[Congressional Record Volume 142, Number 50 (Thursday, April 18, 1996)]
[Senate]
[Pages S3570-S3575]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      HEALTH INSURANCE REFORM ACT

  The Senate continued with the consideration of the bill.


          Vote on Amendment No. 3676, As Amended, As Modified

  The PRESIDING OFFICER. The question occurs on agreeing to amendment 
No. 3676, as amended, as modified, offered by the majority leader.
  The yeas and nays have been ordered. The clerk will call the roll.
  The bill clerk called the roll.
  Mr. LOTT. I announce that the Senator from Colorado [Mr. Campbell] 
and the Senator from Florida [Mr. Mack] are necessarily absent.
  The PRESIDING OFFICER (Mr. DeWine). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 98, nays 0, as follows:

                      [Rollcall Vote No. 73 Leg.]

                                YEAS--98

     Abraham
     Akaka
     Ashcroft
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Bradley
     Breaux
     Brown
     Bryan
     Bumpers
     Burns
     Byrd
     Chafee
     Coats
     Cochran
     Cohen
     Conrad
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Exon
     Faircloth
     Feingold
     Feinstein
     Ford
     Frist
     Glenn
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Harkin
     Hatch
     Hatfield
     Heflin
     Helms
     Hollings
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     McCain
     McConnell
     Mikulski
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Nickles
     Nunn
     Pell
     Pressler
     Pryor
     Reid
     Robb
     Rockefeller
     Roth
     Santorum
     Sarbanes
     Shelby
     Simon
     Simpson
     Smith
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner
     Wellstone
     Wyden

                             NOT VOTING--2

     Campbell
     Mack
       
  So the amendment (No. 3676), as amended, as modified, was agreed to.

[[Page S3571]]

