[Congressional Record Volume 142, Number 97 (Thursday, June 27, 1996)]
[Senate]
[Pages S7113-S7126]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1997
The Senate continued with consideration of the bill.
The PRESIDING OFFICER. The Senator from Arkansas is recognized.
Amendment No. 4365
(Purpose: To provide equitable relief for the generic drug industry)
Mr. PRYOR. Mr. President, I thank the Chair for recognizing me. For
the benefit of our colleagues, Mr. President, let me state what has
gone on today and what I think will go on for the next hour to hour and
a half.
Mr. President, first, I am going to be sending an amendment to the
desk in the first degree. Immediately following that introduction, the
Senator from Utah will offer his amendment in the second degree to my
first-degree amendment. We will debate these issues and vote on the
Hatch amendment some 45 minutes later. After that vote, it will be very
possible that I will offer the same amendment as my amendment in the
first degree, which we will debate for 45 minutes and then vote.
I know this is somewhat of a Byzantine situation, Mr. President, but
I have been attempting since December 7 to have an up-or-down vote in
this Chamber on my amendment. It appears I am not going to get a clear
up-or-down vote, but this is as near as possible.
Mr. President, with that explanation, hoping our colleagues
understand the nature of this issue and the procedure that we will be
following, I send my amendment in the first degree to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Arkansas [Mr. Pryor], for himself, Mr.
Chafee, Mr. Brown, Mr. Bryan, Mr. Dorgan, Mr. Leahy, and Mr.
Byrd, proposes an amendment numbered 4365.
Mr. PRYOR. 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:
At the end of subtitle F of title X add the following:
SEC. 1072. 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
[[Page S7114]]
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
Health and Human Services 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), or
(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, or in an application submitted on or after that
date in which the applicant certifies that substantial
investment was made 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) 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).
(e) Applicability.--The provisions of this section shall
govern--
(1) the approval or the effective date of approval of
applications under section 505(b)(2), 505(j), 507, or 512(n),
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355
(b)(2) and (j), 357, and 360b(n)) submitted on or after the
date of enactment of this Act; and
(2) 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. PRYOR. Mr. President, it gives me great pleasure to announce I am
submitting this amendment on behalf of myself and Senator Chafee,
Senator Brown, Senator Byrd, Senator Dorgan, Senator Leahy, and Senator
Bryan.
With that, Mr. President, I see my friend from Utah is seeking
recognition.
The PRESIDING OFFICER. The Senator from Utah.
Amendment No. 4366 to Amendment No. 4365
(Purpose: To provide equitable relief for the generic drug industry,
and for other purposes)
Mr. HATCH. Mr. President, I send an amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Utah [Mr. Hatch] proposes an amendment
numbered 4366 to amendment No. 4365.
Mr. HATCH. 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:
Strike all after the word ``Sec.'' and insert the
following:
SEC. ____. PHARMACEUTICAL INDUSTRY SPECIAL EQUITY.
(a) Short Title.--This section may be cited as the
``Pharmaceutical Industry Special Equity Act of 1996''.
(b) Approval of Generic Drugs.--
(1) In general.--With respect to any patent, the term of
which is modified under section 154(c)(1) of title 35, United
States Code, as amended by the Uruguay Round Agreements Act
(Public Law 103-465; 108 Stat. 4983), the remedies of section
271(e)(4) of title 35, United States Code, shall not apply
if--
(A) such patent is the subject of a certification described
under--
(i) section 505 (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355
(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV)); or
(ii) section 512(n)(1)(H)(iv) of such Act (21 U.S.C.
360b(n)(1)(H)(iv));
(B) on or after the date of enactment of this section, such
a certification is made in an application that was filed
under section 505 or 512 of the Federal Food, Drug, and
Cosmetic Act and accepted for filing by the Food and Drug
Administration prior to June 8, 1995; and
(C) a final order, from which no appeal is pending or may
be made, has been entered in an action brought under chapter
28 or 29 of title 35, United States Code--
(i) finding that the person who submitted such
certification made a substantial investment of the type
described under section 154(c)(2) of title 35, United States
Code, as amended by the Uruguay Round Agreements Act; and
(ii) establishing the amount of equitable remuneration of
the type described under section 154(c)(3) of title 35,
United States Code, as amended by the Uruguay Round
Agreements Act, that is required to be paid by the person who
submitted such certification to the patentee for the product
that is the subject of the certification.
(2) Determination of substantial investment.--In
determining whether a substantial investment has been made in
accordance with this section, the court shall find that--
(A) a complete application submitted under section 505 or
512 of the Federal Food, Drug, and Cosmetic Act was found by
the Secretary of Health and Human Services on or before June
8, 1995 to be sufficiently complete to permit substantive
review; and
(B) the total sum of the investment made by the person
submitting such an application--
(i) is specifically related to the research, development,
manufacture, sale, marketing, or other activities undertaken
in connection with, the product covered by such an
application; and
(ii) does not solely consist of that person's expenditures
related to the development and submission of the information
contained in such an application.
(3) Effective date of approval of application.--In no event
shall the Food and Drug Administration make the approval of
an application under sections 505 or 512 of the Federal Food,
Drug, and Cosmetic Act, which is subject to the provisions of
this section, effective prior to the entry of the order
described in paragraph (1)(C).
(4) Applicability.--The provisions of this subsection shall
not apply to any patent the term of which, inclusive of any
restoration period provided under section 156 of title 35,
United States Code, would have expired on or after June 8,
1998, under the law in effect on the date before December 8,
1994.
(c) Application of Certain Benefits and Term Extensions to
All Patents in Force on a Certain Date.--For the purposes of
this section and the provisions of title 35, United States
Code, all patents in force on June 8, 1995, including those
in force by reason of section 156 of title 35, United States
Code, are entitled to the full benefit of the Uruguay Round
Agreements Act of 1994 and any extension granted before such
date under section 156 of title 35, United States Code.
(d) Extension of Patents Relating to Nonsteroidal Anti-
Inflammatory Drugs.--
(1) In general.--Notwithstanding section 154 of title 35,
United States Code, the term of patent shall be extended for
any patent which encompasses within its scope of composition
of matter known as a nonsteroidal anti-inflammatory drug if--
(A) during the regulatory review of the drug by the Food
and Drug Administration the patentee--
(i) filed a new drug application in 1982 under section 505
of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 355);
and
(ii) awaited approval by the Food and Drug Administration
for at least 96 months; and
(B) such new drug application was approved in 1991.
(2) Term.--The term of any patent described in paragraph
(1) shall be extended from its current expiration date for a
period of 2 years.
(3) Notification.--No later than 90 days after the date of
enactment of this section, the patentee of any patent
described in paragraph (1) shall notify the Commissioner of
Patents and Trademarks of the number of any patent extended
under such paragraph. On receipt of such notice, the
Commissioner shall confirm such extension by placing a notice
thereof in the official file of such patent and publishing an
appropriate notice of such extension in the Official Gazette
of the Patent and Trademark Office.
(e) Expedited Procedures for Civil Actions.--
(1) Application.--(A) This subsection applies to any civil
action in a court of the United States brought to determine
the rights of the parties under this section, including any
determination made under subsection (b).
(B) For purposes of this subsection the term ``civil
action'' refers to a civil action described under
subparagraph (A).
(2) Superseding provisions.--Procedures adopted under this
subsection shall supersede any provision of title 28, United
States Code, the Federal Rules of Civil Procedure, or the
Federal Rules of Appellate Procedure to the extent of any
inconsistency.
(3) Procedures in district court.--No later than 60 days
after the date of the enactment of this Act, each district
court of the United States shall adopt procedures to--
(A) provide for priority in consideration of civil actions
on an expedited basis, including consideration of
determinations relating to substantial investment, equitable
remuneration, and equitable compensation;
(B) provide that--
(i) no later than 10 days after a party files an answer to
a complaint filed in a civil action the court shall order
that all discovery (including a hearing on any discovery
motions) shall be completed no later than 60 days after the
date on which the court enters the order; and
[[Page S7115]]
(ii) the court may grant a single extension of the 60-day
period referred to under clause (i) for an additional period
of no more than 30 days upon a showing of good cause;
(C) require any dispositive motion in a civil action to be
filed no later than 30 days after completion of discovery;
(D) require that--
(i) if a dispositive motion is filed in a civil action, the
court shall rule on such a motion no later than 30 days after
the date on which the motion is filed;
(ii) the court shall begin the trial of a civil action no
later than 60 days after the later of--
(I) the date on which discovery is completed in accordance
with subparagraph (B); or
(II) the last day of the 30-day period referred to under
clause (i), if a dispositive motion is filed;
(E) require that if a person does not hold the patent which
is the subject of a civil action and is the prevailing party
in the civil action, the court shall order the nonprevailing
party to pay damages to the prevailing party;
(F) the damages payable to such persons shall include--
(i) the costs resulting from the delay caused by the civil
action; and
(ii) lost profits from such delay; and
(G) provide that the prevailing party in a civil action
shall be entitled to recover reasonable attorney's fees and
court costs.
(4) Procedures in federal circuit court.--No later than 60
days after the date of the enactment of this Act, the United
States Court of Appeals for the Federal Circuit shall adopt
procedures to provide for expedited considerations of civil
actions brought under this Act.
Mr. PRYOR. Mr. President, I will speak only for a very few moments
and then I will yield time to my friend from Rhode Island, Senator
Chafee, and those others who want to enter into this debate.
I had lunch with my interns a few moments ago, Mr. President. One of
the young men at the table said, ``What is all of this GATT-Glaxo
debate all about?'' It is very hard to explain, and sometimes it is
arcane. Mr. President, the bottom line was stated by our colleague from
Illinois recently as eloquently as I know how to frame this debate. I
quote Senator Paul Simon: ``This is a classic case of the public
interest versus the special interest.'' This is indeed a classic case
of the public interest versus the special interest.
That is exactly what the issue is today on the floor. Let me
anticipate, Mr. President, if I might, and I hope I am not being
presumptuous, as to what is going to happen and what the arguments of
the Senator from Utah might be.
First, Mr. President, the Pryor-Brown-Chafee amendment closes a
loophole that every expert in this field, from our Patent Office and
the Food and Drug Administration to our U.S. Trade Representative, says
should be closed.
