[Congressional Record Volume 147, Number 10 (Thursday, January 25, 2001)]
[Senate]
[Pages S572-S574]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JOHNSON:
  S. 186. A bill to provide access and choice for use of generic drugs 
instead of nongeneric drugs under Federal health care programs, and for 
other purposes; to the Committee on Health, Education, Labor, and 
Pensions.
  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 2001, 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 
2001 establishes a straightforward and cost-effective means of 
increasing consumers' access and choice to safe, affordable generic 
prescription drugs under federal health care programs which could 
result in savings of millions of dollars.
  The Federal Employee Health Benefits Program (FEHBP), which spends 
approximately $18.4 billion providing health insurance coverage to its' 
estimated nine million enrollees, including employees, retirees and 
their families, spends 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 2001 were on 
average 10.5 percent, mostly attributable to the cost increase in 
prescription drug plans to fill prescriptions with FDA approved, 
therapeutically equivalent generic prescription drugs. In fact, the 
rising cost of prescription drugs accounts for about 40 percent of the 
total rise in premiums for this year alone.
  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 drugs, which cost between twenty-
five and sixty percent less than brand-name drugs, resulting in an 
estimated average savings of fifteen to thirty dollars on each 
prescription filled. In fact, independent studies have even estimated 
that generics provide an average savings of $45.50 for each 
prescription drug sold.
  Generic pharmaceutical drugs are widely accepted by both consumers 
and the medical profession, as the market share held by generic drugs 
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 drugs represent only 8 percent of the total dollar volume spent 
on drugs in this country. Studies have shown that consumers can save an 
additional $1.32 billion per year for every one percent increase in the 
use of generic drugs. That is why I strongly believe that generic 
pharmaceutical utilization can help both consumers and the government 
reduce the cost of prescription 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, to the extent feasible, a 
preference for the safe and cost-effective use of generic drugs 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, safe generic pharmaceutical drugs 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 
consumer 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

[[Page S573]]

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 
drugs by requiring the Food and Drug Administration (FDA), 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 drugs 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, I hope that we will move forward in a 
constructive debate about providing relief from the escalating costs of 
prescription drugs. 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 2001 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 full 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. 186

       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 2001''.
       (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--REQUIRING THE USE OF GENERIC DRUGS

Sec. 101. Requiring 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 on requiring 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 scientific 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 innovator 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) Independent studies have estimated that generics 
     provide an average savings of $45.50 for each prescription 
     drug sold.
       (5) 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.
       (6) Generic pharmaceuticals can save consumers an 
     additional $1,320,000,000 each year for each 1 percent 
     increase in the use of such pharmaceuticals.
       (7) Generic pharmaceutical use can help both consumers and 
     the Government reduce the cost of prescription drugs.
       (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 
     requiring the use of generic drugs rather than nongeneric 
     drugs, unless no therapeutically equivalent generic drug has 
     been approved under the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 301 et seq.) or the nongeneric drug is 
     specifically--
       (A) ordered by the prescribing provider; or
       (B) requested by the individual for whom the drug is 
     prescribed; 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--REQUIRING THE USE OF GENERIC DRUGS

     SEC. 101. REQUIRING 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:

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

       ``(a) Requirement.--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 any prescription drug provided for under such 
     grant or contract is filled by providing the generic form of 
     the drug involved, unless no generic form of the drug has 
     been approved under the Federal Food, Drug, and Cosmetic Act 
     or the nongeneric form of the drug is specifically--
       ``(1) ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.
       ``(b) Definitions.--In this section:
       ``(1) Generic form of the drug.--The term `generic form of 
     the drug' means a drug that is the subject of an application 
     approved under subsection (b)(2) or (j) of section 505 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355), for 
     which the Secretary has made a determination that the drug is 
     the therapeutic equivalent of a listed drug under section 
     505(o) of that Act (21 U.S.C. 355(o)).
       ``(2) Nongeneric form of the drug.--The term `nongeneric 
     form of the drug' means a drug that is the subject of an 
     application approved under--
       ``(A) section 505(b)(1) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355(b)(1)); or
       ``(B) section 505(b)(2) of such Act and that has been 
     determined to be not therapeutically equivalent to any listed 
     drug.
       ``(3) Prescription drug.--The term `prescription drug' 
     means a drug that is subject to the provisions of section 
     503(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     353(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) If a contract under this chapter provides for the 
     provision of, the payment for, or the reimbursement of the 
     cost of any prescription drug (as defined in paragraph (3) of 
     section 247(b) of the Public Health Service Act), the carrier 
     shall provide, pay, or reimburse the cost of the generic form 
     of the drug (as defined in paragraph (1) of such section), 
     except that this subsection shall not apply if the nongeneric 
     form of the drug (as defined in paragraph (2) of such 
     section) is specifically--
       ``(1) 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 prescription drug furnished during 
     contract years beginning on or after January 1, 2002.

     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 
     the generic form of the drug (as defined in section 247(b)(1) 
     of the Public Health Service Act), unless no generic form of 
     the drug has been approved under the Federal Food, Drug, and 
     Cosmetic Act or the nongeneric form of such drug (as defined 
     in section 247(b)(2) of such Act) is specifically--
       ``(A) 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 prescription drug furnished on or after the date of 
     enactment of this Act.