  Mr. McCONNELL. Mr. President, 2 years ago, the Senate debated 
President Clinton's massive, 1,400-page proposal to radically 
restructure America's health care system. After great fan fare, this 
big-government era proposal faltered under the crushing weight of its 8 
new entitlements, 17 new taxes, 50 newly-minted government 
bureaucracies, 177 new State mandates, and nearly 1,000 new Federal 
powers and responsibilities.
  Republicans promised then that we would provide the focused, 
consumer-based health care reform plan that Americans have asked for by 
an overwhelming margin. Today, under the leadership of Senator 
Kassebaum, Senator Roth, and Senator Dole, we deliver on that promise.
  S. 1028, the Health Insurance Reform Act, focuses on alleviating key 
burdens that restrict the ability of Americans to obtain and maintain 
health care coverage--a lack of portability and the barrier of 
preexisting conditions. Today when Americans change jobs or face 
layoffs, they are at-risk of becoming uninsured or subject to 
preexisting condition exclusions. When employers are forced to 
frequently change health care plans to control costs, employees with 
medical conditions find themselves further exposed to coverage gaps.
  S. 1028 presents reforms that definitively address these problems. 
This bill limits the ability of insurers and employers to impose 
preexisting condition exclusions. It prevents insurers from dropping 
coverage when an individual changes jobs or a family member becomes 
sick. It helps small companies gain more purchasing clout in the market 
by allowing them to voluntarily form purchasing coalitions. According 
to GAO, S. 1028's portability reforms will help 25 million Americans 
each year.
  By alleviating job lock and providing States with greater flexibility 
to address the coverage needs of high-risk consumers, S. 1028 presents 
broadly supported, commonsense reforms that build upon successful State 
health care initiatives.
  I am proud to join with 64 of my colleagues in cosponsoring S. 1028's 
reasonable plan to promote private sector competition and market-driven 
innovation. This proposal fulfills Americans' request 2 years ago for 
sound, focused solutions to our Nation's health care concerns.
  S. 1028's reforms to enhance the availability of health care coverage 
is further supported by the Finance amendment's provisions to address 
the affordability of health care insurance.
  First, the Finance amendment increases the tax deduction for self-
employed who purchase health insurance by 5-percent increments from the 
current 30 percent to 80 percent.
  Second, it provides tax exemptions to State-sponsored risk pools 
which help bring down the cost of health insurance for businesses and 
high-risk individuals.
  I am particularly supportive of the long-term care provisions 
included in the Finance package. The ability to access quality, private 
long-term care insurance plans is pivotal to families facing the 
emotional and financial challenges of long-term care.
  Traditionally, a family member, most likely a wife or daughter, has 
cared for an ailing spouse or parent at home. However, today's 
pressures of work, child-rearing, and family mobility greatly restrict 
the ability of adult children to administer to the day-to-day needs of 
a chronically ill parent. In addition, the rigors of home-based care 
can have a debilitating impact on the health and well-being of a caring 
spouse.
  As America's population ages, the need for long-term care increases. 
In 1993, almost 33 million Americans were over the age of 65, and by 
2011, the elderly population is estimated to number close to 40 
million. While the opportunity for a happy and healthy retirement is 
better than ever, an October 1995 long-term care survey by Harvard/
Harris revealed that one in five Americans over age 50 is at high risk 
of needing long-term care during the next 12 months.
  Today, a variety of long-term care services are available, from help 
in cleaning one's home and getting groceries to skilled nursing care 
with 24-hour supervision. However, the means to pay for long-term care 
are still very limited and the expense can be overwhelming. For 
example, $59 billion was spent on nursing home care for the elderly in 
1993, and 90 percent was covered by out-of-pocket payments and 
Medicaid.
  The cost of paying out-of-pocket for 1 year in a nursing home is more 
than triple a senior's average annual income. Long-term care expenses 
put a lifetime of work and investment at risk. To gain Medicaid 
coverage, seniors must ``spend down'' their assets in order to meet 
State eligibility requirements. While Medicare takes care of hospital 
costs and home care, it provides only limited coverage for short-term 
stays in skilled nursing facilities.
  The medical side of long-term care has seen enormous advances over 
the years in new technologies, facilities, treatment methods, and even 
psychological studies of the effects of long-term care on patients. But 
the financing side of long-term care has simply failed to keep up, and 
as a result it is ill-prepared for seniors' future needs. Today, 
private insurance pays for less than 2 percent of long-term care costs. 
As Federal mandates for Medicaid coverage have increased, States have 
attempted to contain costs by restricting services for the elderly. 
State-imposed caps on the number of Medicaid-sponsored nursing home 
beds has separated families from their loved ones because the only 
Medicaid beds available were hundreds of miles away from their 
community. Most disturbingly, the remaining assets of a deceased 
elderly couple can be tapped through an estate recovery action to 
compensate the State for the couple's Medicaid expenses.
  Since 1990, Medicaid expenditures for long-term care have been 
increasing by almost 15 percent annually, causing costs to double every 
5 years. Medicaid's service as the sole long-term care safety net for 
middle class seniors may seriously impair the program's ability to 
serve the underprivileged. While low-income families accounted for 73 
percent of Medicaid's beneficiaries in 1993, nearly 60 percent of 
expenditures went to nursing home care and other long-term care 
services. For example, in 1993, Kentucky's Medicaid spending per 
enrollee for children was $964; while the cost for elderly 
beneficiaries was $6,540. Without relief, a harsh battle between 
generations may emerge.
  Mr. President, I am pleased that my work with Senator Roth has 
produced a sound plan in response to this critical health care need. 
The Finance amendment includes several reforms which I supported 
through my own long-term care bill: providing long-term care insurance 
with the same favorable tax treatment now available to medical 
insurance; allowing tax-free withdrawals from life insurance policies 
for terminally and chronically ill patients; and establishing sound 
consumer protections.
  Private long-term care insurance translates into quality, flexible 
care for seniors, more Medicaid funds for low-income families and the 
disabled, and essential support for families who want their loved ones 
to be safe and secure. These are priorities that all members of 
Congress share. We should not miss this opportunity to help America's 
families prepare for the challenges of long-term care.
  I regret that the Senate was unsuccessful in retaining Finance's 
proposal to provide Americans with the choice of Medical Savings 
Accounts, better known as MSAs. Today, we have witnessed a full-court 
press against MSAs by those who favor greater government management of 
health care rather than the expansion of private-sector health care 
choice. They raise the specter of how MSAs would wreck havoc across our 
Nation's health care system, and present the threat of a Presidential 
veto of any health care bill that contains MSAs.
  Mr. President, I find this attitude starkly contrasts the promotion 
of MSAs by the Democratic leadership just a few years ago. In 1992, 
Senator Daschle viewed MSAs as a means to effectively control medical 
spending by allowing employers to provide their employees with an 
annual allowance through a MSA to pay for their routine health care 
needs. During the 1994 consideration of the Clinton health care plan, 
Representative Gephardt offered a MSA plan in his leadership proposal, 
and all but one Democratic member of the House Ways and Means Committee 
supported it.