We are also seeking to have the prescription drug industry play by
the very same rules as every other industry in our country.
The third thing our amendment does, Mr. President, is guarantee that
American consumers have access to affordable generic drugs as was
intended by the GATT treaty. We are simply saying that affordable
generic drugs should be able to come to the marketplace without the
obstacles presented by Senator Hatch will not be allowed.
The fourth thing we do, Mr. President, is not affect medical research
in any way. It is not an issue, although we will debate that point
later. Nor does our amendment affect intellectual property rights in
any way. That has been absolutely nailed down in concrete. Since our
amendment is consistent with the GATT agreement, that is a moot
argument and is simply a scare tactic.
Finally, Mr. President, our amendment guarantees that the financial
windfall created by our mistake in the GATT agreement does not go to
the drug companies. Instead, it goes to the consumers, it goes to the
elderly, it goes to the veterans, and it goes to those who are
vulnerable and in need of assistance in buying life-sustaining
pharmaceuticals. Today, in the absence of our amendment, you will find
that these companies are gaining a multibillion dollar windfall as a
result of our error.
Let me briefly state what the so-called Hatch substitute does. It
codifies and puts our original mistake into law. It guarantees that the
American consumer never gets the affordable, generic drugs intended
under the GATT agreement.
Here is the so-called Rube Goldberg chart, Mr. President, showing
what the Hatch substitute actually does. This chart shows how the Hatch
substitute guarantees that generic competition is locked out and leaves
it up to the consumer to continue paying for the multibillion dollar
windfall to a few drug companies as a result of a congressional
mistake.
Let me emphasize that affordable generic drugs will be something that
will not be within the grasp of our American consumer should the Hatch
provision prevail. The Hatch substitute guarantees Glaxo and a few
other drug companies that they get the entire $2.5 billion windfall. It
is an enormous Christmas gift, Mr. President, that we have no business
doling out as a special favor to undeserving companies.
Finally, Mr. President, the Hatch substitute would also grant a 2-
year patent extension for a drug called Lodine, manufactured in the
State of Pennsylvania by Wyeth-Ayerst, a division of one of the major
pharmaceutical companies in the country, American Home Products. This
patent extension was added by the Judiciary Committee, Mr. President.
In addition, the Hatch substitute creates the Christmas tree of other
gifts like additional patent protection to brand name companies like
Zeneca and Merck. These provisions were, once again, added by the
Judiciary Committee. Mr. President, this is what I think is going to be
occurring during the next several minutes. I am wondering now if my
colleague from Utah would like to respond, or if my colleague from
Rhode Island would like
Mr. CHAFEE addressed the Chair.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. CHAFEE. Mr. President, first of all, I want to congratulate
Senator Pryor, the Senator from Arkansas, for his tenacity in
connection with this really outrageous situation that exists as a
result of a mistake that was made and the failure of the Congress to
correct that mistake. Senator Pryor, recognizing the cost that this is
incurring upon the U.S. Government, our State governments, and upon our
citizens--especially our citizens--has, with tremendous tenacity, tried
to correct it. I think Senator Pryor deserves all of our thanks for
this.
Now, what are we doing here? What we are trying to do today, Mr.
President, is to correct an inadvertent error made in the 1994 GATT,
General Agreement on Tariffs and Trade, that we passed. This error, as
I say, is costing consumers and our Government, not just thousands of
dollars, but millions of extra dollars, and is giving an unintended
windfall to the drug companies. It is well past time for the Senate to
act. I do hope that the Pryor amendment will be adopted.
Now, what is this amendment that we are working on this afternoon? It
is very simple. As I say, it corrects an inadvertent error. It is a
mistake that was made that kept qualified generic drugs from going to
market. What is a generic? It is something anybody can manufacture. It
keeps these generic drug manufacturers from going to market, as they
plan to do when the patent expired on these drugs, particularly those
that are manufactured, in certain instances, by Glaxo. Now, the result
has been that a handful of brand name drug companies have received a
staggering--and, as I say, this is not thousands, this is really
billions--$4.3 billion windfall at the expense of consumers, and
neither the Congress nor U.S. trade officials, nor even the companies
themselves, expected this to occur.
Now, the cost to consumers, as I mentioned, is enormous. The drugs
covered by the windfall are widely prescribed. They are used for
everyday ailments that affect millions of Americans, particularly the
elderly. Keeping the generic version of these drugs off the shelf for
up to three additional years means that Americans--especially older
Americans--are paying far more than was ever intended for these
medications.
Not only are consumers paying for this error, but so are the
governments--State governments and the Federal Government--in the form
of higher reimbursement for prescription drugs. The military, likewise,
is paying, because the military, as we all know, pays not only for
drugs for the active duty personnel, but for retirees, as well.
[[Page S7116]]
Now, we in Congress made a mistake. We all recognize that, and we
ought to fix it. In this case, the solution is obvious: Enact the
conforming amendment presented by Senators Pryor, Brown, myself, and
others, who have been working likewise.
Enacting the conforming amendment has a positive side effect, an
important one for our States. Back in December, we had a vote on this,
and because of parliamentary maneuvering, we were told repeatedly that
it was important to have a hearing on this. Ultimately, we lost by one
vote. This was going to go to a hearing. Since that vote last December,
what has happened? Well, finally a hearing took place, 3 months later,
at the end of February. What did we find out at the hearing? Well, we
found out exactly what we have been saying all along. There were no new
discoveries at this hearing. The USTR, U.S. Trade Representative, at
the time GATT was enacted, Mr. Kantor, testified: ``We did not intend
for this to happen, and we support the correction of this oversight
through the appropriate amendment to the Food, Drug and Cosmetic Act,
and the Patent Act.''
That is what Mickey Kantor, our U.S. Trade Representative, said.
Three months went by, and then two more months went by, a markup
being continuously postponed. We finally saw our bill be marked up in
the committee. What the result was, was a bill that did not correct the
loophole at all. Senator Pryor has touched on that already. I thought
it was very interesting. This is, as he showed on his chart--and
perhaps the Senator could go back to that original chart that shows
this Rube Goldberg setup--how the generic drug companies could
straighten out the situation. Well, it is ridiculous. I must say, I
praise the ingenuity of those who worked out this intricate process.
So the situation has become ludicrous. Unfortunately, it has been
more than a year since the FDA first ruled that it did not have the
power to permit these generics to go to market. A year ago, we found
out there was a problem. Instead of fixing it right away, we have been
stymied time and time again by procedural motions and talk of hearings.
We all know the time is running out.
So, Mr. President, I want to conclude by reading a couple of quotes
from newspapers who have commented on this.
This is what the New York Times had to say:
Congress finds it hard to remedy the simplest mistakes when
powerful corporate interests are at stake.
The Washington Post said:
It is doubly difficult to understand why the Senate refuses
to do anything about a windfall that, as far as the
administration is concerned, is based on nothing more than an
error of omission.
We made an error and ought to correct it.
The Des Moines Register said:
Unless the Senate gives the issue another look, hundreds of
Iowans suffering from ulcers and heartburn will each have to
fork over about $1,600 more than necessary for their
prescriptions over the next 18 months.
The NBC Nightly News said:
This is one area where Congress could help save millions of
taxpayers dollars now.
So, Mr. President, it is my hope that we will prove to our
constituents that there is not business as usual around here, that we
can and we will correct a mistake that was made and do the right thing
and fix this loophole now.
I urge my colleagues to vote against the Hatch amendment and for the
Pryor-Chafee amendment, the only bill that will close the loophole. I
thank the Chair.
Mr. SPECTER addressed the Chair.
The PRESIDING OFFICER. The Senator from Pennsylvania is recognized.
Mr. SPECTER. Mr. President, I believe that the problems presented in
the pending amendment could be solved if the parties would get together
and agree to a procedure which would provide for prompt judicial
determination as to what is a substantial investment.
I agree with my distinguished colleague from Rhode Island that this
matter ought to be cured and acted upon, because the more time that
passes, the greater the potential damages on one side or another,
depending upon whether there has been a substantial investment. That is
the issue which is outstanding, and it is my view that the generic
manufacturer should be compelled to show that it has complied with the
provisions of law and that it has, in fact, made a substantial
investment before it can enter the marketplace.
With all due respect, I do not believe that this is a matter for
editorial comment, or for generalization. Instead, it requires a hard
look at the facts and a careful analysis of the law. What we are
dealing with here is public policy to encourage pharmaceutical
companies to make very substantial investments to produce
pharmaceutical products. The other public policy consideration is to
make available generic products for the benefit of many parties, once
the patent has had a reasonable life term.
Those who benefit from generics are many. They are the senior
citizens. They are the veterans. They are the Government. Many
interested parties ought to have access to generic products.
The critical key issue is whether the generic company has made a
substantial investment or not, and it is my view that that has to be
judicially determined.
We had a very extended discussion on the Record back on June 20, just
8 days ago. It is summarized really as follows: I offered a procedure,
first in the Judiciary Committee and now incorporated into the
amendment offered by the Senator from Utah, which would provide for
expedited proceedings which could be completed within 70 days.
What is really happening when the Senator from Arkansas is offering
this amendment is that nothing is going to happen for a lot longer than
70 days. This matter has been pending for months. If the parties had
agreed to expedited judicial proceedings, which the Hatch amendment is
prepared to accept, if Senator Pryor would accept that, we could have a
determination of any generic company which had made a substantial
investment within a relatively short period of time. That generic
company could then begin to market its product.
I do not believe this matter ought to be left undefined. I think
really we ought to have a definition of what is a ``substantial
investment.'' We hear a great deal of talk about the undesirability of
judicial legislation; that we ought to have Congress act on these
matters.
My staff and I made a very concerted and extended effort to try to
define ``substantial investment'' and ``equitable remuneration,''
sitting down with parties on both sides at some substantial length.
I continue to believe that, if the parties really wanted to resolve
this and have a determination as to which generics had made a
``substantial investment'' so that those generic products would be made
available to the public at large, that could be done instead of this
extended debate.
But in the absence of that kind of an agreement, it seems to me that
what is fair is to have the generic with its burden of proof of showing
that a substantial investment had been made. And, with the additions I
have made to the pending amendment offered by the Senator from Utah, we
would have those proceedings concluded within a few short months. If
the Senator from Arkansas was willing to adopt that kind of a
procedure, he could have set the judicial mechanism in place long ago
so that we could have had a determination of this matter.
