[Congressional Record Volume 142, Number 45 (Thursday, March 28, 1996)]
[Senate]
[Pages S3133-S3134]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE DEBT CEILING LEGISLATION

  Mr. PRYOR. I thank the Chair. Mr. President, I am going to revert 
back to a measure that we just passed in the Senate, I think, less than 
an hour ago, which is the debt ceiling legislation.
  On that legislation, the distinguished Senator from Arizona, Senator 
McCain, had included an amendment he had long fought for, and I support 
that amendment very strongly, Mr. President. That was an amendment 
relative to the social security earnings test. It was on that 
particular amendment that I had told the leadership in times past that 
should that amendment come to the floor, I was going to attempt to 
amend that particular provision with a measure that would basically 
clear up, once and forever more, a mistake we made in the GATT Treaty 
legislation that we passed last year in the U.S. Senate.
  In other words, Mr. President, I was going to use that as a vehicle 
to amend this provision, which allows one particular drug company--
Glaxo, for example--to absolutely continue taking advantage of not only 
the taxpayer, but also the consumer, the aging American, taking this 
particular drug called Zantac, and prohibiting, precluding generic 
competition from coming into the marketplace.
  Mr. President, on December 13, 1995, I received a letter from my 
friend and colleague, the distinguished chairman of the Judiciary 
Committee. In the letter it says, ``Please be assured that I intend to 
honor my commitment. I will begin a hearing on pharmaceutical patent 
issues February 27, 1996, and I plan to hold a markup by the end of 
March.''
  Well, Mr. President, our friend and colleague, the distinguished 
chairman of the Judiciary Committee, Senator Hatch, did in fact hold a 
hearing on February 27, 1996. However, the markup on this particular 
matter, the Glaxo issue, has not been scheduled. It has not been 
scheduled for any time in March. To the best of my knowledge, it has 
not been scheduled for April, May, and who knows--I just hope it will 
be scheduled someday.
  But what is at issue is this fact: Every day we refuse in the Senate 
and in the House of Representatives, the other body, to correct this 
mistake that we made through this system, in not clearing up the issue 
of the patent extension for this particular drug company, and about six 
other drug companies, every day that we refuse, every day that we 
delay, Mr. President, we are fattening their pocketbooks to the extent 
of $5 million a day. That is $5 million each day that is being paid for 
by the consumer, the taxpayer, the Veterans Administration, the HMO's, 
right on down the line--any consumers that buy Zantac. We have been 
told that a generic that is ready to go into the marketplace 
immediately could absolutely walk into that marketplace today, begin 
competition with Zantac at one-half of the price of this prescription 
drug. But, Mr. President, we have refused to do it. We have had a vote 
in December, and we failed by two votes to get enough votes in this 
body to close this loophole and to state that we are no longer going to 
continue this very major windfall for one or two or three drug 
companies.
  We made a mistake. We extended all patents from 17 to 20 years in 
GATT, and we said that a generic company could market their product on 
the 17-year expiration date, if they already made a substantial 
investment and were willing to pay a royalty.
  We think that is a fair balance of interest. The other thing we did 
in GATT was that we said we are going to allow every human, every 
company, every product to have the same extension of their patent 
rights. However, we set out a perfectly illegitimate reason to give to 
a few drug companies a unique opportunity to not be included in the 
GATT legislation. So, therefore, we excluded a few pharmaceutical 
manufacturers, and we said to them that you are going to have an extra 
3 years on your patent. You are not going to have any competition 
whatsoever in this particular drug marketing and in the sales of the 
particular drug.
  During the February hearing held by Senator Hatch, the chairman of 
the Judiciary Committee, we had the evidence, we had the testimony of 
our U.S. Trade Ambassador, Ambassador Kantor, we had the Patent Office, 
and we had everyone representing this administration that we could 
think of say that this was never intended to be a part of the GATT 
Treaty. The negotiators never intended to carve out a special reason, 
or a special status, for a very few--if I might say, a handful--of drug 
manufacturers.
  Mr. President, during that testimony that day in late February of 
1996, during all of the discussions that we have

[[Page S3134]]