[[Page S3572]]

  Just last week, President Clinton called for an expanded use of 
retirement accounts to pay for certain health care expenses. 
Ironically, Democratic members tell us today that the President firmly 
rejects the specific establishment of a medical account to pay for 
health care costs.
  This inconsistent rhetoric blurs the potential benefits of a MSA 
option. In 17 states, 3,000 businesses as well as state and local 
governments are using MSAs. Based on a recent survey by Blue Cross/Blue 
Shield, 67 percent of employers surveyed were interested in MSAs. For 
employers who can not afford conventional coverage, and particularly 
for lower income workers, MSAs offer an affordable option to securing 
much-needed health care insurance.
  As the House health care bill contains MSAs, it is my hope that this 
provision will be included in the conference committee's final 
legislative proposal for health care reform.
  Mr. President, in sum, S. 1028 and the reforms included in the 
Finance amendment provide sensible, fundamental solutions to America's 
health care concerns. President Clinton has promised that ``the Era of 
Big Government is over.'' In fulfillment of his promise, the President 
should support S. 1028's effort to provide health care security through 
greater consumer choice, not greater Federal regulation.
  Mr. KENNEDY. Mr. President, it is a little after 5 now. We started 
off early today at 9:30. We had a number of speeches, a good debate, 
and, I think, we had two enormously significant votes here which, I 
believe, open up the way for an early conference. Hopefully, if our 
good friends in the House view the medical savings accounts the way it 
was reflected here in the Senate, we can have this bill on the 
President's desk in very short order.
  The leaders have instructed that we will stay here through this 
evening. We want to deal with these various measures. Earlier today, we 
asked Members, if they had amendments, to come up and see us. We are 
working through some, which are effectively universally accepted. We 
will try and make sure they are. If they are controversial and not 
unanimously supported, we will resist them. We want to try to move this 
along.
  We have had a good day. We still have some outstanding amendments, 
but there is no reason we cannot finish this by 8 or 9 o'clock this 
evening. So we hope the Members who have amendments will come in now. 
There are some people that will just wait and see. But Senator 
Kassebaum and I are committed to trying to get this finished up in 
short order. We will ask those that planned to offer their amendments, 
if they would, to contact us right away. Otherwise, we will move to 
third reading.
  Mr. DOLE. Mr. President, let me indicate and underscore what the 
Senator from Massachusetts just stated. We want to complete action on 
this bill. If we do, we will not have votes tomorrow. We may have 
debate on term limits, but no votes. We need to complete this to keep 
on schedule here. We still have to go back and finish illegal 
immigration. We have a day or two to make up there. Maybe we can do 
that next week, and, if not, the following week.
  I hope anybody who has amendments will come to the floor. I know the 
Senator from North Dakota wishes to speak. That will be 15 minutes. So 
anybody that has an amendment, if you can be on the floor at, say, 
5:30, it would be helpful to the managers.
  Mr. LOTT. Mr. President, I want to talk about a needed addition to 
the Kennedy-Kassebaum legislation.
  If you are an employee of a Fortune 500 company, you will probably 
make out okay under Kennedy-Kassebaum. If you are a union member, 
you'll definitely come out ahead.
  But there is not enough in Kennedy-Kassebaum to address the needs of 
working families and small businesses. How can you have health care 
portability when you cannot afford health care, like many small 
businesses cannot afford to provide for their employees?
  In the House-passed health portability bill, there was a pro-small 
business provision that I think we should include in any bill sent to 
the President.
  The provision, which the House called the Health Coverage 
Availability and Affordability Act of 1996, clarifies existing law. It 
allows small employers to join together to purchase health insurance 
for their employees. This act also included provisions allowing 
individuals to open medical savings accounts--something I support.
  But let me dwell on the small-business pooling aspect of this act. 
Right now, before we pass any bill in this Chamber, certain groups can 
pool their resources to buy lower cost insurance for their members or 
employees. These certain groups are large corporations and unions. For 
years, these groups could bargain for lower prices with insurers. If 
you are bigger, you can dictate better terms. That is just economics.
  Unions and big business also could exempt themselves from burdensome 
State regulations. Each State has a different list of benefits that 
insurers usually must pay for.
  Back in 1974, there were only 158 State-mandated benefits. Now, there 
are over 1,000 State-mandated benefits that insurers usually must 
cover. Some benefits covered in various States included massage 
therapy, acupuncture, hairpieces--and there are more exotic treatments. 
Many of these mandates are expensive. No wonder health costs are going 
up each year.
  I said that insurers usually must cover these benefits. Under the 
Federal ERISA law, unions and large corporations are exempted from some 
State rules, and can set their own benefits. They also have less 
paperwork--complying with one general standard as opposed to 50 
different State standards saves a lot of trees.
  So we see that unions and big business have it easy when it comes to 
covering their members or workers. What about the small businessperson?
  Well, the self-employed or small business owner does not have the 
bargaining power of a large corporation or union. They do not qualify 
for ERISA exemption. They have to comply fully with State regulations.
  So, says the National Federation of Independent Businesses, small 
businesses' premiums are 30 percent higher than large corporations due 
to State mandates. Also, small businesses pay 30 percent more for 
similar benefits than larger corporations.
  We talk a lot about the uninsured in this body. The Kennedy-Kassebaum 
bill is one way of addressing part of the problem. A large source of 
uninsured Americans though, is the inequity between small businesses 
and large businesses and unions. Kennedy-Kassebaum does not adequately 
address this issue.
  Any final bill should include what the House did, and allow small 
businesses to form groups to purchase full health coverage or cover 
their employees under self-insured health plans. Allowing small 
companies to join together would give them bargaining powers similar to 
big businesses or unions. They would be exempt from certain burdensome 
State mandates.
  Also, the House proposal allows States that allow small employers 
access to the small group market to opt out of the bill. The House bill 
balances the need for uniformity of laws across States, while 
maintaining States' rights.
  The House bill is a good bill, and would have an immediate effect.
  About 85 percent of the 40 million uninsured are in families with at 
least one employed worker, many of whom work for small businesses. That 
is a lot of people who could be covered if we changed the rules.
  The National Center for Policy Analysis says that one in five small 
companies that do not now offer health insurance would do so if they 
could get free of heavy State mandates.
  If these companies could have the same opportunity as big companies 
and unions, 6.3 million people would have access to health care. 
Immediately, you would take care of almost 16 percent of the uninsured 
in America. Others say 50 percent of the uninsured could probably have 
access to health care.
  Whatever the number, we can take a substantial leap toward providing 
health care for all Americans--all without new taxes or unfunded 
mandates.
  I am not the only one who thinks this is a good idea. Mr. President, 
I will soon submit for the Record two letters to the House leadership 
from the National Association of Manufacturers