Mr. President, I reserve the remainder of my time.
Mr. PRYOR. Mr. President, I thought that Senator Hatch would be
speaking now. I think he has stepped out of the Chamber. Therefore, I
will make a few remarks in response to my friend from Pennsylvania.
First, we are not changing the GATT language. We are keeping the GATT
language as it relates to the term ``substantial investment.'' This is
simply what we are trying to do with the Pryor-Brown-Chafee substitute
amendment at this time. We are trying to basically reinforce what we
already have built into the GATT treaty, adopt that language, and apply
to the drug companies the exact same rules and definitional standards
that we apply to every other industry in our country and in our world
today who are signatories to the GATT.
I want to make a couple of more points. The Senator from Pennsylvania
has mentioned that we needed 70 days
[[Page S7117]]
in order to resolve all of this. What the Senator from Pennsylvania
must be aware of, and what the Senator from Arkansas is aware of, is
that every day that goes by these companies are getting, in my opinion,
egregious windfalls totaling $5 million extra every day that we
estimate could be used to purchase cheaper or less expensive generic
drugs.
What this is about, Mr. President, really is about a few
drug companies. For example, here is Zantac. If we had a generic
substitute today for Zantac, we would be paying about 40 percent or 50
percent less than we are paying with the brand name Zantac today in our
drugstores.
Mr. President, this is an absurd situation. It is time for us to
correct this. We hope that the Senate will avail itself of this
opportunity.
Mr. President, inadvertently a few moments ago when I sent the
amendment to the desk I did not mention our original cosponsor from
Vermont, Senator Leahy.
I ask unanimous consent that his name be added as an original
cosponsor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SPECTER. Mr. President, how much time do I have remaining?
The PRESIDING OFFICER. Five minutes.
Mr. SPECTER. Mr. President, I inadvertently referred to a judicial
time line of 70 days. I really meant 7 months.
My point is this. This controversy first arose on May 25, 1995. Had
we had in effect a procedure, which I am suggesting, for a maximum 7-
month determination regarding companies that the Senator from Arkansas
refers to, we could have had a judicial determination made on or about
January 1, 1996. It could have already been made.
This legislation is really not the best way to solve the problem.
There is a question as to what will happen in conference on this
Department of Defense authorization bill, and whether the amendment
will be adopted in the first place. There is also a question of whether
the President will veto this Department of Defense authorization bill
because it has substantially more spending than he is prepared to
accept. But, if the parties agree to a procedure where there was
expedited judicial determination as to what is a substantial
investment, we could have generic products on the market within 7
months.
If my colleague from Arkansas would engage in a brief discussion--it
has to be brief because I do not have too much time left--what would
the problem be with the generic companies that the Senator from
Arkansas refers to to accept the procedure where there would be a court
determination made within 7 months as to whether they had made a
substantial investment. Then, if the court finds in their favor, they
could sell the generic drug plus recover full damages for the period
from the time that they could not sell the generic drug until the time
the court determined there was substantial investment and they could
sell the generic drug?
Mr. PRYOR. Are we on the Senator's time?
Mr. SPECTER. We are.
Mr. PRYOR. I ask that the time be allocated to the Senator, if I
might respectfully say so.
I have a letter from Donna Shalala, the Secretary of HHS, and I quote
from the letter that has been distributed throughout the Senate this
afternoon.
Secretary Shalala says:
It will be nearly impossible to meet the substantial
investment requirement under the Hatch substitute.
She concludes saying:
It would be virtually impossible for a manufacturer to
obtain FDA approval for a generic drug product during this
transition period.
Mr. SPECTER. If the Senator from Arkansas will also focus, in the
very limited time, just on the issue of substantial investment. What
Secretary Shalala had to say, with all due respect, is totally
irrelevant. I have a very crisp question. If your generic company has
to have a determination of substantial investment within 7 months,
would that not be a lot better than this elongated, uncertain
legislative process?
Mr. PRYOR. Mr. President, I simply respond by saying the generic
companies cannot get the market because they cannot meet the
requirements and the obstacles set forth in the Hatch substitute. It is
that simple.
Mr. SPECTER. Mr. President, I want to reclaim my time. I want to
conclude my argument in the very brief time that I have left.
With all due respect for my very distinguished colleague from
Arkansas--and I do agree with Senator Chafee in complimenting Senator
Pryor for his tenacity here--this is a matter which requires a
determination of what is a substantial investment. This matter has been
pending now for more than a year--since May 25, 1995. If the parties
really wanted to resolve this, we could come to terms on expedited
judicial proceedings which Senator Hatch is prepared to accept. That
would take, of course, a maximum of 7 months. Then the generic company
would have a determination of substantial investment, and they would be
in the field. In addition, they would be entitled to collect their
damages in the interim.
I believe, as a matter of fairness, that we ought to get the judicial
determinations as promptly as possible. But we also need to have fair
protection for the substantial investments made by the pharmaceutical
pioneer companies. This expedited procedure would ensure justice for
all parties, and I submit that we ought to proceed forward with it.
I yield the floor.
Mr. PRYOR. Mr. President, I will respond by saying that this
expedited procedure and the substantial investment, is basically what
the GATT Treaty calls for and lays out the rules for every other
industry in the world today with the exception of the pharmaceutical
industry.
We left out, by mistake, a conforming amendment that would guarantee
the application of the GATT Treaty to brand name drug companies and as
a result a few companies are protected against any generic competition.
Now, who pays the bill for that? Who pays the ante? Well, we know who
pays. The consumer pays--the elderly pay, the veterans pay, the
Medicaid Program pays, the government pays. But across the board these
windfall profit dollars are going to the major drug companies, and we
are asking today for the Senate to support less expensive drugs. We are
begging today for competition in the pharmaceutical marketplace.
Just recently--and I ask that this item be placed in the Record at
the appropriate place--Glaxo cut the cost of Zantac to the German
people by 30 percent. The concern they were responding to was that a
generic was about to become available and be a competitor to Zantac in
that country--a 30-percent decrease in the cost of that drug. I wish
they would give us the same cost decrease in this country.
But what the Senator from Pennsylvania is talking about--simply wait
another 7 months for these drugs to be available in generic form--is
another $1 billion in consumer losses and another $1 billion windfall
profits for three companies in this country.
Mr. President, I do not think the Senate supports extension of this
type of benefit to a few drug companies.
I see my friend from Utah. I would like to ask how much time I have
remaining, please.
The PRESIDING OFFICER. The Senator has 1 minute 20 seconds.
Mr. PRYOR. Mr. President, I will reserve the remainder of my time.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, I would feel much more confident in the
distinguished Senator from Arkansas's comments if he were willing to
turn back all of the GATT blessings that Arkansas received. I have a
list here which gives some of the examples of extensions made under
GATT and the number of days.
Here are 25 Arkansas companies which received extensions, one of
which had its patent extended as by 713 days, another by 667 days,
another by 665. The Jacuzzi Brothers had a patent extended by 218 days.
None of their competitors has come to us and complained that they are
being cheated.
I might ask why we aren't suggesting that all those companies give
back the extensions they received? Because there were winners and
losers in the GATT. Unfortunately, the distinguished Senator from
Arkansas does
[[Page S7118]]
not happen to agree with some of the winners.
Mr. President, what you have heard this afternoon from our colleague,
Senator Pryor, admittedly is a compelling populist argument that will
have a great deal of surface appeal to some people.
Who among us would not want to lower the price of drugs used by the
elderly?
Who would not want to correct a mistake?
Who would not want to level the playing field to promote fairness
between two very important segments of a very important industry?
Unfortunately, none of these arguments are accurate. All of them are
built on a foundation of sand.
With one strong wave of reality this dream castle will come crashing
down and we will be left with the truth of the matter.
The truth is that:
There is no loophole;
There is no technical error; and
And there is no need for the over-reaching Pryor/Brown/Chafee
amendment.
Let me give you the facts.
It should be no secret to anyone in this body that GATT extended the
terms of patents. The GATT Treaty--a very important treaty that took
decades to get--was debated extensively in open session. It was
negotiated for a period of years, extending through three Presidential
Administrations. It was one of the most talked-about pieces of
legislation we have considered.
As a consequence of the GATT, the terms of about 1 million patents
were extended. I just mentioned 25 of those were in Arkansas. They came
from virtually every type of industry in the United States, including
pioneer pharmaceutical patents.
From this debate, you would think that only pharmaceutical patents
were extended, but that is far from true.
In truth, only about 100 pharmaceutical patents were extended--100
out of 1 million--100 patents out of 1 million.
Today you will hear the argument that this issue is a simple case of
Congress making an oversight in a piece of complex legislation. Again,
that is not correct.
In fact, the Food and Drug Administration has said as much. In black
and white.
Last May, the FDA's Deputy Commissioner for Policy said:
(T)his apparently is not an example of Congress having
overlooked a statutory provision it might have changed had it
been aware of its existence . . .
So, it is clear that both the executive and legislative branches
acknowledge this was not an oversight, even though we hear that over
and over again.
But, if the FDA statement were not enough of an argument for you,
consider that the courts have also reviewed this issue and have
concurred that there is no evidence that this was an oversight.
The Court of Appeals for the Federal Circuit noted last November in
the Royce case that it could not find any definitive evidence on the
question of intent.
The court said:
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.
By the way, I coauthored the Hatch-Waxman Act, and I do understand
it.
When Senator Pryor's glitzy, diversionary charts are put aside, it
seems to me that my opponents must concede that they have no hard
evidence that this is simply a case of legislative mistake. It is not.
And by the way, those charts, as much as they are curly-cued to death
are misleading. Every generic patentee must go through the process on
that chart, under the URAA. It is not just a process set up for generic
drugs.
Do not let their attempts at a revisionist history fool you. As the
Federal circuit correctly noted, the true test of legislative history
is what was stated when the bill passed, not what some are trying to
say now, after the fact.
You will also hear today that the Congress should adopt the Pryor
amendment so that generic drug manufacturers have the same protections
afforded to every other generic product manufacturer under the
transition rules.