held on the floor of the U.S. Senate, during the committee meetings 
that have been addressing this issue, including the Finance Committee, 
there is not one scintilla of evidence--not one--that one individual 
has ever maintained that this was a deliberate act by the negotiators, 
that this was a deliberate act by the Congress of the United States to 
carve out this special exemption for a handful of drug manufacturers.
  We have competition ready to come to the marketplace. We have cheaper 
prices ready to be able to come into the marketplace to provide quality 
drugs at competitive prices--more than competitive prices. For us to 
believe that we can continue this great windfall, I think is very wrong 
indeed.
  I urge the chairman of the Judiciary Committee to proceed forthwith 
with a markup for this particular issue. He knows what the issues are.
  Mr. President, I further state that at the proper time on the proper 
legislative vehicle, I will offer to the Senate once again the 
opportunity to correct the record, once again the opportunity to set 
things right, because every day that we delay is another $5 million in 
profits to the pharmaceutical companies that make Zantac and these 
other drugs. We are delaying now about another 15 to 20 days at least 
because we are leaving on a 2-week recess tomorrow. That is another $75 
million to $80 million for these drug companies in extra profits for 
them at this time.
  We had a vote in December, and we have seen since that time and since 
that vote another $450 million of profits being given to them in a 
windfall nature.
  I think the American people certainly are calling on us to be 
responsible to set the record straight and to admit that we made a 
mistake.
  I am going to give the Senate--and hopefully the other body--an 
opportunity to correct that mistake in the very near future. I will be 
offering that on the first legislative vehicle that I see the 
opportunity to attach it to after we return from our Easter break.
  Mr. President, I yield the floor.
  Mr. HATCH. Mr. President, I was dismayed to hear the comments our 
colleague, Senator Pryor, just made with reference to the Judiciary 
Committee's deliberations on the GATT/pharmaceutical patent issue.
  My colleague was correct in stating that I wrote him a letter in 
December indicating the committee would hold a hearing and a markup on 
this issue.
  In fact, we held a hearing on February 27 on the specific issue he 
raised, and 1 week later, March 5, held another hearing on the more 
general issue of pharmaceutical patent life at which the GATT issue was 
also commented upon by a number of individuals.
  Perhaps my colleague was not aware, that, on Tuesday, I notified the 
committee that this would be a possible agenda item for markup this 
week. However, it was not possible to forecast the arduous, time-
consuming immigration markup, which extended much longer than any of us 
had anticipated. In addition, Senator Kennedy, the ranking member of 
the Labor Committee and a top member of Judiciary, expressed concerns 
about how the Judiciary Committee's agenda was conflicting with the FDA 
reform markup this week in Labor. Accordingly, at the outset of the 
Judiciary Committee's deliberations on the immigration bill this 
morning, I made the following statement:

       Finally, let me say a few words the Committee's 
     consideration of how certain GATT transition rules should 
     apply to the generic drug industry--this is the so-called 
     GATT patent issue.
       This was the subject of a lengthy floor debate on December 
     7th and a Committee hearing on February 27th.
       As I have stated on a number of occasions, my preference is 
     to achieve some sort of compromise on the issue. But this is 
     a very complex issue that involves the confluence of three 
     interrelated statutes: the GATT implementing law, the Federal 
     Food, Drug, and Cosmetic Act, and the patent code.
       I am aware that there are discussions taking place in an 
     attempt to fashion a compromise proposal. I have directed my 
     staff to continue to facilitate these discussions.
       Frankly, the Immigration Bill has taken longer that any of 
     us would have liked or could have planned for. It became 
     apparent earlier this week that we would not have time to 
     complete a GATT mark-up before Friday.
       We still have many amendments to dispose of on the 
     Immigration Bill. I also know that Chairman Kassebaum's Labor 
     Committee is in the middle of the FDA reform mark-up and that 
     Senator Kennedy wanted to closely coordinate our schedules 
     today. Other members have scheduling conflicts as well.
       For these reasons, I am announcing my intent to schedule 
     mark-up on the GATT issue when we return from recess. I would 
     like to consider a compromise that most of us can support. I 
     don't think the Pryor bill meets that test. I hope we will 
     continue working toward an agreement over the recess.

  I wish to make amply clear for the record that Senator Pryor's staff 
had informed me that he did not anticipate, nor wish for, a markup on 
this issue in Judiciary, but rather he wished to pursue a dialogue on 
the floor. Thus, I was heartened to hear his remarks just now in which 
he stated he wanted the Judiciary Committee to mark up a bill.
  Before closing, I would like to address one specific comment Senator 
Pryor made. Those who advocate change in the law argue that the 
Congress clearly intended to achieve the results of the Pryor/Chafee/
Brown amendment when we originally passed the Uruguay Round Agreements 
Act (URAA). They continue to argue to this day that it was merely a 
``technical oversight'' which led to this ``unfair'' outcome.
  I find it strange that not one person has come forward, that there 
has been not one shred of evidence, not one memo, nor paragraph of a 
memo, nor even a sentence in any document supporting Senator Pryor's 
contention.
  In fact, the Court of Appeals for the Federal circuit, a completely 
disinterested party, could find no definitive evidence on this issue at 
all. In the November, 1995 Royce decision, the Federal circuit stated:

       The parties have not pointed to, and we have not 
     discovered, any legislative history on the intent of 
     Congress, at the time of passage of the URAA, regarding the 
     interplay between the URAA and the Hatch-Waxman Act.''

  I do not wish to rehash the arguments related to the GATT at this 
time. It is an extraordinarily complex issue, and is not as simple as 
it might appear to some. It is no secret to this body that I am not 
supportive of the Pryor amendment as drafted in December.
  What I do want to emphasize is that a fair resolution of this issue 
remains my priority and, as I said at the markup this morning, I am 
hopeful we can fashion a compromise that is acceptable to the majority 
of Senators. I hope that my colleagues Senators Pryor, Brown and 
Chafee, will be willing to work with us in that regard and I look 
forward to their suggestions for areas in which a resolution can be 
crafted.

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