[[Page S3573]]

and the National Restaurant Association in support of the House bill.
  Also, the chamber of commerce, National Association of Independent 
Businesses, National Retail Federation, and other groups supported the 
bill I have been talking about here.
  So there is much support for this, and I hope at least in conference 
we can look at this issue, and provide some relief for small business 
and the self-employed. I personally believe that we have been unfair to 
the job creators and those who want to be their own boss.
  Right now, self-employed people can only deduct 30 percent of their 
health care costs. Big businesses and unions can deduct 100 percent. 
This year, Congress passed a bill that would have raised this 30 to 50 
percent. Guess what? The President vetoed it! Is this fair? Is this 
pro-business? Is the President for entrepreneurship in this country?
  I think it is high time that the President signs the bill he vetoed, 
and we should eventually pass the House bill that expands health care 
for Americans who work for small businesses.
  The large companies and the unions have had the benefits and 
advantages for too long. If they can do it, a small businessman in 
Pascagoula should be able to cover his family and employees.
  Let us help small business in this chamber. Remember them in this 
debate we are having about health care.
  I ask unanimous consent that the letters I mentioned be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                           National Association of


                                                Manufacturers,

                                    Washington, DC, March 8, 1996.
     Hon. J. Dennis Hastert,
     Chief Deputy Whip, House of Representatives, Washington, DC.
       Dear Representative Hastert: I am delighted to hear that 
     the House Republican leadership has put together a package of 
     realistic and achievable health care reforms and will pursue 
     them as part of the 1996 legislative agenda. It is my 
     understanding that these reforms include:
       Portability reforms to ensure that employees won't be 
     denied health coverage if they change or lose their jobs;
       Medical malpractice reforms so that valuable dollars 
     intended for health care won't be wasted on frivolous 
     litigation;
       Increased health insurance deductibility for the self-
     employed to further mitigate unfair differences based solely 
     on the form of doing business;
       Reforms to facilitate small group pooling and thereby 
     improve both affordability and access for small businesses;
       Medical savings account provisions to further improve both 
     choice and affordability for all Americans; and
       Accountability provisions to curb fraud and abuse, leading 
     to lower costs throughout the system.
       These are all provisions which NAM has supported in the 
     past and continues to support. In our view, this kind of 
     targeted, incremental approach, which retains the private, 
     voluntary health system while improving and strengthening it, 
     is exactly the right approach. The NAM is therefore pleased 
     both to endorse and to enthusiastically support your plan.
           Sincerely,
                                                 Jerry Jasinowski,
     President.
                                                                    ____

