit. You're now seeing, and this is what I think will happen with some of these other drugs, you're seeing some pharmaceutical companies actually say, "You know what? We're going to offer the $35 insulin limit to other people who aren't seniors," because it's really hard to explain why you're charging someone $35 and someone else $100. That is going to be one of the natural outcomes. 

So to answer one piece of this that people ask me sometimes, "OK, I'm not a senior. How does this help me?" Two big ways. One, it's your taxpayer money that's helping pay all these inflated prices for these drugs, because Medicare is taxpayer-funded. That will be helpful to everyone. The second one is maybe less obvious, but when you start negotiations for the biggest drug-buying group in America, 50 million seniors, you're going to start seeing price reductions in other ways.

You and I both know Big Pharma doesn't sit still for this. They're already pushing back. You're filing an amicus brief in an important court case, Merck v. Becerra. Explain to me how they're pushing back and why you're filing that brief?

They tried so hard to stop us from passing this bill. They had three lobbyists for every member of Congress. They spent hundreds of millions of dollars, and guess what? The public won. That was in the Democratic bill, the Inflation Reduction Act. However, they didn't stop there. Now they are suing — multiple companies are suing in many different courts.

A group of us led by Peter Welch, who's the new senator but longtime congressman for the state of Vermont, he and I actually filed what's called an amicus brief and got a number of other senators on the brief that argues, in the Merck case, that argues that members of Congress have every right to do something like this. It was Congress that gave them this sweetheart deal to begin with, so of course we can change the law and take it away.

They're arguing that somehow they should be protected and that this is taking things away from them. We are of course on the side of the administration in arguing the case that this was a dutifully and carefully passed provision that came out of years of hearings about how prices for drugs for seniors and non-seniors had gone sky-high since this had been locked in.

We are paying, in America, 250% more for our drugs than you see in other industrialized nations. It's an outrageous situation. So that's the case that we make in this amicus brief, which means "friends of the court."

Yes, I've had a few of them filed on my behalf when I was fighting for my First Amendment.

Oh, so you know what it is. You like all these nice friends of the court, if they're on your side.

They're always friends of the court when they're on my side. You bring up an interesting point that goes to some of the work that you've done in your book "Antitrust: Taking on Monopoly Power From the Gilded Age to the Digital Age." You bring up something beautiful in the book about trust-busting. Some of what we're seeing now, as far as the accumulation of wealth and power by Big Pharma, is because they've of the way they've accumulated and consolidated. You've advocated for busting up these monopolies. How can we solve this problem in the future?

Have you read the 200 footnotes yet? No, not 200 footnotes. I'm sorry, 200 pages of footnotes.

I had 75 in mine.

I'm not going to quiz you on it, but OK. So yeah, it got on the New York Times bestseller list for one week.

Yeah, mine did too. I think I beat you by two weeks.

I tried to make it accessible in telling stories about the game monopoly and the like, because antitrust is a huge deal. We're seeing more and more consolidation in pharmaceuticals, in technology. Google has a 90% market share for search engines alone. 

In the past, courts got involved in these things. The AT&T breakup resulted in lower long distance rates, like way lower, along with the burgeoning cell phone market. When they started that, cell phones were the size of a brick and because of competition, we are where we are today. Sadly, the Supreme Court over the years has really limited the ability to bring these antitrust cases, so I argue in the book, and in person in my job, for some tweaks to the antitrust laws to make it easier to bring those cases by funding the [regulatory] agencies. 

When it comes specifically to pharmaceuticals, as I'm the chair of the antitrust subcommittee with Sen. Mike Lee of Utah, we were most known this year for our very interesting hearing we did together on Ticketmaster. The Big Pharma part of it is interesting, because they have monopolies in a weird way. They have their drugs and then they pay competitors, their generic competitors — no one can believe this — to take their products off the market so they don't compete. So Sen. Grassley and I have a bill called Pay for Delay — which is what the practice is called — a bill that would stop them from doing that. Another thing they do is file sham petitions to stop the approval of competitors. They also do something called "product hopping," which is where they add tiny little changes [to a drug] and then take out a new patent so that people can't compete with them. Those three practices are actually the subject of three different bills, two of which I lead with Sen. Grassley and one of which is Sen. Blumenthal and Sen. Cornyn's bill.

