[Congressional Record Volume 148, Number 108 (Thursday, August 1, 2002)]
[Senate]
[Pages S8007-S8012]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        GREATER ACCESS TO AFFORDABLE PHARMACEUTICALS ACT OF 2002

  (On Wednesday, July 31, 2002, the Senate passed S. 812, as follows:)

                                 S. 812

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

         TITLE I--GREATER ACCESS TO AFFORDABLE PHARMACEUTICALS

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Greater Access to 
     Affordable Pharmaceuticals Act of 2002''.

     SEC. 102. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds that--
       (1) prescription drug costs are increasing at an alarming 
     rate and are a major worry of American families and senior 
     citizens;
       (2) enhancing competition between generic drug 
     manufacturers and brand-name manufacturers can significantly 
     reduce prescription drug costs for American families;
       (3) the pharmaceutical market has become increasingly 
     competitive during the last decade because of the increasing 
     availability and accessibility of generic pharmaceuticals, 
     but competition must be further stimulated and strengthened;
       (4) the Federal Trade Commission has discovered that there 
     are increasing opportunities for drug companies owning 
     patents on brand-name drugs and generic drug companies to 
     enter into private financial deals in a manner that could 
     restrain trade and greatly reduce competition and increase 
     prescription drug costs for consumers;
       (5) generic pharmaceuticals are approved by the Food and 
     Drug Administration on the basis of scientific testing and 
     other information establishing that pharmaceuticals are 
     therapeutically equivalent to brand-name pharmaceuticals, 
     ensuring consumers a safe, efficacious, and cost-effective 
     alternative to brand-name innovator pharmaceuticals;
       (6) the Congressional Budget Office estimates that--
       (A) the use of generic pharmaceuticals for brand-name 
     pharmaceuticals could save purchasers of pharmaceuticals 
     between $8,000,000,000 and $10,000,000,000 each year; and
       (B) 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;
       (7) generic pharmaceuticals are widely accepted by 
     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;
       (8) expanding access to generic pharmaceuticals can help 
     consumers, especially senior citizens and the uninsured, have 
     access to more affordable prescription drugs;
       (9) Congress should ensure that measures are taken to 
     effectuate the amendments made by the Drug Price Competition 
     and Patent Term Restoration Act of 1984 (98 Stat. 1585) 
     (referred to in this section as the ``Hatch-Waxman Act'') to 
     make generic drugs more accessible, and thus reduce health 
     care costs; and
       (10) it would be in the public interest if patents on drugs 
     for which applications are approved under section 505(c) of 
     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(c)) 
     were extended only through the patent extension procedure 
     provided under the Hatch-Waxman Act rather than through the 
     attachment of riders to bills in Congress.
       (b) Purposes.--The purposes of this title are--
       (1) to increase competition, thereby helping all Americans, 
     especially seniors and the uninsured, to have access to more 
     affordable medication; and
       (2) to ensure fair marketplace practices and deter 
     pharmaceutical companies (including generic companies) from 
     engaging in anticompetitive action or actions that tend to 
     unfairly restrain trade.

     SEC. 103. FILING OF PATENT INFORMATION WITH THE FOOD AND DRUG 
                   ADMINISTRATION.

       (a) Filing After Approval of an Application.--
       (1) In General.--Section 505 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355) (as amended by section 
     9(a)(2)(B)(ii)) is amended in subsection (c) by striking 
     paragraph (2) and inserting the following:
       ``(2) Patent information.--
       ``(A) In general.--Not later than the date that is 30 days 
     after the date of an order approving an application under 
     subsection (b) (unless the Secretary extends the date because 
     of extraordinary or unusual circumstances), the holder of the 
     application shall file with the Secretary the patent 
     information described in subparagraph (C) with respect to any 
     patent--
       ``(i)(I) that claims the drug for which the application was 
     approved; or
       ``(II) that claims an approved method of using the drug; 
     and
       ``(ii) with respect to which a claim of patent infringement 
     could reasonably be asserted if a person not licensed by the 
     owner engaged in the manufacture, use, or sale of the drug.
       ``(B) Subsequently issued patents.--In a case in which a 
     patent described in subparagraph (A) is issued after the date 
     of an order approving an application under subsection (b), 
     the holder of the application shall file with the Secretary 
     the patent information described in subparagraph (C) not 
     later than the date that is 30 days after the date on which 
     the patent is issued (unless the Secretary extends the date 
     because of extraordinary or unusual circumstances).
       ``(C) Patent information.--The patent information required 
     to be filed under subparagraph (A) or (B) includes--
       ``(i) the patent number;
       ``(ii) the expiration date of the patent;
       ``(iii) with respect to each claim of the patent--

       ``(I) whether the patent claims the drug or claims a method 
     of using the drug; and
       ``(II) whether the claim covers--

       ``(aa) a drug substance;
       ``(bb) a drug formulation;
       ``(cc) a drug composition; or
       ``(dd) a method of use;
       ``(iv) if the patent claims a method of use, the approved 
     use covered by the claim;
       ``(v) the identity of the owner of the patent (including 
     the identity of any agent of the patent owner); and
       ``(vi) a declaration that the applicant, as of the date of 
     the filing, has provided complete and accurate patent 
     information for all patents described in subparagraph (A).
       ``(D) Publication.--On filing of patent information 
     required under subparagraph (A) or (B), the Secretary shall--
       ``(i) immediately publish the information described in 
     clauses (i) through (iv) of subparagraph (C); and
       ``(ii) make the information described in clauses (v) and 
     (vi) of subparagraph (C) available to the public on request.
       ``(E) Civil action for correction or deletion of patent 
     information.--
       ``(i) In general.--A person that has filed an application 
     under subsection (b)(2) or (j) for a drug may bring a civil 
     action against the holder of the approved application for the 
     drug seeking an order requiring that the holder of the 
     application amend the application--

