[Congressional Record Volume 146, Number 53 (Wednesday, May 3, 2000)]
[Senate]
[Pages S3328-S3331]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JOHNSON:
  S. 1501. A bill to provide access and choice for use of generic drugs 
instead of nongeneric drugs under Federal health care program, and for 
other purposes; to the Committee on Health, Education, Labor, and 
Pensions.


   GENERIC PHARMACEUTICAL ACCESS AND CHOICE FOR CONSUMERS ACT OF 2000

 Mr. JOHNSON. Mr. President, today, I am introducing 
legislation as one more step in my fight to combat rising prescription 
drug prices and reduce the cost of medication for consumers in this 
country. My legislation, called the Generic Pharmaceutical Access and 
Choice For Consumers Act of 2000, aims to reduce the cost of 
prescription medication to American taxpayers and the U.S. government 
by encouraging the use of Food and Drug Administration (FDA) approved, 
therapeutically equivalent generic prescription drugs within the 
federal health care programs, except if the non-generic form is either 
ordered by the prescribing physician or requested by the patient.
  The Generic Pharmaceutical Access and Choice For Consumers Act of 
2000 establishes a straightforward and cost-effective means of 
increasing consumers' access and choice to safe, affordable generic 
prescription drugs

[[Page S3329]]

under federal health care programs which could result in savings of 
millions of dollars.
  The Federal Employee Health Benefits Program (FEHBP), which last year 
spent $18.2 billion providing health insurance coverage to its 
estimated 4.12 million enrollees, spent nearly twenty percent, $3.6 
billion, of their insurance program costs on pharmaceutical benefits 
alone. This year brought little relief when the Office of Personnel 
Management (OPM) announced that FEHBP premium increases for the year 
2000 were about 9.3 percent, mostly attributable to the cost increase 
in prescription drug claims.
  In 1997, about one-third of all prescriptions under the FEHBP were 
for generic drugs. The Office of Personnel Management (OPM), which 
administers the FEHBP, estimated that total costs for prescription 
drugs would drop by about fifteen percent if half of all prescriptions 
were for generic drugs.
  A 1998 study conducted by the Congressional Budget Office estimates 
that generic pharmaceutical substitution saves consumers nationwide 
approximately eight to ten billion dollars a year.
  Some FEHBP plans and other federal health care programs do to some 
extent encourage the use of generic prescription drugs but the practice 
is not mandatory or universally incorporated into all programs. The 
Generic Pharmaceutical Access and Choice For Consumers Act simply 
directs all federal health care programs that provide prescription drug 
plans to fill prescriptions with FDA approved, therapeutically 
equivalent generic prescription drugs, except if the non-generic form 
is either ordered by the prescribing physician or requested by the 
patient.
  I believe we can take greater steps to increase the utilization of 
high-quality, FDA approved generic pharmaceutical which cost between 
twenty-five and sixty percent less than brand-name pharmaceutical, 
resulting in an estimated average savings of fifteen to thirty dollars 
on each prescription filled.
  Generic pharmaceutical are widely accepted by both consumers and the 
medical profession, as the market share held by generic pharmaceutical 
compared to brand-name prescription drugs has more than doubled during 
the last decade, from approximately nineteen to forty-three percent, 
according to the Congressional Budget Office. Yet, despite accounting 
for just over forty percent of the prescriptions drugs dispensed, 
generic pharmaceutical represent only 8 percent of the total dollar 
volume spent on drugs.
  Since there exists no current coverage for outpatient prescription 
drugs under the Medicare program, a second component of my bill 
includes a Sense of the Senate that legislative language requiring, to 
the extent feasible, a preference for the safe and cost-effective use 
of generic pharmaceutical be considered in conjunction with any 
legislation that adds a prescription drug benefit to the Medicare 
program. I strongly believe that the utilization of high-quality 
generic pharmaceutical in a Medicare prescription drug benefit would 
provide a built in cost control mechanism that would help ensure the 
economic feasibility and sustainability of any new benefit.
  And third, the bill I am introducing today works to prevent a tactic 
used by the brand drug industry to prevent generics from reaching the 
consumers by convincing state legislatures to pass unwarranted 
restrictions to the substitution of generic versions of brand name 
drugs. The campaign that some brand name drug companies lobby in some 
states is nothing more than an attempt by the brand name companies to 
protect their market share. The Generic Pharmaceutical Access and 
Choice For Consumers Act increases the level playing field for generic 
pharmaceutical by requiring the Food and Drug Administration, where 
appropriate, to determine that a generic pharmaceutical is the 
therapeutic equivalent of its brand-name counterpart, and affording 
national uniformity to that determination.
  The legislation would also prevent a State from establishing or 
continuing any requirement that keeps generic pharmaceutical off the 
market once FDA has determined that a generic drug is ``therapeutically 
equivalent'' to a brand name drug. This provision will ensure that 
generic prescription drugs get to the market in a timely fashion and 
provide consumers with access and choice to low cost, high-quality 
alternatives.
  As the year continues, we will see more discussion about how we 
provide Medicare coverage of prescription drugs and I hope that 
ultimately that's where we'll wind up some day. However, I believe that 
minimizing cost through full access to generic drugs must be part of 
any effort to address the prescription drug pricing issue. I introduced 
the Generic Pharmaceutical Access and Choice For Consumers Act of 2000 
to lay the ground work early in these discussions and take some 
constructive steps in the right direction so that the American public 
can get the full benefit of safe, affordable generic prescription drugs 
and taxpayers are treated right at the same time.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2501