This is the so-called level-the-playing-field argument.
The truth of the matter is that there are no reported cases of any
generic manufacturer, including those 25 in Arkansas, for any other
industry reaching--or for that matter even seeking to reach--the
marketplace through these transition rules.
It is important for all involved in this debate to understand that
under these transition rules, generic drugs have not been treated
differently than any other generic products.
Not one individual in this body can point to any other industry
except generic drugs which has used, or even attempted to use the
transition rules. In other words, out of the 1 million patents
extended, not one other industry, or for that matter not one person
from one other industry, has attempted to use the transition rules.
The playing field is level.
In fact, the generic drug industry is actually trying to tilt the
playing field in its favor.
It may surprise some in this body to see what the generic drug
industry has been arguing in court.
Let me just read to you for a few moments from a transcript of the
oral argument at the Federal circuit last October in the Royce case:
Milton Bass, a lawyer for the generic drug industry, said:
I suggest to this court that this statute in one respect is
written expressly for generic drugs and in the other respect
primarily for generic drugs.
Judge Bryson:
You think the URAA was written expressly for generic drugs?
Mr. Bass:
Absolutely, and I'll tell you why . . . I can't think of a
single act that was not infringing before June 8 that became
infringing after June 8 except for the generic drug industry.
. .
With other patents, a company is limited in what they can
spend their money for to invest before the patent expires.
Because if they use the patent, that's an act of
infringement.
So we have the generic drug industry lawyer actually arguing that the
transition rule was specifically intended for just this one industry.
That hardly sounds like a level playing field argument to me. That
sounds to me like an argument for special treatment.
And this apparently was not just one of those statements that
inadvertently slip out during the pressure of the moment in oral
argument.
The same argument was repeated by the generic company's lawyer in his
petition for writ of certiorari to the Supreme Court.
The generic drug company attorney stated to the Supreme Court:
The most obvious intended beneficiary of the 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.
So there you have it: plain evidence that contrary to what our
colleague will allege, the generic drug industry wants to tilt the
playing field toward itself.
Frankly, the Pryor amendment is nothing more than an attempt to see
that one industry, the generic drug industry, gains a special,
widespread, wholesale benefit that no other type of generic
manufacturer will ever likely get under the transition rules.
And why is this so harmful?
As much as we all sympathize with the goal of getting lower priced
generic drugs to the American consumer--particularly our elderly living
on fixed incomes, we must not act in a fashion that undermines the
incentives to invest in biomedical research.
We want both new breakthrough therapies and cheap generic
equivalents.
The issue is how best to satisfy both ends.
Over the years I have enjoyed working with Dr. C. Everett Koop,
former Surgeon General of the United States. I stood behind Dr. Koop
when many in this body were anxious to prevent him from becoming
Surgeon General. Time has proven that Dr. Koop is one of the world's
leading public health authorities.
I respect and value his opinion. I believe that the American people
know that Dr. Koop is a man of integrity and speaks his mind. Dr. Koop
wrote me a
[[Page S7119]]
letter last week which shows just how important it is to retain
incentives for biomedical research. He said:
Because of my long-standing concerns about the effect on
biomedical research of weakened patent protection, I have
been following the efforts in the Senate to roll back the
advances in intellectual property protection established by
the GATT amendment.
The right to claim ideas as property allows innovators in
any discipline to invest time and money to bring those ideas
to fruition. This is especially true in the pharmaceutical
industry, where each new medicine requires an average
investment of 12 years and $350-500 million. Stronger patent
protection bolsters the incentives for these high-risk
investments, and thus represents a significant leap forward
in our effort to preserve and improve the nation's health. It
is for this reason that I submitted testimony to the
Judiciary Committee opposing legislation to roll back the
GATT intellectual property protections for pharmaceuticals.
I think that Dr. Koop is focusing attention on the right issue when
he points out the importance that strong intellectual property laws
have on biomedical research.
Frankly, a strong case can be made by those who argue that it is
unnecessary to make any changes in our current statutory framework. But
in the spirit of compromise the Judiciary Committee passed on a 10-7
bipartisan vote compromise legislation on this issue, to which Senator
Specter is referring.
The Judiciary compromise is the text of the amendment I offer today,
with small-but-important modification suggested by Senator Specter last
week which will ensure that the process envisioned in the Judiciary
bill is a speedy one.
The Judiciary compromise is a responsible, reasonable alternative. It
allows generic drug products to reach the marketplace before the
expiration of the GATT-extended patents.
The difference between my approach and that of Senator Pryor is that
the Judiciary bill protects intellectual property by precluding the
generic's entry into the marketplace until a court has decided that a
substantial investment has been made. As with the Pryor approach, the
manufacturer must demonstrate that it has made a substantial
investment.
Mr. President, I reserve the remainder of my time.
Mr. PRYOR. Mr. President, did the Senator from Utah conclude his
statement?
The PRESIDING OFFICER. He reserved the remainder of his time.
Mr. PRYOR. Mr. President, as I have only a few moments, let me point
out that the Hatch substitute was born out of a proposal by PhRMA.
PhRMA is the group that represents the major brandname drug companies.
Every element, according to a memo of April 30, 1996, of a draft PhRMA
proposal which, as they wrote to their members, ``benefits members of
PhRMA'' wound up in the so-called Hatch substitute. That, Mr.
President, is what they are interested in. They are not interested in
benefiting the consumer, they are interested in benefiting their own--
regardless of what happens to consumers and taxpayers. This is why we
should really call this proposal the PhRMA-Glaxo substitute. I hate to
call it the Hatch substitute because I have such respect for my friend
from Utah. Certainly he would not want to have his name associated with
what he knows is an enormous boon to special interests.
Finally, the Hatch substitute has become a Christmas tree, literally
a Christmas tree, of patent extensions and special favors for a variety
of drug companies like Wyeth-Ayerst, Merck and Zeneca. Once again, I
will quote our friend, Paul Simon from Illinois. Senator Simon, who we
will miss greatly in this body, said: ``This is a classic case of the
public interest versus the special interest.''
Mr. President, that is precisely what this vote we are about to take
is all about.
I yield the floor.
Mr. HATCH. Mr. President, how much time remains?
The PRESIDING OFFICER. The Senator has 5 minutes.
Mr. HATCH. I have heard the arguments of the distinguished Senator
from Arkansas over and over.
I know he is sincere.
I know he means well.
But his arguments fixate on one or two companies.
If you were to look at this in the context of all of the companies,
the thousands of companies, that benefited from the GATT Treaty, it
reduces his arguments to nothing.
If you look at the companies from Arkansas that benefited from the
GATT Treaty, you have to ask why they should receive a benefit that
others did not? It is because they had to draw the line somewhere. The
simple truth is that there were some who won and some who did not.
The thrust of my colleague's argument is that consumers are spending
exorbitant amounts of money for Zantac because one company, Glaxo, has
had its patent expanded under the GATT Treaty.
It does not matter if Glaxo or any other company benefited under this
treaty.
The important thing is that treaty be preserved. It took decades to
bring this treaty about. It is a treaty with important intellectual
property provisions, provisions important for the whole world.
We have taken decades to get other nations to sign on to this treaty,
many of which did not want to. Some of them would like nothing better
than to undermine this treaty.
If the United States, pursuant to the Pryor amendment, were to adopt
this language and undermine this treaty, right off the bat, I think it
would send the wrong message to all the nations which would like an
excuse to undermine the treaty anyway.
If we uphold the treaty, then, it seems to me in the long run we will
save trillions of dollars for the consumers, compared to the relatively
few millions the Senator is complaining about.
In the short run, consumers are going to pay more for some products
under the treaty, because thousands of patents for all sorts of
products and technologies were extended.
Let us just be honest about it. There is a lot riding here.
The overall goal of keeping the URAA intact outweighs the concerns of
any one of us that one company or another may benefit somewhat from
this. The fact of the matter is, there are a number of companies that
benefit from this.
It is also important to note that, under the Hatch-Waxman Act, the
generic industry gets something that no other industry gets. They can
infringe the pharmaceutical pioneer companies' patents like no other
industry can. We included that provision in the best interests of
bringing pioneer drugs off patent into the marketplace as quickly as we
could.
I am proud of that Waxman-Hatch Act. I worked my guts out to have it
come to fruition.
It was negotiated, every word of it, right in my office.
It saved consumers billions and billions of dollars.
If we turn around now, just because, as the Senator argues, one or
two or even eight out of a million companies may have benefited, we
will undermine the very GATT Treaty that we fought so hard to get. That
will be a mistake.
This is not some insignificant battle between two good people here in
the U.S. Senate. This is a very, very important set of legal
principles, legislative principles, treaty principles, and intellectual
property principles.
Frankly, the arguments are not as the distinguished Senator would
portray.
At this point I would like insert in the record some examples of
patents which were extended in Arkansas. I would also like to insert a
statement by former Senator and Trade Representative Brock, who rebuts
the arguments that former Ambassador, now Secretary Kantor says. And,
finally, I would like to insert the letter from Dr. C. Everett Koop,
former Surgeon General of the United States. I ask unanimous consent to
have those printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Examples of Arkansas Patentees Granted Extensions Under GATT and Number
of Days
Abilities Unlimited, 640.
AGL Corporation, 324.
Arthur W. Reed Machine Co., 660.
BC Pausch, Inc., 471.
BEI Electronics, Inc., 535.
BEI Electronics, Inc., 240.
BEI Electronics, Inc., 419.
BEI Electronics, Inc., 466.
Carroll Herring, 713.
Citation Manufacturing Co., Inc., 454.
[[Page S7120]]
Cordell Tackle, Inc., 296.
Darrell Boyd, Kathy Sue Boyd, Mark Stodola, James Hall,
Stuart Vess, J. Russell Reinmiller, 667.
Domination Incorporated, 663.
DuraCraft Boats, Inc., 403.
Gator Products, Inc., 527.
Hustler Corporation, 189.
Jacuzzi Bros., 218.
Klipsch and Associates, Inc., 481.
Malvern Minerals Company, 410.
Norman Manufacturing Co., Inc., 611.
Roland Clardy Rogers, Ray Green Rogers, 541.
Shakespeare of Arkansas, Inc., 437.
Shakespeare of Arkansas, Inc., 552.