       ``(I) to correct patent information filed under 
     subparagraph (A); or
       ``(II) to delete the patent information in its entirety for 
     the reason that--

       ``(aa) the patent does not claim the drug for which the 
     application was approved; or
       ``(bb) the patent does not claim an approved method of 
     using the drug.
       ``(ii) Limitations.--Clause (i) does not authorize--

       ``(I) a civil action to correct patent information filed 
     under subparagraph (B); or
       ``(II) an award of damages in a civil action under clause 
     (i).

       ``(F) No claim for patent infringement.--An owner of a 
     patent with respect to which a holder of an application fails 
     to file information on or before the date required under 
     subparagraph (A) or (B) shall be barred from bringing a civil 
     action for infringement of the patent against a person that--
       ``(i) has filed an application under subsection (b)(2) or 
     (j); or
       ``(ii) manufactures, uses, offers to sell, or sells a drug 
     approved under an application under subsection (b)(2) or 
     (j).''.
       (2) Transition provision.--
       (A) Filing of patent information.--Each holder of an 
     application for approval of a new drug under section 505(b) 
     of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     355(b)) that has been approved before the date of enactment 
     of this Act shall amend the application to include the patent 
     information required under the amendment made by paragraph 
     (1) not later than the date that is 30 days after the date of 
     enactment of this Act (unless the Secretary of Health and 
     Human Services extends the date because of extraordinary or 
     unusual circumstances).
       (B) No claim for patent infringement.--An owner of a patent 
     with respect to which a holder of an application under 
     subsection (b) of section 505 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355) fails to file information on or 
     before the date required under subparagraph (A) shall be 
     barred from bringing a civil action for infringement of the 
     patent against a person that--
       (i) has filed an application under subsection (b)(2) or (j) 
     of that section; or
       (ii) manufactures, uses, offers to sell, or sells a drug 
     approved under an application under subsection (b)(2) or (j) 
     of that section.
       (b) Filing With an Application.--Section 505 of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 355) is amended--
       (1) in subsection (b)(2)--
       (A) in subparagraph (A), by striking ``and'' at the end;
       (B) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(C) with respect to a patent that claims both the drug 
     and a method of using the drug or claims more than 1 method 
     of using the drug for which the application is filed--
       ``(i) a certification under subparagraph (A)(iv) on a 
     claim-by-claim basis; and

[[Page S8008]]

       ``(ii) a statement under subparagraph (B) regarding the 
     method of use claim.''; and
       (2) in subsection (j)(2)(A), by inserting after clause 
     (viii) the following:
     ``With respect to a patent that claims both the drug and a 
     method of using the drug or claims more than 1 method of 
     using the drug for which the application is filed, the 
     application shall contain a certification under clause 
     (vii)(IV) on a claim-by-claim basis and a statement under 
     clause (viii) regarding the method of use claim.''.

     SEC. 104. LIMITATION OF 30-MONTH STAY TO CERTAIN PATENTS.

       (a) Abbreviated New Drug Applications.--Section 505(j)(5) 
     of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     355(j)(5)) is amended--
       (1) in subparagraph (B)--
       (A) in clause (iii)--
       (i) by striking ``(iii) If the applicant made a 
     certification described in subclause (IV) of paragraph 
     (2)(A)(vii),'' and inserting the following:
       ``(iii) Subclause (iv) certification with respect to 
     certain patents.--If the applicant made a certification 
     described in paragraph (2)(A)(vii)(IV) with respect to a 
     patent (other than a patent that claims a process for 
     manufacturing the listed drug) for which patent information 
     was filed with the Secretary under subsection (c)(2)(A),''; 
     and
       (ii) by adding at the end the following: ``The 30-month 
     period provided under the second sentence of this clause 
     shall not apply to a certification under paragraph 
     (2)(A)(vii)(IV) made with respect to a patent for which 
     patent information was filed with the Secretary under 
     subsection (c)(2)(B).'';
       (B) by redesignating clause (iv) as clause (v); and
       (C) by inserting after clause (iii) the following:
       ``(iv) Subclause (iv) certification with respect to other 
     patents.--

       ``(I) In general.--If the applicant made a certification 
     described in paragraph (2)(A)(vii)(IV) with respect to a 
     patent not described in clause (iii) for which patent 
     information was published by the Secretary under subsection 
     (c)(2)(D), the approval shall be made effective on the date 
     that is 45 days after the date on which the notice provided 
     under paragraph (2)(B) was received, unless a civil action 
     for infringement of the patent, accompanied by a motion for 
     preliminary injunction to enjoin the applicant from engaging 
     in the commercial manufacture or sale of the drug, was filed 
     on or before the date that is 45 days after the date on which 
     the notice was received, in which case the approval shall be 
     made effective--

       ``(aa) on the date of a court action declining to grant a 
     preliminary injunction; or
       ``(bb) if the court has granted a preliminary injunction 
     prohibiting the applicant from engaging in the commercial 
     manufacture or sale of the drug--
       ``(AA) on issuance by a court of a determination that the 
     patent is invalid or is not infringed;
       ``(BB) on issuance by a court of an order revoking the 
     preliminary injunction or permitting the applicant to engage 
     in the commercial manufacture or sale of the drug; or
       ``(CC) on the date specified in a court order under section 
     271(e)(4)(A) of title 35, United States Code, if the court 
     determines that the patent is infringed.