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Generic 
     Pharmaceutical Access and Choice for Consumers Act of 2000''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.

           TITLE I--ENCOURAGEMENT OF THE USE OF GENERIC DRUGS

Sec. 101. Encouragement of the use of generic drugs under the Public 
              Health Service Act.
Sec. 102. Application to Federal employees health benefits program.
Sec. 103. Application to medicare program.
Sec. 104. Application to medicaid program.
Sec. 105. Application to Indian Health Service.
Sec. 106. Application to veterans programs.
Sec. 107. Application to recipients of uniformed services health care.
Sec. 108. Application to Federal prisoners.

    TITLE II--THERAPEUTIC EQUIVALENCE REQUIREMENTS FOR GENERIC DRUGS

Sec. 201. Therapeutic equivalence of generic drugs.

         TITLE III--GENERIC PHARMACEUTICALS AND MEDICARE REFORM

Sec. 301. Sense of the Senate regarding a preference for the use of 
              generic pharmaceuticals under the medicare program.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) Generic pharmaceuticals are approved by the Food and 
     Drug Administration on the basis of testing and other 
     information establishing that such pharmaceuticals are 
     therapeutically equivalent to brand-name pharmaceuticals, 
     ensuring consumers a safe, efficacious, and cost-effective 
     alternative to brand-name pharmaceuticals.
       (2) The pharmaceutical market has become increasingly 
     competitive during the last decade because of the increasing 
     availability and accessibility of generic pharmaceuticals.
       (3) The Congressional Budget Office estimates that--
       (A) the substitution of generic pharmaceuticals for brand-
     name pharmaceuticals will save purchasers of pharmaceuticals 
     between $8,000,000,000 and $10,000,000,000 each year; and
       (B) quality generic pharmaceuticals cost between 25 percent 
     and 60 percent less than brand-name pharmaceuticals, 
     resulting in an estimated average savings of $15 to $30 on 
     each prescription filled.
       (4) Generic pharmaceuticals are widely accepted by both 
     consumers and the medical profession, as the market share 
     held by generic pharmaceuticals compared to brand-name 
     pharmaceuticals has more than doubled during the last decade, 
     from approximately 19 percent to 43 percent, according to the 
     Congressional Budget Office.
       (b) Purposes.--The purposes of this Act are--
       (1) to reduce the cost of prescription drugs to the United 
     States Government and to beneficiaries under Federal health 
     care programs while maintaining the quality of health care by 
     encouraging the use of generic drugs rather than nongeneric 
     drugs under those programs whenever feasible; and
       (2) to increase the utilization of generic pharmaceuticals 
     by requiring the Food and Drug Administration, where 
     appropriate, to determine that a generic pharmaceutical is 
     the therapeutic equivalent of its brand-name counterpart, and 
     by affording national uniformity to that determination.

           TITLE I--ENCOURAGEMENT OF THE USE OF GENERIC DRUGS

     SEC. 101. ENCOURAGEMENT OF THE USE OF GENERIC DRUGS UNDER THE 
                   PUBLIC HEALTH SERVICE ACT.

       (a) In General.--Part B of title II of the Public Health 
     Service Act (42 U.S.C. 238 et seq.) is amended by adding at 
     the end the following new section:

[[Page S3330]]

     ``SEC. 247. USE OF GENERIC DRUGS ENCOURAGED.