Sprayrite Manufactoring Company, 465.
SunPower Systems Corp., 688.
____
Brock Group, Ltd.,
Washington, DC, September 20, 1995.
Senator William V. Roth, Jr.,
Hart Senate Office Building,
Washington, DC.
Dear Senator Roth: When I first proposed international
agreements to extend intellectual property protection
worldwide under the GATT, no one believed it could be done.
Yet it was the crowning achievement of the recently
successful Uruguay Round--thanks almost solely to the
persistent and active support of the U.S. business community
and U.S. governmental leaders.
Now I hear that some pending proposals could imperil the
implementation of that agreement. I refer specifically to
legislation recently introduced by David Pryor, called the
Consumer Access to Prescription Drugs Act (S. 1191). S. 1191
creates special rules so that the generic pharmaceutical
manufacturers can take advantage of preferential treatment
under the Drug Price Competition and Patent Term Restoration
Act of 1984 (``Hatch/Waxman Act'') without adhering to the 20
year patent term negotiated during the GATT Uruguay Round
negotiations.
Proponents suggest that this legislation is only a
``technical'' correction to the Uruguay Round Agreements Act
(URAA) and neither weakens patent protection under URAA nor
diminishes the United States' ability to fight for stronger
international patent protection. I disagree! This issue is
far too important to risk on the basis of hoped-for ``good
intentions'' in nations which have never favored intellectual
property protection.
Countries around the world are still in the process of
implementing the Uruguay Round Agreement. A number have
withheld their own action to wait and see what we do. We all
know those whose prior actions have cost American inventors
and entrepreneurs billions. They will see this retreat on our
part as a ready excuse to implement their own minimalist
versions on intellectual property protection. It will be
difficult, if not impossible for the United States to force
other nations to adhere to the TRIPS agreement if we set this
unfortunate precedent.
In sum, in exchange for the hope of short term savings, the
Pryor proposal could cost all U.S. firms and workers the
enormous long term gains we worked so hard to achieve in the
Uruguay Round. That is penny wise and pound foolish. The
United States must continue to be a leader on full
implementation of every aspect of the agreement on
intellectual property in both substance and in form.
One final additional point. Domestically, this legislation
would upset the delicate balance provided for in the Hatch/
Waxman Act, which already grants generic pharmaceutical firms
special treatment in the area of patents not available to
other industries. S. 1191 would further the bias against
pioneer pharmaceutical firms.
Please give careful consideration to the negative impact
this legislation would have. I would be delighted to give you
additional specifics if it would be helpful.
Sincerely,
William E. Brock.
____
Bethesda, MD, June 20, 1996.
Hon. Orrin G. Hatch,
Chairman, Judiciary Committee, U.S. Senate,
Washington, DC.
Dear Mr. Chairman: Because of my long-standing concerns
about the effect on biomedical research of weakened patent
protection, I have been following the efforts in the Senate
to roll back the advances in intellectual property protection
established by the GATT agreement.
The right to claim ideas as property allows innovators in
any discipline to invest time and money to bring those ideas
to fruition. This is especially true in the pharmaceutical
industry, where each new medicine requires an average
investment of 12 years and $350-500 million. Stronger patent
protection bolsters the incentives for these high-risk
investments, and thus represents a significant leap forward
in our effort to preserve and improve the nation's health. It
is for this reason that I submitted testimony to the
Judiciary Committee opposing legislation to roll back the
GATT intellectual property protections for pharmaceuticals.
While I am still concerned about the impact that any change
in our intellectual property protections could have on the
incentives for medical R&D, the bill reported by the
Judiciary Committee on May 2 is a significant improvement
over the other proposals on this issue. I commend you and
your colleagues for finding a way to accommodate the varied
political interests that have been actively involved in this
debate.
By allowing for the issues of ``substantial investment''
and ``equitable remuneration'' to be resolved before generic
medicine comes on the market, the proposal mirrors the system
that has worked well since it was instituted by the Hatch-
Waxman Act. It also adheres with the requirements of the GATT
legislation itself, which requires a court to determine these
issues.
Most importantly, by requiring a court to establish
``equitable remuneration,'' the Judiciary Committee's
proposal establishes a procedure for the value of
intellectual property to be recognized. This is crucial if we
are to sustain the research that will answer patient needs
now and in the future. It is absolutely essential if we as a
society genuinely care about the nation's long-term health.
Ideally, no change would be made in the relevant laws
establishing stronger patent protections. But given the
political reality, you have done a good job of developing a
compromise that maintains some reasonable protection for the
intellectual property concepts that have made the U.S. a
leader in medical innovation.
Sincerely yours,
C. Everett Koop, M.D., Sc.D.,
Surgeon General, 1981-1989.
Mr. HATCH. With regard to my amendment, which is the text of the
Judiciary Committee bill, the court would consider expenses related to
the generic drug application and other activities, such as plant
construction and equipment purchases, made specifically in connection
with particular generic drugs.
Our compromise would prevent applicants from gaming the system by
precluding approval of applications submitted for products that come
off-patent beyond 1998.
Also, at the suggestion of Senator Biden, we have included language
that would make clear that pioneer drug patents could receive both the
restoration extension afforded by the Hatch-Waxman Act and any
additional time received under the URAA.
This is only fair, because these extensions derive from separate
statutory sources.
Mr. President, I have worked long and hard on this issue and have
endeavored to find a reasonable middle ground which will accommodate
the interest of all my colleagues. The Judiciary bill is a good
compromise, and I urge my colleagues to support the amendment.
Mr. HELMS. Mr. President, there are a number of red herrings flying
across the Senate in an effort to politicize this issue and scare
senior citizens and others. But the bottom line of this issue is
whether we will support the search for new medicines or undermine it.
Let me quote from an article that was written by Dr. C. Everett Koop
and published in the March 28, 1996, issue of The Washington Times:
Generic drugs play an important role in helping lower the
cost of medicines. But it is the pharmaceutical research
industry that discovers and develops those medicines in the
first place, investing billions of dollars in research and
development that can span decades without any guarantee of
success--an investment made possible by our system of patent
protection.
Congress should stand firm in its decision to provide
greater protection for American innovators. This protection
is a leap forward in our ongoing battle to preserve our long-
term national health.
Speaking of our long-term national health, a company that Senator
Pryor frequently criticizes, was recently awarded the highest honor
that can be bestowed on a company by the American Diabetes Association.
On June 6, Glaxo Wellcome, Inc., which is headquartered in North
Carolina, was awarded membership into the Banting Circle. According to
the announcement, the award recognizes Glaxon Wellcome's effort to cure
diabetes.
Dr. Bob Bell, vice president of research at Glaxo Wellcome, explained
that ``If we can find that gene or combination of genes that causes
diabetes, and link them to specific functions of their proteins, then
we can use this insight to develop better treatments.''
Approximately, 15 million people suffer from type II diabetes. How
much longer does the Senator from Arkansas think they should have to
wait for a better treatment or even a cure for their disease?
Ms. MOSELEY-BRAUN. Mr. President, I would like to take this
opportunity to express my support for the Hatch substitute amendment.
The Senate voted in December to require the Judiciary Committee to hold
hearings on the General Agreement on Tariffs and Trade [GATT] patent
extension provisions. As promised, the hearings were held, and a May 2
markup resulted in a vote in favor of a bipartisan compromise proposal.
[[Page S7121]]
The Hatch amendment, which represents this bipartisan Judiciary
Committee compromise, would allow the Food and Drug Administration to
approve a generic drug marketing prior to expiration of the GATT patent
extension if the manufacturer complies with the GATT implementation law
and the 1984 Hatch-Waxman law. This special exemption from patent laws
is permitted by no other sector.
The Pryor amendment on the other hand, would modify the current GATT
as it applies to patent protections for pharmaceutical products. This
amendment, which was voted down in the Finance Committee, has been
portrayed as a technical correction to the GATT agreement. It is not.
This amendment opens up an international agreement on trade to resolve
a domestic intraindustry dispute. It is short-sighted,
counterproductive, and will impede the availability of life-saving
drugs and therapies for all of us.
This is not an argument about whether the American people should
generally have access to generic drugs. I firmly believe that all
persons who are sick should have access to affordable and comprehensive
health care services. My views on the GATT patent extension issue are
in no way inconsistent with my support for health reform. In fact, I
believe present attempts to undo and reopen GATT could have an adverse
impact on the development of state of the art medicines and treatments,
which in turn deny all of us the benefit of advances in medical
science.
This argument in support of changing the GATT patent extension for
pharmaceutical products seems to rest primarily on the potential cost
savings to consumers of accelerating the availability of a generic
version of one anti-ulcer drug. Such an argument totally ignores the
fact that the anti-ulcer marketplace is highly competitive with a wide
range of choices, including generics, for patients and physicians.
There are new medicines available and coming to the market that can
cure peptic ulcer disease. The senior citizen on a fixed income will
save far more from the availability of medicines that eradicate the
cause of his/her ulcer after a few weeks of therapy than from a less
expensive version of a medicine taken daily.
On average, it takes 12 years and $360 million to bring a new drug to
market. Research-based pharmaceutical firms spend nearly $18 billion
annually on research and development. This emphasis on R&D has produced
treatments not only for common conditions and ailments but also for
life threatening diseases. The United States invests more than any
other nation on research. I have received numerous letters from patient
groups that are very concerned that modifications to GATT will
adversely impact research and development particularly on orphan
diseases for which it is not feasible to develop generic equivalents.
We must continue to increase our investment if we are to discover cures
and effective treatments for diseases that continue to plague millions
of Americans like AIDS, Alzheimer, Parkinson's Disease, and cancer.
Increased patent protection ensures that research and development
will continue in, not only the medical field but also in all areas of
innovation. This country leads the world in research and innovation, it
contributes to the public good both here and abroad and every American
benefits from our leadership. Changes to the GATT agreement that seek
to repeal patent extensions for only one class of innovations are, in
my opinion, shortsighted. Such changes will decrease private sector
revenues for research and development, compromise U.S. leadership on
intellectual property, and adversely impact the competitiveness of U.S.
companies in relation to their foreign counterparts. They do nothing to
provide greater access to affordable health care for consumers.