       ``(II) Cooperation.--Each of the parties shall reasonably 
     cooperate in expediting a civil action under subclause (I).
       ``(III) Expedited notification.--If the notice under 
     paragraph (2)(B) contains an address for the receipt of 
     expedited notification of a civil action under subclause (I), 
     the plaintiff shall, on the date on which the complaint is 
     filed, simultaneously cause a notification of the civil 
     action to be delivered to that address by the next business 
     day.''; and

       (2) by inserting after subparagraph (B) the following:
       ``(C) Failure to bring infringement action.--If, in 
     connection with an application under this subsection, the 
     applicant provides an owner of a patent notice under 
     paragraph (2)(B) with respect to the patent, and the owner of 
     the patent fails to bring a civil action against the 
     applicant for infringement of the patent on or before the 
     date that is 45 days after the date on which the notice is 
     received, the owner of the patent shall be barred from 
     bringing a civil action for infringement of the patent in 
     connection with the development, manufacture, use, offer to 
     sell, or sale of the drug for which the application was filed 
     or approved under this subsection.''.
       (b) Other Applications.--Section 505(c)) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 355(c)) (as amended 
     by section 9(a)(3)(A)(iii)) is amended--
       (1) in paragraph (3)--
       (A) in subparagraph (C)--
       (i) by striking ``(C) If the applicant made a certification 
     described in clause (iv) of subsection (b)(2)(A),'' and 
     inserting the following:
       ``(C) Clause (iv) certification with respect to certain 
     patents.--If the applicant made a certification described in 
     subsection (b)(2)(A)(iv) with respect to a patent (other than 
     a patent that claims a process for manufacturing the listed 
     drug) for which patent information was filed with the 
     Secretary under paragraph (2)(A),''; and
       (ii) by adding at the end the following: ``The 30-month 
     period provided under the second sentence of this 
     subparagraph shall not apply to a certification under 
     subsection (b)(2)(A)(iv) made with respect to a patent for 
     which patent information was filed with the Secretary under 
     paragraph (2)(B).''; and
       (B) by inserting after subparagraph (C) the following:
       ``(D) Clause (iv) certification with respect to other 
     patents.--
       ``(i) In general.--If the applicant made a certification 
     described in subsection (b)(2)(A)(iv) with respect to a 
     patent not described in subparagraph (C) for which patent 
     information was published by the Secretary under paragraph 
     (2)(D), the approval shall be made effective on the date that 
     is 45 days after the date on which the notice provided under 
     subsection (b)(3) was received, unless a civil action for 
     infringement of the patent, accompanied by a motion for 
     preliminary injunction to enjoin the applicant from engaging 
     in the commercial manufacture or sale of the drug, was filed 
     on or before the date that is 45 days after the date on which 
     the notice was received, in which case the approval shall be 
     made effective--

       ``(I) on the date of a court action declining to grant a 
     preliminary injunction; or
       ``(II) if the court has granted a preliminary injunction 
     prohibiting the applicant from engaging in the commercial 
     manufacture or sale of the drug--

       ``(aa) on issuance by a court of a determination that the 
     patent is invalid or is not infringed;
       ``(bb) on issuance by a court of an order revoking the 
     preliminary injunction or permitting the applicant to engage 
     in the commercial manufacture or sale of the drug; or
       ``(cc) on the date specified in a court order under section 
     271(e)(4)(A) of title 35, United States Code, if the court 
     determines that the patent is infringed.
       ``(ii) Cooperation.--Each of the parties shall reasonably 
     cooperate in expediting a civil action under clause (i).
       ``(iii) Expedited notification.--If the notice under 
     subsection (b)(3) contains an address for the receipt of 
     expedited notification of a civil action under clause (i), 
     the plaintiff shall, on the date on which the complaint is 
     filed, simultaneously cause a notification of the civil 
     action to be delivered to that address by the next business 
     day.''; and
       (2) by inserting after paragraph (3) the following:
       ``(4) Failure to bring infringement action.--If, in 
     connection with an application under subsection (b)(2), the 
     applicant provides an owner of a patent notice under 
     subsection (b)(3) with respect to the patent, and the owner 
     of the patent fails to bring a civil action against the 
     applicant for infringement of the patent on or before the 
     date that is 45 days after the date on which the notice is 
     received, the owner of the patent shall be barred from 
     bringing a civil action for infringement of the patent in 
     connection with the development, manufacture, use, offer to 
     sell, or sale of the drug for which the application was filed 
     or approved under subsection (b)(2).''.
       (c) Effective Date.--
       (1) In general.--The amendments made by subsections (a) and 
     (b) shall be effective with respect to any certification 
     under subsection (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of 
     section 505 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 355) made after the date of enactment of this Act in 
     an application filed under subsection (b)(2) or (j) of that 
     section.
       (2) Transition provision.--In the case of applications 
     under section 505(b) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 355(b)) filed before the date of enactment of 
     this Act--
       (A) a patent (other than a patent that claims a process for 
     manufacturing a listed drug) for which information was 
     submitted to the Secretary of Health and Human Services under 
     section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act 
     (as in effect on the day before the date of enactment of this 
     Act) shall be subject to subsections (c)(3)(C) and 
     (j)(5)(B)(iii) of section 505 of the Federal Food, Drug, and 
     Cosmetic Act (as amended by this section); and
       (B) any other patent (including a patent for which 
     information was submitted to the Secretary under section 
     505(c)(2) of that Act (as in effect on the day before the 
     date of enactment of this Act)) shall be subject to 
     subsections (c)(3)(D) and (j)(5)(B)(iv) of section 505 of the 
     Federal Food, Drug, and Cosmetic Act (as amended by this 
     section).