       ``(a) Each grant or contract entered into under this Act 
     that involves the provision of health care items or services 
     to individuals shall include provisions to ensure that, to 
     the extent feasible, any prescriptions provided for under 
     such grant or contract are filled by providing the generic 
     form of the drug involved, unless the nongeneric form of the 
     drug is--
       ``(1) specifically ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.
       ``(b) In this section:
       ``(1) The term `generic form of the drug' means a drug that 
     is the subject of an application approved under section 
     505(j) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     355(j)), for which the Secretary has made a determination 
     that the drug is the therapeutic equivalent of a listed drug 
     under section 505(j)(5)(E) of that Act (21 U.S.C. 
     355(j)(5)(E)).
       ``(2) The term `nongeneric form of the drug' means a drug 
     that is the subject of an application approved under section 
     505(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     355(b)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to any drug furnished on or after 
     the date of enactment of this Act.

     SEC. 102. APPLICATION TO FEDERAL EMPLOYEES HEALTH BENEFITS 
                   PROGRAM.

       (a) In General.--Section 8902 of title 5, United States 
     Code, is amended by adding at the end the following new 
     subsection:
       ``(p) To the extent feasible, if a contract under this 
     chapter provides for the provision of, the payment for, or 
     the reimbursement of the cost of any prescription drug, the 
     carrier shall provide, pay, or reimburse the cost of the 
     generic form of the drug (as defined in section 247(b)(1) of 
     the Public Health Service Act), except, if the nongeneric 
     form of the drug (as defined in section 247(b)(2) of such 
     Act) is--
       ``(1) specifically ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to any drug furnished during contract years 
     beginning on or after January 1, 2001.

     SEC. 103. APPLICATION TO MEDICARE PROGRAM.

       (a) In General.--Section 1861(t) of the Social Security Act 
     (42 U.S.C. 1395x(t)) is amended by adding at the end the 
     following new paragraph:
       ``(3) For purposes of paragraph (1), the term `drugs' 
     means, to the extent feasible, the generic form of the drug 
     (as defined in section 247(b)(1) of the Public Health Service 
     Act), unless the nongeneric form of such drug (as defined in 
     section 247(b)(2) of such Act) is--
       ``(A) specifically ordered by the health care provider; or
       ``(B) requested by the individual to whom the drug is 
     provided.''.
       (b) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendment made by this section shall apply with respect to 
     any drug furnished on or after the date of enactment of this 
     Act.
       (2) Medicare+choice plans.--In the case of a 
     Medicare+Choice plan offered by a Medicare+Choice 
     organization under part C of title XVIII of the Social 
     Security Act (42 U.S.C. 1395w-21 et seq.), the amendment made 
     by this section shall apply to any drug furnished during 
     contract years beginning on or after January 1, 2001.

     SEC. 104. APPLICATION TO MEDICAID PROGRAM.

       (a) In General.--Section 1902(a) of the Social Security Act 
     (42 U.S.C. 1396a(a)) is amended--
       (1) in paragraph (64), by striking ``and'' at the end;
       (2) in paragraph (65), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding the following new paragraph:
       ``(66) provide that the State shall, in conjunction with 
     the program established under section 1927(g), to the extent 
     feasible, provide for the use of a generic form of a drug (as 
     defined in section 247(b)(1) of the Public Health Service 
     Act), unless the nongeneric form of the drug (as defined in 
     section 247(b)(2) of such Act is--
       ``(A) specifically ordered by the provider; or
       ``(B) requested by the individual to whom the drug is 
     provided.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to any drug furnished under State 
     plans that are approved or renewed on or after the date of 
     enactment of this Act.

     SEC. 105. APPLICATION TO INDIAN HEALTH SERVICE.

       (a) In General.--Title II of the Indian Health Care 
     Improvement Act (25 U.S.C. 1621 et seq.) is amended by adding 
     at the end the following new subsection:

     ``SEC. 225. USE OF GENERIC DRUGS ENCOURAGED.

       ``In providing health care items or services under this 
     Act, the Indian Health Service shall ensure that, to the 
     extent feasible, any prescriptions that are provided for 
     under this Act are filled by providing the generic form of 
     the drug (as defined in section 247(b)(1) of the Public 
     Health Service Act) involved, unless the nongeneric form of 
     the drug (as defined in section 247(b)(2) of such Act) is--
       ``(1) specifically ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to any drug furnished on or after 
     the date of enactment of this Act.

     SEC. 106. APPLICATION TO VETERANS PROGRAMS.

       (a) Use of Generic Drugs Encouraged.--Subchapter III of 
     chapter 17 of title 38, United States Code, is amended by 
     inserting after section 1722A the following new section:

     ``Sec. 1722B. Use of generic drugs encouraged

       ``When furnishing a prescription drug under this chapter, 
     the Secretary shall furnish a generic form of the drug (as 
     defined in section 247(b)(1) of the Public Health Service 
     Act), unless the nongeneric form of the drug (as defined in 
     section 247(b)(2) of such Act) is--
       ``(1) specifically ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 17 of such title is amended by inserting 
     after the item relating to section 1722A the following new 
     item:

``1722B. Use of generic drugs encouraged.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to any drug furnished on or after 
     the date of enactment of this Act.