                                               National Restaurant


                                                  Association,

                                   Washington, DC, March 27, 1996.
     House of Representatives,
     Washington, DC.
       Dear Representative: On behalf of the National Restaurant 
     Association and the 739,000 foodservice units nationwide, we 
     urge you to support H.R. 3103, the Health Coverage 
     Availability and Affordability Act.
       As you may know, our industry has been working to enact 
     healthcare reform legislation for years. Our research 
     continues to demonstrate that the basic reason why employers 
     and individuals do not purchase health insurance is because 
     of the cost. This legislation takes a major step forward by 
     eliminating some of the barriers that prevent people from 
     purchasing health insurance, while at the same time helps 
     keep down the cost.
       The restaurant industry is dominated by small businesses. 
     More than four out of ten eating and drinking places are sole 
     proprietorships or partnerships. Nine out of ten eating and 
     drinking places have less than 50 paid employees. Seventy-two 
     percent of eating and drinking places have sales of $500,000 
     a year or less. While many would like to offer their 
     employees health benefits, the cost has proven to be 
     prohibitive.
       In addition to addressing key concerns about portability 
     and preexisting condition limitations, H.R. 3070 would 
     increase the deductibility of health insurance for the self-
     employed from 30 percent to 50 percent. For small businessmen 
     and women--and their families--deductiblity of health 
     insurance premiums is a must. Other important components of 
     the legislation tackle medical malpractice reform, fraud and 
     abuse and administrative simplification. Also, this 
     legislation will allow small businesses to form voluntary 
     purchasing pools which would help level the playing field by 
     giving them some of the negotiating tools of large businesses 
     and reducing the cost of providing coverage.
       The National Restaurant Association is strongly opposed to 
     any amendment that would raise the cost of health coverage 
     with federal mandates or by expanding COBRA coverage. If 
     employers cannot control the costs of their own health care 
     plans because Congress mandates certain types of coverage, 
     employers will be forced to drop their coverage altogether.
       We urge you to support H.R. 3103, the Health Coverage 
     Availability and Affordability Act.
           Sincerely,
     Elaine Z. Graham,
       Senior Director, Government Affairs.
     Christina M. Howard,
       Legislative Representative.

  Mr. LOTT. Mr. President, I had an amendment that I drafted, which I 
will not offer at this time for a variety of reasons. I do want to move 
this legislation along. But in the House-passed bill, there was a pro-
small-business provision, and I think we should include that in any 
bill that we send to the President. The provision, which the House 
called the Health Coverage Availability and Affordability Act of 1996, 
clarifies existing law. It allows small business employers to join 
together to purchase health insurance for their employees.
  This act also included provisions allowing individuals to open the 
medical savings accounts that we have already dealt with this 
afternoon. I really do think there is a real justification for small 
businesses to be able to join pools and provide coverage for their 
workers. That could be a pool through the Restaurant Association, the 
National Federation of Independent Business, or within their own 
corporation.
  I realize that it is not as simple as it sounds, but it is something 
that should be done. I think it would help a lot of people now that 
work for small businesses--particularly fast food services--be able to 
get access to insurance through these pools.
  So I will be working with the conferees to try to get them to take a 
look at this and see if we cannot perhaps perfect some of the language 
that was in the House bill and allow this coverage to be available.
  I know of many instances where people are working for hamburger 
places or pizza places, where most employees have no coverage. They 
cannot afford it, and the employer cannot provide it. This would give 
them a way to get it through pools.
  I hope we will look at this approach in the conference, since it is 
in the House bill. If we cannot work it out there, let us see if we 
cannot find an opportunity to give serious consideration to this at the 
earliest opportunity.
  Mr. KENNEDY. Mr. President, we have some provisions in here to 
encourage pooling among small businesses. We would be glad to work with 
the Senator from Mississippi in reviewing that language, since the 
House has similar language, to find out how we may be able to make that 
more effective. And we will certainly be glad to visit with him prior 
to the time of the conference and see if we cannot find ways of making 
it more effective. He has identified a very important problem and 
challenge, and we attempted to make some important, modest steps, but 
very important steps, I think, to encourage this kind of activity and 
programs. He has additional ideas, and we look forward to talking with 
him.
  Mr. LOTT. I thank the Senator. I will be glad to work with him on 
this issue.