I have given careful consideration to all of these issues. I am
convinced that the measures included in the GATT and the Hatch
amendment will continue to increase the ability of U.S. industries to
compete while also allowing low-cost generic equivalents to reach the
market. It is for these reasons that I support the Hatch amendment and
oppose the Pryor amendment.
Mr. COATS. Mr. President, this is an enormously complicated issue
with very board implications. I understand that the Judiciary Committee
has held hearings on the issue and that as a result, voted 10 to 7 to
report out a bipartisan compromise. The compromise reached would allow
the FDA to approve a generic drug for marketing prior to expiration of
the GATT patent extension, but only after a generic drug manufacturer
demonstrated in court that they had made a substantial investment
before June 8, 1995.
This requirement is contained in both the GATT implementing law and
the generic drug approval process in the 1984 Hatch-Waxman law and
applies to all generic manufacturers. The investment of a generic drug
manufacturer would have to be more than merely the filing of an
abbreviated new drug application [ANDA] for regulatory approval with
the FDA, although the costs of an ANDA could be included.
There have been a lot of questions raised concerning how this
transition would work and why, for example, certain industries have
been singled out and required to meet special criteria before they can
bring their product to the market. In reality, under both current law
and the Judiciary Committee compromise, a generic company in any
industry must go to court to prove substantial investment, in order to
bring its product to market. There is a prevalent misconception that no
other industry has to go to court to prove substantial investment. This
is simply not true.
Others have asked why the Committee bill fails to permit expenses
related to filing of an abbreviated new drug application [ANDA] to be
counted toward the determination of a substantial investment. The
expenses related to the filing on an ANDA are unique to the generic
pharmaceutical industry. These activities would constitute patent
infringement for any other industry. The intent of the GATT transition
provisions is to allow those companies which had made capital
expenditures--like building or expanding a plant, to market their
imitator product during the patent extension period. A generic
pharmaceutical company should only benefit from the same type of
expenses available to all industries.
Finally, the opponents of the Judiciary Committee compromise argue
that the Judiciary bill treats generic pharmaceutical companies
unfairly. This could not be farther from the truth. In fact, the Hatch
compromise offers the generic pharmaceutical industry special
protections not available to any other industry. The Judiciary bill
would permit a generic pharmaceutical company to collect damages from
the innovator company if litigation between the innovator and generic
companies caused an unwarranted delay an imitator drug to the market.
No other industry is afforded a similar benefit.
Mr. President, it seems to me that the compromise reached by the
Judiciary Committee is both thorough and fair. It answers the questions
that have been raised and does so in a very well thought out manner.
This is a difficult issue and I appreciate the enormity involved in
reaching an agreement. While I would have preferred using the normal
Committee route to bring this legislation to the floor, I intend to
support it.
Mr. KENNEDY. Mr. President, I want the Senate to overwhelmingly
support the Pryor-Brown-Chafee amendment, which is the text of the
Prescription Drug Equity Act. It is difficult to understand why it has
taken over 6 months for this bill to return to the floor for a vote.
The legislation proposed by Senator Pryor, Senator Brown, and Senator
Chafee achieves the result clearly intended by the GATT treaty, and
gives patients access to expensive drugs they should have had before
now. Senate delay has cost American consumers, many living on meager
incomes, millions of dollars. We owe it to them to close the Glaxo
loophole today.
GATT was intended to give longer patent terms to all patent holders.
But, those drafting the legislation to implement GATT recognized that
longer patent terms would be an injustice for firms in many different
industries who had been acting in good faith and preparing to market
products based on the patent expiration date under prior law.
The GATT implementing law dealt with this problem through a fair
compromise, by permitting such firms to begin marketing their products
on the
[[Page S7122]]
pre-GATT expiration date, if they had made a ``substantial investment''
or commenced product activity before June 8, 1995. The firm must,
however, pay the patent holder a fair price.
Unfortunately, a mistake was made. Laws affecting all other
industries were modified to reflect the compromise, but not the
pharmaceutical industries. By an accidental oversight, Congress failed
to amend the relevant FDA law. As a result, generic drug companies that
had planned in good faith to market products in reliance on the old law
have been prevented from taking their products to market as planned.
The result is an unintended windfall worth vast sums to a handful of
brand-name pharmaceutical manufacturers. One company in particular--
Glaxo-Wellcome--has benefited immensely from this windfall. To date,
out of a total windfall of an estimated $700 million; Glaxo-Wellcome
alone has received $550 million.
What has happened since discovery of the loophole is a lesson in
greed. First, Glaxo and the other brandname manufacturers began an
intense lobbying campaign to prevent this inadvertent mistake from
being corrected. They claimed that correcting it would undercut
pharmaceutical research and development. But the windfall was
completely unexpected. Correcting the mistake will not deprive
pharmaceutical companies of any funds budgeted for research and
development. In fact, corporate profits, not research and development,
will be the prime beneficiary of the windfall.
Brand-name manufacturers also claimed that the correction would
undermine the GATT Treaty and weaken the United States in world trade.
That's nonsense. Every other industry in America is living successfully
and trading successfully under the GATT compromise, and so can Glaxo-
Wellcome and other firms that are reaping these windfall profits.
Once it became clear that the Senate would take action, brand-name
manufacturers helped shape the so-called Hatch ``compromise,'' which is
no compromise at all. Secretary of HHS Shalala has said that the Hatch
bill would be ineffective in giving generic drugs the same benefits
available to other industries under GATT. The Hatch proposal will lead
to years of litigation. It is a one-sided deal that benefits Glaxo and
other brand-name drug companies at the expense of the American
consumer. The Senate is awash in crocodile tears and campaign
contributions. This scandal has to end.
The Pryor-Chafee-Brown proposal corrects the error and achieves
fairness for generic drug companies and consumers. The generic drug
companies relied upon the law and made substantial investments to bring
their products to market in good faith reliance on the prior law. They
should not be penalized because Congress made a mistake.
Consumers should not pay more for pharmaceuticals as they are now
doing because of this mistake. Let's not force American consumers to
absorb the cost of Congress's mistake any longer. The Senate should
stop this price-gouging, support the Pryor amendment, and close the
Glaxo loophole.
Mr. PELL. I would like to clarify my understanding of some language
contained in section 2(B) of the section of the pending amendment
entitled Determination of Substantial Investment.
It is my understanding that this section of the legislation is meant
to simply set a standard for a determination of ``substantial
investment'' by a generic drug company at a level higher than the
simple completion of paperwork and testing necessary for filing of an
application submitted under section 505 or 512 of the Federal Food,
Drug, and Cosmetic Act, the so-called ANDA, to the FDA. Is that so?
Mr. HATCH. That is correct.
Mr. PELL. In that regard then, is it correct to say that under the
language of the amendment, when a company includes information in its
ANDA which pertains to the capital investments it has made in bringing
a product to the market, such as the building of plants, buildings, or
equipment or investments in developing manufacturing processes or
personnel, that that information can be fully used in court proceedings
to prove its claim of substantial investment.
Mr. HATCH. That is correct. Evidence of plant construction,
equipment, and the like are exactly the type of qualifying activities
that the Judiciary bill contemplates.
Mr. PELL. To be perfectly clear then, under the amendment, generic
drug companies will be able to use all of the information contained in
their ANDA, in addition to any other evidence they wish, to assist in
proving their claim of ``substantial investment'' in court.
Mr. HATCH. That is correct.
Mr. PELL. I thank the Senator for that clarification.
Mr. BRYAN. Mr. President, last week I joined my colleagues Senators
Pryor, Chafee, and Brown in supporting and debating this loophole
closing important amendment. I am glad that today we will get a vote on
this issue.
As I said last week, what we are talking about is money--big money--
hundreds of millions of dollars--even billions of dollars.
When that kind of money is on the table, all kinds of special
interests come forward and seek to protect themselves.
The fact is that the prescription drug industry, through inadvertence
and omission, has been given separate treatment--separate, distinct,
special treatment--that no other industry or product in America
receives.
Our amendment to correct this inadvertence has the endorsement of the
U.S. Trade Representative, the Patent Office, and the FDA plugs this
loophole.
Since last December, as these windfall profits have continued to
accumulate, seniors across this country have continued to pay more than
they should for certain prescription drugs.
The loophole is still open today. We face the same issue--each and
every day. American consumers are paying millions of dollars more than
they ought to.
So let me suggest, as I view my responsibilities as a Member of this
Chamber, it is highly appropriate that we seek to correct this inequity
and to provide the relief to which American consumers are entitled--and
to do so immediately.
When the loophole closing amendment came to the Senate floor last
fall, a critical vote was taken--and by a margin of only 1 vote--48 to
49--the Senate defeated this important amendment.
A compromise was reached after that vote. The Judiciary Committee
would review the GATT Treaty problem, and report back to the Senate
with its recommendation. This was to be a good faith effort to analyze
the issue.
It is fair to ask what the outcome of this review was?
The Judiciary Committee did report out a substitute bill to our GATT
amendment--albeit 5 months after our amendment was voted upon.
This substitute is called the Pharmaceutical Industry Special Equity
Act of 1996. It has a somewhat ironic ring to it.
Who does it benefit?
It benefits the prescription drug industry in a very special way that
is inequitable to American consumers, and particularly those on fixed
incomes.
What we really are being asked to support today is a bill that
CODIFIES--in my view codifies--the very GATT Treaty mistake our
amendment is trying to correct. A bill that continues the GATT treaty
loophole for such drug manufacturers as Glaxco-Wellcome, Inc. and its
ulcer-heartburn drug, Zantac--the world's best selling drug, which
costs twice as much as it should because of the loophole.
More than 100 drugs are being protected from generic drug competition
because of this loophole. These include the hypertension drug, Capoten,
which costs 40 percent more due to the loophole--the cholesterol
lowering drug Mevacor, the ulcer drug Prilosec, and the anti-fungal
agent drug Diflucan.
A bill that ensures that seniors across this Nation will pay more
than they should for prescriptions drugs they need and that are
essential to their health.
A bill that ensures American taxpayers will pay more than they should
to provide prescription drugs for those essential programs offered by
the Department of Defense, the Department of Veterans Administration
and other agencies of the Federal Government which purchase
prescription drugs on behalf of the clientele they serve.