We've actually passed those through the Judiciary Committee, and we would love to get them to the floor as part of the momentum we're seeing out of the negotiation on drug prices, out of the insulin caps. We're finally taking on pharma. To me, the next step is this patent system, which is related to monopolies because they're basically trying to stop competitors from getting on the market or paying them to get out of the market.

You bring up a very interesting point there. One of the things that I write about is that in my business, in journalism, there has been a huge consolidation of media over the years. As you point out in your book, it's in every industry. The consolidation is pretty much in every industry.

Cat food, sunglasses.

Yeah. Media.

John Oliver did a piece a few years ago, and we actually had to call him on it. It was very funny, as he is, and it ended with him saying, "So if this all makes you want to die, good luck, because there's only three coffin makers left in the United States of America." We had to call him and tell them that one of those companies had bought one of the others, so there were only two.

The problem is in consumer prices, lack of innovation, all these things. It catches up. You don't see evidence of it immediately. But what you're seeing in the tech area, with regard to the media, is that Facebook and Google have so much power that when the media companies say, "Wait a minute, we did that piece. We should get reimbursed for our content when you put, not links, but snippets of that content up, we should be reimbursed." The media companies just go, "Oh, sorry, we're getting out of your market." That's what they did in Australia, but Australia actually took them to task. So $200 million has changed hands from the platforms to media companies, including small ones, little newspapers, radio stations. There's things going on in Canada right now, where Trudeau stood up to them. So Sen. Kennedy and I have a bipartisan bill. We've gotten it through the committee twice, and we're ready to get a floor vote.

Well, 95% of what you see, read or hear is owned by six media companies, and there are vast media deserts across the country, where vulture capitalists have swooped in and bought several hundred newspapers. But to your point, I want to bring up something that you wrote:

The freedom to buy and sell goods and succeed on your own merit has long been at the core of American antitrust policy. But more important, a century before antitrust laws were even considered, the freedom to participate in a competitive market was a central guiding tenet of the American economy. It is one of the major reasons our country was founded in the first place when a ragtag group of settlers and a group of settlers and colonists decided to start a new life in a new land.

So to those who are saying they want "unfettered capitalism," there is an answer to that, is there not? I hear this all the time: "You want socialism. You want communism." People say they want unfettered capitalism without seeing what the end product looks like.

Right. So I have one of the highest rates, No. 1 in the Senate for bipartisan bills, No. 3 for passing bills, and in this area of antitrust, I will tell you, it has been completely bipartisan, except for maybe one or two bills. It's just that we have to move these forward. So why is it that, in the past, you've seen support from conservatives on antitrust? Well, people like Adam Smith, the godfather of capitalism, there was a lot of attention paid to his work by the founding fathers. It was not only about the "invisible hand." He also warned about the unbridled power of the standing army of monopolies. That was his work.

As time went on and they didn't do something about it right away, there started to be this movement. It started in the Midwest with the farmers, the Granger movement, the unions, but at its core were Democrats and Republicans. When the Sherman Act passed, it had strong bipartisan support. It was led by a Republican out of Ohio, Sen. Sherman, who was close to Abraham Lincoln, and then Teddy Roosevelt, a Republican president, came in and was the first one to really enforce the Sherman Act. From there you had other presidents, during the Progressive Era, that actually moved forward on it. 

The history of this, including AT&T and everything, spans Democratic and Republican presidents. It spans congresses and authors of both parties. That's why I am able, especially given some of the people I work with on these bills, to make the case that this is not socialism. It's not. The companies will use that all the time. They'll say it limits innovation in Democratic states and in Republican states they'll use the socialism argument. It's crazy, they literally use opposite arguments. I think the time has come — it's not going to be tomorrow. The House will not move on some of these bills right now. They might move on the pharma bills, however. I just keep pushing the issue and eventually I will triumph.

Also, let's not act like I'm out here by myself, even if some days it feels like it. But the Justice Department under both Trump and Biden has taken this on. Some of these tech suits started under Makan Delrahim, who was head of antitrust under Trump. They're being continued now under Jonathan Kanter, who works for Merrick Garland in the Biden Justice Department. Usually success in the past has come when it's bridged different administrations. That's why I'm bullish that we're eventually going to move forward on this.