     SEC. 107. APPLICATION TO RECIPIENTS OF UNIFORMED SERVICES 
                   HEALTH CARE.

       (a) Use of Generic Drugs Encouraged.--Chapter 55 of title 
     10, United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 1110. Use of generic drugs encouraged

       ``The Secretary of Defense shall ensure that, whenever 
     feasible, each health care provider who furnishes a drug 
     furnishes the generic form of the drug (as defined in section 
     247(b)(1) of the Public Health Service Act), unless the 
     nongeneric form of the drug (as defined in section 247(b)(2) 
     of such Act) is--
       ``(1) specifically ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 1109 the following new item:

``1110. Use of generic drugs encouraged.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to any drug furnished on or after 
     the date of enactment of this Act.

     SEC. 108. APPLICATION TO FEDERAL PRISONERS.

       (a) In General.--Section 4006(b) of title 18, United States 
     Code, is amended by adding at the end the following new 
     paragraph:
       ``(3) Use of generic drugs encouraged.--The Attorney 
     General shall ensure that, whenever feasible, each health 
     care provider who furnishes a drug to a prisoner charged with 
     or convicted of an offense against the United States 
     furnishes the generic form of the drug (as defined in section 
     247(b)(1) of the Public Health Service Act), unless the 
     nongeneric form of the drug (as defined in section 247(b)(2) 
     of such Act) is--
       ``(A) specifically ordered by the prescribing provider; or
       ``(B) requested by the prisoner for whom the drug is 
     prescribed.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to any drug furnished on or after 
     the date of enactment of this Act.

    TITLE II--THERAPEUTIC EQUIVALENCE REQUIREMENTS FOR GENERIC DRUGS

     SEC. 201. THERAPEUTIC EQUIVALENCE OF GENERIC DRUGS.

       (a) In General.--Section 505(j) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 355(j)) is amended--
       (1) in paragraph (5), by adding at the end the following 
     new subparagraph:
       ``(E)(i) For each abbreviated application filed under 
     paragraph (1), the Secretary shall determine whether the new 
     drug for which the application is filed is the therapeutic 
     equivalent of the listed drug referred to in paragraph 
     (2)(A)(i) prior to the approval of the application.
       ``(ii) For purposes of clause (i), a new drug is the 
     therapeutic equivalent of a listed drug if--
       ``(I) each active ingredient of the new drug and the listed 
     drug is the same;
       ``(II) the new drug and the listed drug (aa) are of the 
     same dosage form; (bb) have the same route of administration; 
     (cc) are identical in strength or concentration; (dd) meet 
     the same compendial or other applicable standards, except 
     that the drugs may differ in shape, scoring, configuration, 
     packaging, excipient, expiration time, or, subject to 
     paragraph (2)(A)(v), labeling; and (ee) are expected to have 
     the same clinical effect and safety profile when administered 
     to patients under conditions specified in the labeling; and
       ``(III) the new drug does not (aa) present a known or 
     potential bioequivalence problem and meets an acceptable in 
     vitro standard; or (bb) if the new drug presents a known or 
     potential bioequivalence problem, the drug is shown to meet 
     an appropriate bioequivalence standard.
       ``(iii) With respect to a new drug for which an abbreviated 
     application is filed under

[[Page S3331]]

     paragraph (1), the provisions of this subparagraph shall 
     supersede any provisions of the law of any State relating to 
     the determination of the therapeutic equivalence of the drug 
     to a listed drug.''; and
       (2) in paragraph (7)(A), by adding at the end the 
     following:
       ``(iv) The Secretary shall include in each revision of the 
     list under clause (ii) on or after the date of enactment of 
     this clause the official and proprietary name of each listed 
     drug that is therapeutically equivalent to a new drug 
     approved under this subsection during the preceding 30-day 
     period, as determined under paragraph (5)(E).''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

         TITLE III--GENERIC PHARMACEUTICALS AND MEDICARE REFORM

     SEC. 301. SENSE OF THE SENATE REGARDING A PREFERENCE FOR THE 
                   USE OF GENERIC PHARMACEUTICALS UNDER THE 
                   MEDICARE PROGRAM.

       It is the sense of the Senate that legislative language 
     requiring, to the extent feasible, a preference for the safe 
     and cost-effective use of generic pharmaceuticals should be 
     considered in conjunction with any legislation that adds a 
     comprehensive prescription drug benefit to the medicare 
     program under title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.).
                                 ______