A bill that creates tremendous legal barriers--in my view,
insurmountable barriers--to the generic drug manufacturing industry to
ensure that these
[[Page S7123]]
manufacturers cannot bring to the marketplace lower priced prescription
drugs.
A bill that ensures the prescription drug manufacturers keep their
$2.3 billion windfall, plus a bill that extends special patent
extensions for two brand name drug companies--Zeneca and Wyeth Ayerst
Laboratories which received a 2-year patent extension for Lodine, its
anti-inflammatory medicine.
So what has occurred here?
In my view, we have a situation worse than before.
Not only do some prescription drug companies retain their windfall
profits--they are protected from nearly any possibility that any
generic manufacturer will be able to compete against them during the
extended patent term.
Generic drug manufacturers will be required to prove a substantial
investment before being allowed to compete against any brand name drug.
The key change, however, is that this substantial investment
requirement is being defined differently to ensure that generic
manufacturers cannot--as a practical matter--compete against any brand-
name drug benefiting from the extended patent period under the GATT
Treaty.
Under the substitute bill, substantial investment is defined much
differently. In addition, generic manufacturers are required to make a
determination of equitable remuneration to the brand name manufacturer
before any generic drug to be manufactured.
You do not have to be a rocket scientist to recognize those who are
enjoying these windfall profits are not going to be eager to agree as
to what equitable remuneration may be. In effect, we create a lawyers'
field day to debate what is, in fact, equitable remuneration.
The effect of the change is, first, it will be virtually impossible
for any generic manufacturer to meet the new substantial investment
standard.
Second, it will mean generic manufacturers will be tied up in court
proving substantial investment and what is equitable remuneration
before they can bring any generic drug to be marketed.
Two obstacles, two hurdles, two barriers that, as a practical matter,
are going to be virtually insurmountable.
Who is being forgotten? Who gets hurt by this change?
Those Americans particularly that are on a fixed income. That is
primarily our senior community. They have been paying and will continue
to pay more than they should--for lack of a prescription drug
alternative.
I am puzzled as to why anyone believes it is equitable to force
seniors--many on very limited incomes--to pay more for a drug than they
should so prescription drug manufacturers can continue to reap the
windfall profits that this loophole has created.
I must say I am astonished by the provisions of this Pharmaceutical
Industry Special Equity Act--a misnomer if there ever was one. Its a
special interest provision.
My colleagues who talk the virtues of competition in the marketplace
surely must find this substitute bill to be a bit beyond the pale.
I remind my colleagues that there is no reason to allow a limited
number of prescription drug companies an unintended windfall profit to
the detriment of all Americans who depend upon prescription drugs in
order to sustain their health.
Seniors, veterans, and the most vulnerable in our country cannot
fight the brand name pharmaceutical industry on their own. They deserve
and need our protection from an industry that is trying to ``codify'' a
mistake to ensure their windfall profit margin.
I hope my colleagues can see both this loophole for the mistake it
is--and this substitute bill for the even larger mistake it is.
We have the ability to end this inequity now. The vote you cast today
is very clear. You vote for the pharmaceutical industry windfall, or
you vote for seniors and all consumers who need fair drug prices.
Please join me in stopping this travesty by supporting this amendment.
Mr. BYRD. Mr. President, Senator Pryor has offered an amendment, of
which I am a cosponsor, that would correct an unintended loophole
created in the legislation implementing the General Agreement on
Tariffs and Trade [GATT]. It is estimated that the loophole will
ultimately result in a windfall profit of approximately $2.5 billion to
certain drug companies. Congress must take the responsible course of
action and correct its mistake by passing the Pryor amendment.
Time is running out to correct this matter. Each day of inaction
results in increased costs to consumers. In addition, to those who
argue that this is not the appropriate vehicle, this amendment will
result in savings to the Department of Defense [DOD] via the cost of
prescription drugs purchased through DOD health programs.
How did this loophole come about? When Congress enacted the Uruguay
Round Agreements Act [URAA], the legislation implementing GATT, which I
opposed, it extended all patent terms from 17 years from date of
approval to 20 years from the filing date. In addition, the legislation
allowed generic companies to market their products as of the 17-year
expiration date if they had made a substantial investment and would pay
a royalty to the patent holder. The carefully constructed transition
rules were meant to apply to all industries. However, because
conforming language to the Federal Food, Drug, and Cosmetic Act was
inadvertently omitted, this provision does not apply to the generic
pharmaceutical industry. The result is that the drug industry is the
only industry that is shielded from generic competition under GATT
during the extended patent term.
The U.S. negotiators indicated that it was not their intent to
exclude the pharmaceutical industry from this provision, and that the
omission of the conforming language was an oversight. According to
former-U.S. Trade Representative Mickey Kantor in a letter to Senator
Chafee,
This provision [the transition rules] was written neutrally
because it was intended to apply to all types of patentable
subject matter, including pharmaceutical products. Conforming
amendments should have been made to the Federal Food, Drug
and Cosmetic Act and Section 271 of the Patent Act, but were
inadvertently overlooked.
This oversight means consumers are paying more for their drugs than
would otherwise have been the case. If generic drug companies cannot
bring their versions of drugs to market under the transition rules,
consumers will be forced to continue to pay more for their
prescriptions. As I stated previously, nationwide, it is estimated the
total cost to consumers may be $2.5 billion. It has already cost
consumers a great deal. The loophole is taking money out of the pockets
of consumers and adding additional costs to public health care programs
that are currently putting a strain on Federal and State budgets. We
should not delay passing this legislation any longer.
Senior citizens are especially impacted by this Congressional
oversight. Although seniors comprise 12 percent of the population, they
use one third of all prescription drugs. At the same time, seniors live
on fixed incomes and oftentimes experience difficulty in affording
their prescriptions. It is outrageous that Congress would worsen the
situation of seniors, and others who depend on prescription drugs, by
failing to enact legislation to correct this Congressional oversight.
Mr. President, this situation can easily be remedied by adopting the
Pryor amendment. I urge my colleagues to support the Pryor amendment
and to oppose the substitute bill reported by the Judiciary Committee.
The Judiciary Committee version does not fix the loophole. It will not
ease the burden this unintentional oversight by the Congress has placed
on the elderly, veterans, consumers, and taxpayers. The Secretary of
Health and Human Services, in a letter to Senator Pryor on the effect
of the Judiciary Committee bill, states,
In brief, despite the bill's declared intent to eliminate
the unequal treatment of generic drugs created by the URAA,
S. 1277 as ordered reported would be ineffective in affording
generic drugs the same transitional period benefits given to
other technologies, leaving the generic drug industry for all
practical purposes at the same disadvantage as under current
law.
The Judiciary Committee bill would result in lengthy litigation
keeping generic drugs off the market and the costs of certain
prescription drugs high for consumers. Whereas other industries may go
to market first and then have the questions regarding substantial
investment and equitable remuneration decided by the courts, the
[[Page S7124]]
substitute would require these issues to be determined before a generic
drug could be marketed. In addition, although the legislation
implementing GATT does not define substantial investment, the
substitute includes a definition of substantial investment that is
extremely onerous. The bottom line is that the substitute will not
remedy the situation and consumers will be left to pay the price as
they are now because of Congress' failure to adopt the Pryor amendment
when it was brought up last December. Let us not squander this
additional opportunity Senator Pryor has given the Senate to do the
right thing. I urge my colleagues to pass the Pryor amendment.
Mr. KEMPTHORNE. Mr. President, the issue of pharmaceutical patents
under the General Agreement on Tariffs and Trade [GATT] has been under
review by this body for some time. Well respected individuals--from the
Senate, from the Administration, and from the private sector--weighed
in on both sides of the issue. Last December, I joined my Senate
colleagues in voting to send this matter to the Judiciary Committee for
hearings because I felt many questions remained unanswered about how
certain patents were treated under the GATT. With no clear legislative
history to follow, I believed--and still believe--it was important for
Congress to carefully review the issue and get to the heart of the
matter.
I am pleased to note that my distinguished colleague from Utah,
Senator Hatch, followed through on his commitment to hold hearings on
pharmaceutical patents and the GATT, just as I knew he would. With his
long history on addressing issues of concern to the generic drug
industry, I had no question that he would do all he could to get to the
bottom of this issue. The subsequent hearings were sorely needed so
that the Senate could adequately consider the ramifications of the
various courses of action proposed on this matter. Taking some time to
adequately review an issue leads to better legislation and better
results for Americans. This is a serious matter, and deserved serious
and thoughtful review.
Since those hearings concluded I have carefully reviewed the record
on this complex issue. Based on this information, I have concluded that
the question at hand is indeed the result of a drafting oversight in
the GATT implementing language, and, as a result, I will support the
amendment offered by my colleague from Arkansas, Senator Pryor.
I believe very valid concerns were raised when this amendment was
first introduced. Because of this, it is not an easy task to choose
between amendments offered by my two distinguished colleagues. In this
case, however, I feel the right decision is the one which restores
fairness to this matter. The generic drug manufacturers moved ahead
with their plans on the good faith effort that they would be treated
the same as other industries with similar circumstances. They believed,
in good faith, that under the GATT they would be able to proceed to
market, with some new limitations, on the same timetable which existed
prior to Senate passage of the GATT implementing legislation. Only the
Pryor amendment allows us to bring about what I believe is the fairest
possible solution.
This is the primary reason why I cannot support the amendment being
offered by the Senator from Utah. I understand and respect his concerns
on this issue. I, however, am concerned about whether under his
amendment, the generic pharmaceuticals will be able to get to market in
a timely fashion. While the Senator's amendment offers some relief to
the generic drug makers if they are unnecessarily prevented from going
to market, I do not believe it truly restores fairness. It also does
not offer any protection to the consumers who will be saddled with
higher drug prices during the interim.
Another issue which must be addressed is that of medical research. I
have heard the concern expressed that if the Pryor amendment becomes
law future research into new and improved pharmaceuticals will not
occur or will be significantly reduced. I simply do not believe this is
true. Even if the Pryor amendment is adopted, the research-based
pharmaceutical manufacturers will benefit more than if the GATT had not
been approved. The claim that only the granting of an exclusive patent
extension will guarantee future advancements in pharmaceutical research
is an argument I do not accept.