     SEC. 105. EXCLUSIVITY FOR ACCELERATED GENERIC DRUG 
                   APPLICANTS.

       (a) In General.--Section 505(j)(5) of the Federal Food, 
     Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)) (as amended by 
     section 4(a)) is amended--
       (1) in subparagraph (B)(v), by striking subclause (II) and 
     inserting the following:

       ``(II) the earlier of--

       ``(aa) the date of a final decision of a court (from which 
     no appeal has been or can be taken, other than a petition to 
     the Supreme Court for a writ of certiorari) holding that the 
     patent that is the subject of the certification is invalid or 
     not infringed; or
       ``(bb) the date of a settlement order or consent decree 
     signed by a Federal judge that enters a final judgment and 
     includes a finding that the patent that is the subject of the 
     certification is invalid or not infringed;''; and
       (2) by inserting after subparagraph (C) the following:
       ``(D) Forfeiture of 180-day period.--
       ``(i) Definitions.--In this subparagraph:

       ``(I) Application.--The term `application' means an 
     application for approval of a drug under this subsection 
     containing a certification under paragraph (2)(A)(vii)(IV) 
     with respect to a patent.

[[Page S8009]]

       ``(II) First application.--The term `first application' 
     means the first application to be filed for approval of the 
     drug.
       ``(III) Forfeiture event.--The term `forfeiture event', 
     with respect to an application under this subsection, means 
     the occurrence of any of the following:

       ``(aa) Failure to market.--The applicant fails to market 
     the drug by the later of--
       ``(AA) the date that is 60 days after the date on which the 
     approval of the application for the drug is made effective 
     under clause (iii) or (iv) of subparagraph (B) (unless the 
     Secretary extends the date because of extraordinary or 
     unusual circumstances); or
       ``(BB) if 1 or more civil actions have been brought against 
     the applicant for infringement of a patent subject to a 
     certification under paragraph (2)(A)(vii)(IV) or 1 or more 
     civil actions have been brought by the applicant for a 
     declaratory judgment that such a patent is invalid or not 
     infringed, the date that is 60 days after the date of a final 
     decision (from which no appeal has been or can be taken, 
     other than a petition to the Supreme Court for a writ of 
     certiorari) in the last of those civil actions to be decided 
     (unless the Secretary extends the date because of 
     extraordinary or unusual circumstances).
       ``(bb) Withdrawal of application.--The applicant withdraws 
     the application.
       ``(cc) Amendment of certification.--The applicant, 
     voluntarily or as a result of a settlement or defeat in 
     patent litigation, amends the certification from a 
     certification under paragraph (2)(A)(vii)(IV) to a 
     certification under paragraph (2)(A)(vii)(III).
       ``(dd) Failure to obtain approval.--The applicant fails to 
     obtain tentative approval of an application within 30 months 
     after the date on which the application is filed, unless the 
     failure is caused by--
       ``(AA) a change in the requirements for approval of the 
     application imposed after the date on which the application 
     is filed; or
       ``(BB) other extraordinary circumstances warranting an 
     exception, as determined by the Secretary.
       ``(ee) Failure to challenge patent.--In a case in which, 
     after the date on which the applicant submitted the 
     application, new patent information is submitted under 
     subsection (c)(2) for the listed drug for a patent for which 
     certification is required under paragraph (2)(A), the 
     applicant fails to submit, not later than the date that is 60 
     days after the date on which the Secretary publishes the new 
     patent information under paragraph (7)(A)(iii) (unless the 
     Secretary extends the date because of extraordinary or 
     unusual circumstances)--
       ``(AA) a certification described in paragraph 
     (2)(A)(vii)(IV) with respect to the patent to which the new 
     patent information relates; or
       ``(BB) a statement that any method of use claim of that 
     patent does not claim a use for which the applicant is 
     seeking approval under this subsection in accordance with 
     paragraph (2)(A)(viii).
       ``(ff) Unlawful conduct.--The Federal Trade Commission 
     determines that the applicant engaged in unlawful conduct 
     with respect to the application in violation of section 1 of 
     the Sherman Act (15 U.S.C. 1).

       ``(IV) Subsequent application.--The term `subsequent 
     application' means an application for approval of a drug that 
     is filed subsequent to the filing of a first application for 
     approval of that drug.

       ``(ii) Forfeiture of 180-day period.--

       ``(I) In general.--Except as provided in subclause (II), if 
     a forfeiture event occurs with respect to a first 
     application--

       ``(aa) the 180-day period under subparagraph (B)(v) shall 
     be forfeited by the first applicant; and
       ``(bb) any subsequent application shall become effective as 
     provided under clause (i), (ii), (iii), or (iv) of 
     subparagraph (B), and clause (v) of subparagraph (B) shall 
     not apply to the subsequent application.