                           Amendment No. 3678

  (Purpose: To provide equitable relief for the generic drug industry)

  Mr. BROWN. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Colorado [Mr. Brown] proposes an amendment 
     numbered 3678.

  Mr. BROWN. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:


[[Page S3574]]


       At the appropriate place in title III, insert the 
     following:

     SEC.   . EQUITABLE TREATMENT FOR THE GENERIC DRUG INDUSTRY.

       (a) Sense of the Senate.--It is the sense of the Senate 
     that the generic drug industry should be provided equitable 
     relief in the same manner as other industries are provided 
     with such relief under the patent transitional provisions of 
     section 154(c) of title 35, United States Code, as amended by 
     section 532 of the Uruguay Round Agreements Act of 1994 
     (Public Law 103-465; 108 Stat. 4983).
       (b) Approval of Applications of Generic Drugs.--For 
     purposes of acceptance and consideration by the Secretary of 
     an application under subsections (b), (c), and (j) of section 
     505, and subsections (b), (c), and (n) of section 512, of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355 (b), (c), 
     and (j), and 360b (b), (c), and (n)), the expiration date of 
     a patent that is the subject of a certification under section 
     505(b)(2)(A) (ii), (iii), or (iv), section 505(j)((2)(A)(vii) 
     (II), (III), (IV), or section 512(n)(1)(H) (ii), (iii), or 
     (iv) of such Act, respectively, made in an application 
     submitted prior to June 8, 1995, shall be deemed to be the 
     date on which such patent would have expired under the law in 
     effect on the day preceding December 8, 1994.
       (c) Marketing Generic Drugs.--The remedies of section 
     271(e)(4) of title 35, United States Code, shall not apply to 
     acts--
       (1) that were commenced, or for which a substantial 
     investment was made prior to June 8, 1995; and
       (2) that became infringing by reason of section 154(c)(1) 
     of such title, as amended by section 532 of the Uruguay Round 
     Agreements Act (Public Law 103-465; 108 Stat. 4983).
       (d) Substantial Investment.--For purposes of this Act and 
     section 154(c)(2)(A) of title 35, United States Code, with 
     respect to a product that is subject to the requirements of 
     subsections (b)(2) or (j) of section 505, or of subsections 
     (b)(2) and (n) of section 512, of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355(b)(2) and (j), and 360(b)(2) and 
     (n), the submission of an application described in subsection 
     (b), and only the submission of such an application, shall 
     constitute substantial investment.
       (e) Notice.--
       (1) In general.--Unless the notice required by this 
     subsection has previously been provided, when an applicant 
     submitting an application described in subsection (b) 
     receives notice from the Secretary that the application has 
     been tentatively approved, such applicant shall give notice 
     of such application to--
       (A) each owner of the patent which is the subject of the 
     certification or the representative of such owner designated 
     to receive such notice; and
       (B) the holder of the approved application under section 
     505(b) or section 512(c)(1), respectively, for the drug which 
     is claimed by the patent or a use of which is claimed by the 
     patent or the representative of such holder designated to 
     receive such notice.
       (2) Certification of notice.--The applicant shall certify 
     to the Secretary the date that such notice is given. The 
     approval of such application by the Secretary shall not be 
     made effective until 7 calendar days after the date so 
     certified by such applicant.
       (f) Equitable Remuneration.--For acts described in 
     subsection (c), equitable remuneration of the type described 
     in section 154(c)(3) of title 35, United States Code, as 
     amended by section 532 of the Uruguay Round Agreements Act 
     (Public Law 103-465; 108 Stat. 4983) shall be awarded to a 
     patentee only if there has been--
       (1) the commercial manufacture, use, offer to sell, or 
     sale, within the United States of an approved drug that is 
     the subject of an application described in subsection (b); or
       (2) the importation by the applicant into the United States 
     of an approved drug or of active ingredient used in an 
     approved drug that is the subject of an application described 
     in subsection (b).
       (g) Applicability.--The provisions of this section shall 
     govern the approval or effective date of approval of all 
     pending applications that have not received final approval as 
     of the date of enactment of this Act.