The Pryor-Brown-Chafee amendment will get certain generic medications
into the hands of the people within the time frame all parties
reasonably expected prior to the passage of the GATT implementing
legislation, saving consumers and the Government millions of dollars in
the process. For this reason, I believe the amendment is the correct
course of action for the Senate to follow.
Mr. HATCH. Mr. President, how much time do I have left?
The PRESIDING OFFICER. The Senator's time has expired.
Mr. HATCH. I yield the floor.
Mr. THURMOND addressed the Chair.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. THURMOND. Mr. President, I ask unanimous consent for 4 minutes to
make final remarks on this amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. THURMOND. Mr. President, I rise as a cosponsor and in support of
the second degree amendment offered by Senator Hatch. The underlying
Pryor first degree amendment concerns the complex interrelationship
among the GATT Treaty, the Federal Food, Drug and Cosmetic Act, and the
Patent Code.
We considered this very issue last December on the Senate floor when
Senator Pryor attempted to have this matter attached to the bill to ban
partial-birth abortions. The Senate voted at that time to have the
Judiciary Committee--that is the Committee with proper jurisdiction--to
consider this important issue. The Judiciary Committee held a
comprehensive hearing on this matter on February 27 of this year and
Senator Pryor testified at that time.
Mr. President, following the hearing in the Judiciary Committee, of
which I am a member, the committee amended a proposal similar to
Senator Pryor's amendment with a bipartisan compromise. The Judiciary
Committee approved the compromise. This bill will be available for
Senate floor consideration in due course. It would be most appropriate
to consider Senator Pryor's amendment at that time. The Department of
Defense authorization bill is not the proper vehicle on which to debate
the Pryor amendment. Unfortunately, we are now having to debate this
contentious intellectual property issue and I am compelled to support
the second degree amendment offered by the chairman of the Judiciary
Committee, Senator Hatch.
The second-degree amendment reflects the bipartisan compromise agreed
upon by the Judiciary Committee. Senator Hatch has spoken on the
practical effect of this amendment which he drafted with others when
this matter was before his Committee.
Mr. President, as I noted earlier, this is a very difficult and
complex issue which addresses how certain transition rules contained in
the Uruguay Round Agreements Act apply to the pioneer pharmaceutical
patents which have been extended by the act. The overall approach to
this issue is to find an appropriate balance to encourage research and
development of breakthrough innovator drugs while making low cost
generic equivalents available to the public. The Judiciary Committee
approved one approach which many believe reaches the goal of
encouraging research and development but also expediting their generic
equivalents to the marketplace.
It would be my preference to debate the Pryor amendment when the full
Senate turns to consideration of the bill recently approved by the
Judiciary Committee. That would seem to me to be the appropriate time
to consider the Pryor amendment. Yet, here we are on the Defense bill
debating the Pryor amendment in a compressed manner that does not avail
itself to full discussion. I urge my colleagues to support the second-
degree amendment which is essentially the compromise language already
approved by the Judiciary Committee.
Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Abraham). The question is on agreeing to
the amendment of the Senator from Utah, amendment No. 4366.
Mr. HATCH. I ask for the yeas and nays.
[[Page S7125]]
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on agreeing to amendment No.
4366 of the Senator from Utah. The yeas and nays have been ordered. The
clerk will call the roll.
Mr. SIMPSON (when his name was called). Present.
Mr. NICKLES. I announce that the Senator from Oregon [Mr. Hatfield]
is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 53, nays 45, as follows:
[Rollcall Vote No. 179 Leg.]
YEAS--53
Abraham
Ashcroft
Bennett
Biden
Bond
Burns
Campbell
Coats
Cochran
Coverdell
D'Amato
DeWine
Dodd
Domenici
Faircloth
Frahm
Frist
Gorton
Gramm
Grams
Grassley
Gregg
Harkin
Hatch
Heflin
Helms
Hollings
Hutchison
Inhofe
Johnston
Kassebaum
Kyl
Lautenberg
Lieberman
Lott
Mack
McConnell
Mikulski
Moseley-Braun
Murkowski
Nickles
Nunn
Pell
Rockefeller
Roth
Santorum
Shelby
Specter
Stevens
Thomas
Thompson
Thurmond
Warner
NAYS--45
Akaka
Baucus
Bingaman
Boxer
Bradley
Breaux
Brown
Bryan
Bumpers
Byrd
Chafee
Cohen
Conrad
Craig
Daschle
Dorgan
Exon
Feingold
Feinstein
Ford
Glenn
Graham
Inouye
Jeffords
Kempthorne
Kennedy
Kerrey
Kerry
Kohl
Leahy
Levin
Lugar
McCain
Moynihan
Murray
Pressler
Pryor
Reid
Robb
Sarbanes
Simon
Smith
Snowe
Wellstone
Wyden
ANSWERED ``PRESENT''--1
Simpson
NOT VOTING--1
Hatfield
The amendment (No. 4366) was agreed to.
Mr. THURMOND. Mr. President, I move to reconsider the vote.
Mr. HATCH. Mr. President, I move to lay it on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. Under the previous order, the Senator from
Arkansas is to be recognized.
Mr. PRYOR. Mr. President, earlier today the Senate agreed to a
unanimous-consent request agreement whereby at this point I would be
recognized to offer the Pryor-Chafee-Brown amendment. This last vote,
of course, was an up or down vote on the amendment offered by the
Senator from Utah.
Mr. President, I think the Senate has spoken. I am sorry the Senate
spoke in this manner, as we lost some key Senators who had supported
our position before. But that is the prerogative of each Senator.
Mr. President, I see no real reason to put the Senate through this
vote again because I think there would probably be no changes.
Therefore, I congratulate the Senator from Utah in his real win today.
I thought we were within about one or two votes difference, but
evidently that was not the case. I do feel, Mr. President, and I would
like to say that I think, ultimately, this correction needs to be made
in the GATT treaty. I feel very, very strongly about this.
If there is another way to frame this issue, or another way on
another day to have a debate on this matter so that we can have more
competition in the drug market, then I am going to, once again, rise on
this floor and try to present that case to my colleagues.
Once again, I congratulate the Senator from Utah. I think I know when
I am defeated. I think today we were defeated. I am very sorry for the
outcome. But the Senate, Mr. President, has spoken, and I bow to the
will of this great body.
Mr. HATCH. Mr. President, I want to compliment my colleague. I have
been debating with our fellow Senators here for 20 years, and I have to
say that no one has worked me over with greater regularity, or in a
nicer way and with greater decency, than my dear friend from Arkansas.
I do not think anybody in this body is going to miss him any more than
I.
This has been a very difficult debate. The Senator from Arkansas is
very sincere. He believes in what he is doing. He made arguments that I
know he believed. I want everybody to know that I am very sincere, too.
I really believe in this GATT treaty.
My Committee has jurisdiction over patent, copyright, and trademark
issues and I have worked with these issues during my whole Senate
career.
I believe this is a tremendously important issue.
Although my colleague and I differ here today--and I feel badly that
my colleague feels badly--I know that nobody could have put up a more
noble or hard fight than he did. I hope that this is now resolved.
There are two good sides to this issue.
Senator Pryor is trying to help consumers. I am trying to help
consumers. We have people on the outside trying to malign both of us,
and both of us are trying to do our jobs in the Senate. We just happen
to disagree on how it should be done.
I respect my colleague from Arkansas.
I also want to pay particular tribute to the distinguished Senator
from Pennsylvania, Senator Specter, who has worked long and hard to try
and make the agreement that came out of the Judiciary Committee one
that would function and work.
I pay tribute to my distinguished ranking Democrat leader on the
Judiciary Committee, Senator Biden, who, I think, made a real
difference on this matter with the suggestions he made.
Last but not least, Senator Heflin played a significant role in this,
as has Senator Thurmond, and others.
I will not take any more time of the Senate. I want everybody to know
that I appreciate those who voted with us, and I respect those who
voted against us--especially my dear friend from Arkansas.
Mr. PRYOR. Mr. President, if I might respond by thanking the Senator
for his very kind and generous words. I am deeply grateful for that. I
have enjoyed a splendid relationship with Senator Hatch through this
fight and other issues. He has always been a gentleman in every
respect. He is a very eloquent adversary, I might say.
Mr. President, I also want to say a special word of thanks to the
Senator from Rhode Island, Senator Chafee, who has been our ally in
this fight, not only in the Senate Committee on Finance, but on the
floor of the Senate. He and his staff have been unfailing in their
support. We are very grateful for the opportunity to work with him and
by his side. Also, I thank the Senator from Colorado, Senator Brown,
and the other cosponsors of this particular amendment.
Once again, Mr. President, I see no need to put the Senate through
this vote again. I guess I will ask the leadership if they would like
to attempt to vitiate the unanimous-consent agreement.
Mr. President, I yield the floor.
Vote on Amendment No. 4365, As Amended
The PRESIDING OFFICER. The question now is on agreeing to amendment
No. 4365 by the Senator from Arkansas, as amended by the Senator from
Utah.
The amendment (No. 4365), as amended, was agreed to.
Mr. HELMS. Mr. President, I move to reconsider the vote, and I move
to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. BYRD. Mr. President, if no other Senator seeks recognition, I
have a brief statement I will make. But I will be glad to yield the
floor if another Senator wishes to proceed with an amendment.
Has the Pastore rule run its course for the day?
The PRESIDING OFFICER. We are calculating. The Pastore rule expired
at 12:30.
Mr. BYRD. I thank the Chair.
Mr. President, I will yield the floor to the distinguished Senator
from Georgia with the understanding that I do not lose my right to the
floor.
Amendment No. 4367
(Purpose: To require the President to submit a report on NATO
enlargement to Congress.)
Mr. NUNN. Mr. President, I send an amendment to the desk and ask for
its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
[[Page S7126]]
The assistant legislative clerk read as follows:
The Senator from Georgia [Mr. Nunn], for himself, Mrs.
Hutchison, Mr. Bradley, Mrs. Kassebaum, and Mr. Cohen,
proposes an amendment numbered 4367.
Mr. NUNN. Mr. President, I ask unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The text of the amendment is printed in today's Record under
``Amendments Submitted.'')
Mr. NUNN. I thank the Senator from West Virginia.
I yield the floor.
____________________