       ``(II) Forfeiture to first subsequent applicant.--If the 
     subsequent application that is the first to be made effective 
     under subclause (I) was the first among a number of 
     subsequent applications to be filed--

       ``(aa) that first subsequent application shall be treated 
     as the first application under this subparagraph (including 
     subclause (I)) and as the previous application under 
     subparagraph (B)(v); and
       ``(bb) any other subsequent applications shall become 
     effective as provided under clause (i), (ii), (iii), or (iv) 
     of subparagraph (B), but clause (v) of subparagraph (B) shall 
     apply to any such subsequent application.
       ``(iii) Availability.--The 180-day period under 
     subparagraph (B)(v) shall be available to a first applicant 
     submitting an application for a drug with respect to any 
     patent without regard to whether an application has been 
     submitted for the drug under this subsection containing such 
     a certification with respect to a different patent.
       ``(iv) Applicability.--The 180-day period described in 
     subparagraph (B)(v) shall apply to an application only if a 
     civil action is brought against the applicant for 
     infringement of a patent that is the subject of the 
     certification.''.
       (b) Applicability.--The amendment made by subsection (a) 
     shall be effective only with respect to an application filed 
     under section 505(j) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 355(j)) after the date of enactment of this 
     Act for a listed drug for which no certification under 
     section 505(j)(2)(A)(vii)(IV) of that Act was made before the 
     date of enactment of this Act, except that if a forfeiture 
     event described in section 505(j)(5)(D)(i)(III)(ff) of that 
     Act occurs in the case of an applicant, the applicant shall 
     forfeit the 180-day period under section 505(j)(5)(B)(v) of 
     that Act without regard to when the applicant made a 
     certification under section 505(j)(2)(A)(vii)(IV) of that 
     Act.

     SEC. 106. FAIR TREATMENT FOR INNOVATORS.

       (a) Basis for Application.--Section 505 of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 355) is amended--
       (1) in subsection (b)(3)(B), by striking the second 
     sentence and inserting ``The notice shall include a detailed 
     statement of the factual and legal basis of the applicant's 
     opinion that, as of the date of the notice, the patent is not 
     valid or is not infringed, and shall include, as appropriate 
     for the relevant patent, a description of the applicant's 
     proposed drug substance, drug formulation, drug composition, 
     or method of use. All information disclosed under this 
     subparagraph shall be treated as confidential and may be used 
     only for purposes relating to patent adjudication. Nothing in 
     this subparagraph precludes the applicant from amending the 
     factual or legal basis on which the applicant relies in 
     patent litigation.''; and
       (2) in subsection (j)(2)(B)(ii), by striking the second 
     sentence and inserting ``The notice shall include a detailed 
     statement of the factual and legal basis of the opinion of 
     the applicant that, as of the date of the notice, the patent 
     is not valid or is not infringed, and shall include, as 
     appropriate for the relevant patent, a description of the 
     applicant's proposed drug substance, drug formulation, drug 
     composition, or method of use. All information disclosed 
     under this subparagraph shall be treated as confidential and 
     may be used only for purposes relating to patent 
     adjudication. Nothing in this subparagraph precludes the 
     applicant from amending the factual or legal basis on which 
     the applicant relies in patent litigation.''.
       (b) Injunctive Relief.--Section 505(j)(5)(B) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(B)) (as 
     amended by section 4(a)(1)) is amended--
       (1) in clause (iii), by adding at the end the following: 
     ``A court shall not regard the extent of the ability of an 
     applicant to pay monetary damages as a whole or partial basis 
     on which to deny a preliminary or permanent injunction under 
     this clause.''; and
       (2) in clause (iv), by adding at the end the following:
       ``(IV) Injunctive relief.--A court shall not regard the 
     extent of the ability of an applicant to pay monetary damages 
     as a whole or partial basis on which to deny a preliminary or 
     permanent injunction under this clause.''.

     SEC. 107. BIOEQUIVALENCE.

       (a) In General.--The amendments to part 320 of title 21, 
     Code of Federal Regulations, promulgated by the Commissioner 
     of Food and Drugs on July 17, 1991 (57 Fed. Reg. 17997 (April 
     28, 1992)), shall continue in effect as an exercise of 
     authorities under sections 501, 502, 505, and 701 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351, 352, 
     355, 371).
       (b) Effect.--Subsection (a) does not affect the authority 
     of the Commissioner of Food and Drugs to amend part 320 of 
     title 21, Code of Federal Regulations.
       (c) Effect of Section.--This section shall not be construed 
     to alter the authority of the Secretary of Health and Human 
     Services to regulate biological products under the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.). Any 
     such authority shall be exercised under that Act as in effect 
     on the day before the date of enactment of this Act.

     SEC. 108. REPORT.

       (a) In General.--Not later than the date that is 5 years 
     after the date of enactment of this Act, the Federal Trade 
     Commission shall submit to Congress a report describing the 
     extent to which implementation of the amendments made by this 
     title--
       (1) has enabled products to come to market in a fair and 
     expeditious manner, consistent with the rights of patent 
     owners under intellectual property law; and
       (2) has promoted lower prices of drugs and greater access 
     to drugs through price competition.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000.

     SEC. 109. CONFORMING AND TECHNICAL AMENDMENTS.