  Mr. BROWN. Mr. President, this is not a new subject for Members of 
Congress. This is one we have considered before. I will make my remarks 
very succinct. I know other Members are waiting to speak.
  What this does is complete our consideration of GATT. In the GATT 
agreements, the provisions with regard to exclusive use of drugs was 
extended. But the GATT provided specifically for exceptions where 
people have made substantial investments in generic drugs. This goes 
along with the language in the GATT agreement. It puts us in conformity 
with what other countries are considering. It allows us to provide the 
original length of protection that was planned for drugs.
  Without action on this amendment, what we stand to have is American 
consumers lose roughly $5 million a day. The impact on U.S. consumers 
is roughly $5 million. Every day we delay enacting this means a day in 
which consumers are denied generic drug alternatives, which can save 
them $5 million a day. We have already delayed to a point where, by the 
end of this month, U.S. consumers will have lost over $700 million, and 
the price tag rises dramatically.
  A bill we had up in committee was put off. It is, thus, imperative 
that we offer this on this vehicle. It is an enormous savings to 
American consumers.
  Mr. President, it is fairness because it gives drug companies the 
same protection for which they planned on all along. But it does not 
give them a windfall, or more than what was planned.
  Mr. President, I yield the floor at this point.
  Mr. PRYOR addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. PRYOR. Mr. President, I thank the Chair for recognizing me.
  Mr. President, I am very pleased and honored to join with my friend 
from Colorado, Senator Brown, in the introduction of this amendment. 
This is the so-called GATT Glaxo amendment. The issue has been 
presented here on the floor. In fact, this is a simple way of 
correcting a major mistake that Congress made in adopting the GATT 
Treaty. It was an oversight. It has been testified to time and time 
again by Mickey Kantor--our then U.S. Trade Representative who 
negotiated this particular treaty--that it was a mistake, and that it 
needs to be corrected. The Patent Office said it was a mistake, and all 
up and down the line people agree that this was an enormous mistake 
that we need to correct at this time.
  The first time we brought this issue to a vote on the floor was 
December 7, 1995. On that particular vote, the vote cast in the Senate 
was 48 to 49. There was one abstention. There was one absent Senator. 
And since that day, since that particular delay, I think it might be 
interesting to note that very few--a handful of drug companies--Glaxo 
specifically, have made a profit, or a gross income, because of this 
variation in the GATT Treaty giving a particular exception, a 
particular benefit, to a handful of drug companies. There has been an 
extra $5 million per day in income to these companies. Since December 
7, 1995, we have seen an income of $665 million extra to these drug 
companies that is being paid out of the pockets of the consumers 
especially for drugs such as Zantac; $665 million--a windfall profit 
gift that we have given to these particular companies, and especially 
to a company called Glaxo.
  We also note that Senator Hatch wrote a letter to us, the sponsors of 
this amendment, on December 13. He said he promised hearings on 
February 27, 1996. So we waited and waited and waited around for that 
hearing. According to his promise, the distinguished chairman, Senator 
Hatch, held a hearing. By that time another $310 million had been given 
to the drug companies in a windfall profit situation.
  We waited another month--until March 28, 1996. The Judiciary markup 
was scheduled, and it was abruptly canceled. So once again there was a 
delay.

  This morning, on April 18, 1996, another Judiciary markup on S. 1277 
to correct this egregious error in GATT was held. And, when the 
Senators arrived at the markup, it was noted that a Senator had put a 
hold on the markup, that there would be no actual vote on S. 1277. And, 
therefore, Mr. President, another $665 million in profits for a very 
few drug companies.
  Now it is noted that the chairman this morning stated that if 
possible we will have a hearing in the Judiciary Committee next week on 
the 25th of April, and possibly we could mark this bill up, S. 1277.
  But in the meantime, Mr. President, the clock is running. We feel 
that this is a health bill, that this is the proper way to bring this 
bill to the attention of our colleagues, and it is the proper measure 
to attach this correction to the GATT Treaty.
  We hope that our colleagues will support this measure.
  Mr. President, I thank the Chair for recognizing me. I yield the 
floor.
  Mr. HATCH. Mr. President, although I understand that the Senator from 
Colorado plans to withdraw his amendment, I want to take this 
opportunity to express my opposition to both the Brown/Pryor/Chafee 
amendment and the idea that it should be included as part of the 
Kassebaum-Kennedy health insurance reform measure.