[[Page S574]]

       (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 prescription drug 
     furnished during contract years beginning on or after January 
     1, 2002.

     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), provide for 
     the use of a generic form of a drug (as defined in paragraph 
     (1) of section 247(b) of the Public Health Service Act), 
     unless no generic form of the drug has been approved under 
     the Federal Food, Drug, and Cosmetic Act or the nongeneric 
     form of the drug (as defined in paragraph (2) of such 
     section) is specifically--
       ``(A) 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 prescription 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 section:

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

       ``In providing health care items or services under this 
     Act, the Indian Health Service shall ensure that any 
     prescription drug (as defined in paragraph (3) of section 
     247(b) of the Public Health Service Act) that is provided 
     under this Act is the generic form of the drug (as defined in 
     paragraph (1) of such section) involved, unless no generic 
     form of the drug has been approved under the Federal Food, 
     Drug, and Cosmetic Act or the nongeneric form of the drug (as 
     defined in paragraph (2) of such section) is specifically--
       ``(1) 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 prescription drug furnished 
     on or after the date of enactment of this Act.

     SEC. 106. APPLICATION TO VETERANS PROGRAMS.

       (a) Use of Generic Drugs Required.--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 required

       ``When furnishing a prescription drug (as defined in 
     paragraph (3) of section 247(b) of the Public Health Service 
     Act) under this chapter, the Secretary shall furnish a 
     generic form of the drug (as defined in paragraph (1) of such 
     section), unless no generic form of the drug has been 
     approved under the Federal Food, Drug, and Cosmetic Act or 
     the nongeneric form of the drug (as defined in paragraph (2) 
     of such section) is specifically--
       ``(1) 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 required.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to any prescription 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 Required.--Chapter 55 of title 10, 
     United States Code, as amended by section 751(b) of the Floyd 
     D. Spence National Defense Authorization Act for Fiscal Year 
     2001 (as enacted into law by Public Law 106-398), is amended 
     by adding at the end the following new section:

     ``Sec. 1111. Use of generic drugs required

       ``The Secretary of Defense shall ensure that each health 
     care provider who furnishes a prescription drug (as defined 
     in paragraph (3) of section 247(b) of the Public Health 
     Service Act) furnishes the generic form of the drug (as 
     defined in paragraph (1) of such section), unless no generic 
     form of the drug has been approved under the Federal Food, 
     Drug, and Cosmetic Act or the nongeneric form of the drug (as 
     defined in paragraph (2) of such section) is specifically--
       ``(1) 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:

``1111. Use of generic drugs required.''.

       (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 required.--The Attorney General 
     shall ensure that each health care provider who furnishes a 
     prescription drug (as defined in paragraph (3) of section 
     247(b) of the Public Health Service Act) to a prisoner 
     charged with or convicted of an offense against the United 
     States furnishes the generic form of the drug (as defined in 
     paragraph (1) of such section), unless no generic form of the 
     drug has been approved under the Federal Food, Drug, and 
     Cosmetic Act or the nongeneric form of the drug (as defined 
     in paragraph (2) of such section) is specifically--
       ``(A) 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 prescription 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 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355) is amended--
       (1) by adding at the end the following new subsection:
       ``(o)(1) For each application filed under subsection (b)(2) 
     or subsection (j), the Secretary shall determine whether the 
     drug for which the application is filed is the therapeutic 
     equivalent of the drug for which the investigations have been 
     made under subsection (b)(1)(A) (in this subsection referred 
     to as the `reference drug') or the listed drug referred to in 
     subsection (j)(2)(A)(i). For applications approved after the 
     date of enactment of this subsection, the Secretary's 
     determination shall be made before the approval of the 
     application. For such applications approved before such date, 
     the most recent determination made by the Secretary shall be 
     confirmed.
       ``(2) For purposes of paragraph (1), a drug is the 
     therapeutic equivalent of a reference drug or a listed drug 
     if--
       ``(A) each active ingredient of the drug and either the 
     reference drug or the listed drug is the same;
       ``(B) the drug and either the reference drug or the listed 
     drug--
       ``(i) are of the same dosage form;
       ``(ii) have the same route of administration;
       ``(iii) are identical in strength or concentration; and
       ``(iv) are expected to have the same clinical effect and 
     safety profile when administered to patients under conditions 
     specified in the labeling; and
       ``(C) the drug does not present a known bioequivalence 
     problem, or if the drug presents such a problem, the drug is 
     shown to meet an appropriate bioequivalence standard.
       ``(3) With respect to a drug for which a therapeutic 
     equivalence determination has been made or confirmed under 
     this subsection, no State or political subdivision of a State 
     may establish or continue in effect with respect to 
     therapeutic equivalence of the drug to either a reference 
     drug or a listed drug, any requirement which is different 
     from, or in addition to, or is otherwise not identical with, 
     the Secretary's determination or confirmation under this 
     subsection.''; and
       (2) in subsection (j)(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 
     reference drug or listed drug that is therapeutically 
     equivalent to a drug approved under subsection (b)(2) or 
     under this subsection during the preceding 30-day period, as 
     determined under subsection (o).''.
       (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 ON REQUIRING THE USE OF GENERIC 
                   PHARMACEUTICALS UNDER THE MEDICARE PROGRAM.

       It is the sense of the Senate that legislative language 
     requiring 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.).
                                 ______