       (a) Section 505.--Section 505 of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 355) is amended--
       (1) in subsection (a), by striking ``(a) No person'' and 
     inserting ``(a) In General.--No person'';
       (2) in subsection (b)--
       (A) by striking ``(b)(1) Any person'' and inserting the 
     following:
       ``(b) Applications.--
       ``(1) Requirements.--
       ``(A) In general.--Any person'';
       (B) in paragraph (1)--
       (i) in the second sentence--

       (I) by redesignating subparagraphs (A) through (F) as 
     clauses (i) through (vi), respectively, and adjusting the 
     margins appropriately;
       (II) by striking ``Such persons'' and inserting the 
     following:

       ``(B) Information to be submitted with application.--A 
     person that submits an application under subparagraph (A)''; 
     and

       (III) by striking ``application'' and inserting 
     ``application--'';

       (ii) by striking the third through fifth sentences; and

[[Page S8010]]

       (iii) in the sixth sentence--

       (I) by striking ``The Secretary'' and inserting the 
     following:

       ``(C) Guidance.--The Secretary''; and

       (II) by striking ``clause (A)'' and inserting 
     ``subparagraph (B)(i)''; and

       (C) in paragraph (2)--
       (i) by striking ``clause (A) of such paragraph'' and 
     inserting ``paragraph (1)(B)(i)'';
       (ii) in subparagraphs (A) and (B), by striking ``paragraph 
     (1) or''; and
       (iii) in subparagraph (B)--

       (I) by striking ``paragraph (1)(A)'' and inserting 
     ``paragraph (1)(B)(i)''; and
       (II) by striking ``patent'' each place it appears and 
     inserting ``claim''; and

       (3) in subsection (c)--
       (A) in paragraph (3)--
       (i) in subparagraph (A)--

       (I) by striking ``(A) If the applicant'' and inserting the 
     following:

       ``(A) Clause (i) or (ii) certification.--If the 
     applicant''; and

       (II) by striking ``may'' and inserting ``shall'';

       (ii) in subparagraph (B)--

       (I) by striking ``(B) If the applicant'' and inserting the 
     following:

       ``(B) Clause (iii) certification.--If the applicant''; and

       (II) by striking ``may'' and inserting ``shall'';

       (iii) by redesignating subparagraph (D) as subparagraph 
     (E); and
       (iv) in subparagraph (E) (as redesignated by clause (iii)), 
     by striking ``clause (A) of subsection (b)(1)'' each place it 
     appears and inserting ``subsection (b)(1)(B)(i)''; and
       (B) by redesignating paragraph (4) as paragraph (5); and
       (4) in subsection (j)--
       (A) in paragraph (2)(A)--
       (i) in clause (vi), by striking ``clauses (B) through 
     ((F)'' and inserting ``subclauses (ii) through (vi) of 
     subsection (b)(1)'';
       (ii) in clause (vii), by striking ``(b) or''; and
       (iii) in clause (viii)--

       (I) by striking ``(b) or''; and
       (II) by striking ``patent'' each place it appears and 
     inserting ``claim''; and

       (B) in paragraph (5)--
       (i) in subparagraph (B)--

       (I) in clause (i)--

       (aa) by striking ``(i) If the applicant'' and inserting the 
     following:
       ``(i) Subclause (i) or (ii) certification.--If the 
     applicant''; and
       (bb) by striking ``may'' and inserting ``shall'';

       (II) in clause (ii)--

       (aa) by striking ``(ii) If the applicant'' and inserting 
     the following:
       ``(i) Subclause (iii) certification.--If the applicant''; 
     and
       (bb) by striking ``may'' and inserting ``shall'';

       (III) in clause (iii), by striking ``(2)(B)(i)'' each place 
     it appears and inserting ``(2)(B)''; and
       (IV) in clause (v) (as redesignated by section 4(a)(1)(B)), 
     by striking ``continuing'' and inserting ``containing''; and

       (ii) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (E) and (F), respectively.
       (b) Section 505A.--Section 505A of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 355a) is amended--
       (1) in subsections (b)(1)(A)(i) and (c)(1)(A)(i)--
       (A) by striking ``(c)(3)(D)(ii)'' each place it appears and 
     inserting ``(c)(3)(E)(ii)''; and
       (B) by striking ``(j)(5)(D)(ii)'' each place it appears and 
     inserting ``(j)(5)(F)(ii)'';
       (2) in subsections (b)(1)(A)(ii) and (c)(1)(A)(ii)--
       (A) by striking ``(c)(3)(D)'' each place it appears and 
     inserting ``(c)(3)(E)''; and
       (B) by striking ``(j)(5)(D)'' each place it appears and 
     inserting ``(j)(5)(F)'';
       (3) in subsections (e) and (l)--
       (A) by striking ``505(c)(3)(D)'' each place it appears and 
     inserting ``505(c)(3)(E)''; and
       (B) by striking ``505(j)(5)(D)'' each place it appears and 
     inserting ``505(j)(5)(F)''; and
       (4) in subsection (k), by striking ``505(j)(5)(B)(iv)'' and 
     inserting ``505(j)(5)(B)(v)''.
       (c) Section 527.--Section 527(a) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 360cc(a)) is amended in the 
     second sentence by striking ``505(c)(2)'' and inserting 
     ``505(c)(1)(B)''.

              TITLE II--IMPORTATION OF PRESCRIPTION DRUGS

     SEC. 201. IMPORTATION OF PRESCRIPTION DRUGS.