[[Page S3575]]

  I said it on December 7, and I say it today: ``Here we go again.''
  Four months ago, we considered the Pryor language in this chamber. 
That time, it was an amendment to the partial birth abortion ban bill 
the President just vetoed. We agreed then, by a vote of this body, that 
the Judiciary Committee should hold hearings on the issue.
  On December 13, I sent a letter to Senators Pryor, Brown, and Chafee, 
and I made a commitment to hold a hearing on February 27 and a markup 
by the end of March.
  In fact, the committee did hold the hearing on February 27, as I 
promised. I agreed to hold a markup the week of March 25, but had to 
delay that because of lengthy committee consideration of the 
immigration bills. I rescheduled the markup at the first opportunity. 
In fact, it was to have been today, but as my colleague may have heard, 
we did not get a quorum.
  I still intend to press forward expeditiously for consideration of 
this issue in the committee. It will be on the agenda for the next 
markup and that is my commitment.
  I find it ironic that proponents of this amendment are using the same 
timetable as I. There is no disagreement here. The process is moving 
forward.
  In sum, I have lived up to my word.
  As a matter of fact, I have bent over backwards to accommodate the 
interests of this body in a full and fair examination of the issue.
  We had 10 witnesses at the February 27 hearing, 5 on each side. It 
was a good session, one during which I believe we all learned a lot.
  I plan to go ahead with the markup. We will try to work out a 
resolution. I hope we will be able to. I don't think that the Brown 
amendment today meets that test.
  The GATT/pharmaceutical patent issue is unquestionably one of the 
most complicated we have seen, as it involves the confluence of patent 
law, trade policy and food and drug law and regulations.
  Its resolution has potentially enormous consequences, both on the 
future of biomedical research in this country and on the ability of 
consumers to have access to the most safe, effective, and low cost 
drugs possible.
  The proponents of this amendment argued today, as they have in the 
past, that this is a case of Congress making a simple mistake and that 
now we should act to fix this mistake by adopting this technical 
mistake.
  This is the type of argument that is often made when this body acts 
through unanimous consent.
  I wonder how many times we have debated a purported technical 
corrections bill for 3 hours--as we did on December 7--then split 
almost down the middle on a 49-48 vote that cut across party lines.
  There is no foundation for the argument that this is a simple 
perfecting amendment that would achieve a result which is clearly 
intended by Congress.
  Again today we heard the now familiar litany on the issue of intent. 
We heard about Ambassador Kantor, FDA Deputy Commissioner Bill Schultz, 
and all the other Administration representatives who attend the school 
of revisionist history on this issue.
  What has become apparent to me during this debate, a fact which has 
not been revealed today by any of my colleagues, is that the argument 
on intent has been rejected by the Court of Appeals for the Federal 
Circuit, which could find no definitive evidence of intent.
  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.

  Perhaps some day my colleagues can explain why it is that the Federal 
Circuit, a neutral judicial tribunal, is having so much trouble finding 
any evidence on the question of intent, a question that seems to lie at 
the center of this debate.
  Perhaps some day my colleagues can explain why, in their quest to 
``level the playing field,'' they have created a special benefit for 
one industry. I challenge them to identify any industry that has 
attempted, let alone succeeded, to use the GATT transition rules to 
reach the market prior to expiration of the newly extended patents. It 
just hasn't happened, and it probably will not unless anyone can 
identify acts that would not have been infringing before we enacted the 
URAA that continued and became infringing after the URAA was enacted.
  It is curious to me that a lawyer for the generic drug industry would 
argue to the Supreme Court that ``the most obvious intended beneficiary 
of this statutory licensing system was the generic drug industry . . . 
In fact, since the adoption of TRIPS and the URAA, no industry other 
than the generic drug industry has emerged as being potentially 
affected by the equitable remuneration system.''
  I will not prolong my remarks today. I look forward to exploring 
these and other issues in much greater detail at the markup.
  In closing, I want to reiterate my strong opposition to the 
amendment, and my disappointment that we are considering it here today 
prior to the Judiciary Committee's scheduled markup.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I request to be able to use the 15 minutes 
that I am allotted under the former UC that was decided by the Senate.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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