       (a) In General.--Chapter VIII of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 381 et seq.) is amended by 
     striking section 804 and inserting the following:

     ``SEC. 804. IMPORTATION OF PRESCRIPTION DRUGS.

       ``(a) Definitions.--In this section:
       ``(1) Importer.--The term `importer' means a pharmacist or 
     wholesaler.
       ``(2) Pharmacist.--The term `pharmacist' means a person 
     licensed by a State to practice pharmacy, including the 
     dispensing and selling of prescription drugs.
       ``(3) Prescription drug.--The term `prescription drug' 
     means a drug subject to section 503(b), other than--
       ``(A) a controlled substance (as defined in section 102 of 
     the Controlled Substances Act (21 U.S.C. 802));
       ``(B) a biological product (as defined in section 351 of 
     the Public Health Service Act (42 U.S.C. 262));
       ``(C) an infused drug (including a peritoneal dialysis 
     solution);
       ``(D) an intravenously injected drug; or
       ``(E) a drug that is inhaled during surgery.
       ``(4) Qualifying laboratory.--The term `qualifying 
     laboratory' means a laboratory in the United States that has 
     been approved by the Secretary for the purposes of this 
     section.
       ``(5) Wholesaler.--
       ``(A) In general.--The term `wholesaler' means a person 
     licensed as a wholesaler or distributor of prescription drugs 
     in the United States under section 503(e)(2)(A).
       ``(B) Exclusion.--The term `wholesaler' does not include a 
     person authorized to import drugs under section 801(d)(1).
       ``(b) Regulations.--The Secretary, after consultation with 
     the United States Trade Representative and the Commissioner 
     of Customs, shall promulgate regulations permitting 
     pharmacists and wholesalers to import prescription drugs from 
     Canada into the United States.
       ``(c) Limitation.--The regulations under subsection (b) 
     shall--
       ``(1) require that safeguards be in place to ensure that 
     each prescription drug imported under the regulations 
     complies with section 505 (including with respect to being 
     safe and effective for the intended use of the prescription 
     drug), with sections 501 and 502, and with other applicable 
     requirements of this Act;
       ``(2) require that an importer of a prescription drug under 
     the regulations comply with subsections (d)(1) and (e); and
       ``(3) contain any additional provisions determined by the 
     Secretary to be appropriate as a safeguard to protect the 
     public health or as a means to facilitate the importation of 
     prescription drugs.
       ``(d) Information and Records.--
       ``(1) In general.--The regulations under subsection (b) 
     shall require an importer of a prescription drug under 
     subsection (b) to submit to the Secretary the following 
     information and documentation:
       ``(A) The name and quantity of the active ingredient of the 
     prescription drug.
       ``(B) A description of the dosage form of the prescription 
     drug.
       ``(C) The date on which the prescription drug is shipped.
       ``(D) The quantity of the prescription drug that is 
     shipped.
       ``(E) The point of origin and destination of the 
     prescription drug.
       ``(F) The price paid by the importer for the prescription 
     drug.
       ``(G) Documentation from the foreign seller specifying--
       ``(i) the original source of the prescription drug; and
       ``(ii) the quantity of each lot of the prescription drug 
     originally received by the seller from that source.
       ``(H) The lot or control number assigned to the 
     prescription drug by the manufacturer of the prescription 
     drug.
       ``(I) The name, address, telephone number, and professional 
     license number (if any) of the importer.
       ``(J)(i) In the case of a prescription drug that is shipped 
     directly from the first foreign recipient of the prescription 
     drug from the manufacturer:
       ``(I) Documentation demonstrating that the prescription 
     drug was received by the recipient from the manufacturer and 
     subsequently shipped by the first foreign recipient to the 
     importer.
       ``(II) Documentation of the quantity of each lot of the 
     prescription drug received by the first foreign recipient 
     demonstrating that the quantity being imported into the 
     United States is not more than the quantity that was received 
     by the first foreign recipient.
       ``(III)(aa) In the case of an initial imported shipment, 
     documentation demonstrating that each batch of the 
     prescription drug in the shipment was statistically sampled 
     and tested for authenticity and degradation.
       ``(bb) In the case of any subsequent shipment, 
     documentation demonstrating that a statistically valid sample 
     of the shipment was tested for authenticity and degradation.
       ``(ii) In the case of a prescription drug that is not 
     shipped directly from the first foreign recipient of the 
     prescription drug from the manufacturer, documentation 
     demonstrating that each batch in each shipment offered for 
     importation into the United States was statistically sampled 
     and tested for authenticity and degradation.
       ``(K) Certification from the importer or manufacturer of 
     the prescription drug that the prescription drug--
       ``(i) is approved for marketing in the United States; and
       ``(ii) meets all labeling requirements under this Act.
       ``(L) Laboratory records, including complete data derived 
     from all tests necessary to ensure that the prescription drug 
     is in compliance with established specifications and 
     standards.
       ``(M) Documentation demonstrating that the testing required 
     by subparagraphs (J) and (L) was conducted at a qualifying 
     laboratory.
       ``(N) Any other information that the Secretary determines 
     is necessary to ensure the protection of the public health.
       ``(2) Maintenance by the secretary.--The Secretary shall 
     maintain information and documentation submitted under 
     paragraph (1) for such period of time as the Secretary 
     determines to be necessary.
       ``(e) Testing.--The regulations under subsection (b) shall 
     require--

[[Page S8011]]

       ``(1) that testing described in subparagraphs (J) and (L) 
     of subsection (d)(1) be conducted by the importer or by the 
     manufacturer of the prescription drug at a qualified 
     laboratory;
       ``(2) if the tests are conducted by the importer--
       ``(A) that information needed to--
       ``(i) authenticate the prescription drug being tested; and
       ``(ii) confirm that the labeling of the prescription drug 
     complies with labeling requirements under this Act;
     be supplied by the manufacturer of the prescription drug to 
     the pharmacist or wholesaler; and
       ``(B) that the information supplied under subparagraph (A) 
     be kept in strict confidence and used only for purposes of 
     testing or otherwise complying with this Act; and
       ``(3) may include such additional provisions as the 
     Secretary determines to be appropriate to provide for the 
     protection of trade secrets and commercial or financial 
     information that is privileged or confidential.
       ``(f) Registration of Foreign Sellers.--Any establishment 
     within Canada engaged in the distribution of a prescription 
     drug that is imported or offered for importation into the 
     United States shall register with the Secretary the name and 
     place of business of the establishment.
       ``(g) Suspension of Importation.--The Secretary shall 
     require that importations of a specific prescription drug or 
     importations by a specific importer under subsection (b) be 
     immediately suspended on discovery of a pattern of 
     importation of the prescription drugs or by the importer that 
     is counterfeit or in violation of any requirement under this 
     section or poses an additional risk to the public health, 
     until an investigation is completed and the Secretary 
     determines that the public is adequately protected from 
     counterfeit and violative prescription drugs being imported 
     under subsection (b).
       ``(h) Approved Labeling.--The manufacturer of a 
     prescription drug shall provide an importer written 
     authorization for the importer to use, at no cost, the 
     approved labeling for the prescription drug.
       ``(i) Prohibition of Discrimination.--
       ``(1) In general.--It shall be unlawful for a manufacturer 
     of a prescription drug to discriminate against, or cause any 
     other person to discriminate against, a pharmacist or 
     wholesaler that purchases or offers to purchase a 
     prescription drug from the manufacturer or from any person 
     that distributes a prescription drug manufactured by the drug 
     manufacturer.
       ``(2) Discrimination.--For the purposes of paragraph (1), a 
     manufacturer of a prescription drug shall be considered to 
     discriminate against a pharmacist or wholesaler if the 
     manufacturer enters into a contract for sale of a 
     prescription drug, places a limit on supply, or employs any 
     other measure, that has the effect of--
       ``(A) providing pharmacists or wholesalers access to 
     prescription drugs on terms or conditions that are less 
     favorable than the terms or conditions provided to a foreign 
     purchaser (other than a charitable or humanitarian 
     organization) of the prescription drug; or
       ``(B) restricting the access of pharmacists or wholesalers 
     to a prescription drug that is permitted to be imported into 
     the United States under this section.
       ``(j) Charitable Contributions.--Notwithstanding any other 
     provision of this section, section 801(d)(1) continues to 
     apply to a prescription drug that is donated or otherwise 
     supplied at no charge by the manufacturer of the drug to a 
     charitable or humanitarian organization (including the United 
     Nations and affiliates) or to a government of a foreign 
     country.
       ``(k) Waiver Authority for Importation by Individuals.--
       ``(1) Declarations.--Congress declares that in the 
     enforcement against individuals of the prohibition of 
     importation of prescription drugs and devices, the Secretary 
     should--
       ``(A) focus enforcement on cases in which the importation 
     by an individual poses a significant threat to public health; 
     and
       ``(B) exercise discretion to permit individuals to make 
     such importations in circumstances in which--
       ``(i) the importation is clearly for personal use; and
       ``(ii) the prescription drug or device imported does not 
     appear to present an unreasonable risk to the individual.
       ``(2) Waiver authority.--
       ``(A) In general.--The Secretary may grant to individuals, 
     by regulation or on a case-by-case basis, a waiver of the 
     prohibition of importation of a prescription drug or device 
     or class of prescription drugs or devices, under such 
     conditions as the Secretary determines to be appropriate.
       ``(B) Guidance on case-by-case waivers.--The Secretary 
     shall publish, and update as necessary, guidance that 
     accurately describes circumstances in which the Secretary 
     will consistently grant waivers on a case-by-case basis under 
     subparagraph (A), so that individuals may know with the 
     greatest practicable degree of certainty whether a particular 
     importation for personal use will be permitted.
       ``(3) Drugs imported from canada.--In particular, the 
     Secretary shall by regulation grant individuals a waiver to 
     permit individuals to import into the United States a 
     prescription drug that--
       ``(A) is imported from a licensed pharmacy for personal use 
     by an individual, not for resale, in quantities that do not 
     exceed a 90-day supply;
       ``(B) is accompanied by a copy of a valid prescription;
       ``(C) is imported from Canada, from a seller registered 
     with the Secretary;
       ``(D) is a prescription drug approved by the Secretary 
     under chapter V;
       ``(E) is in the form of a final finished dosage that was 
     manufactured in an establishment registered under section 
     510; and
       ``(F) is imported under such other conditions as the 
     Secretary determines to be necessary to ensure public safety.
       ``(l) Studies; Reports.--
       ``(1) By the institute of medicine of the national academy 
     of sciences.--
       ``(A) Study.--
       ``(i) In general.--The Secretary shall request that the 
     Institute of Medicine of the National Academy of Sciences 
     conduct a study of--

       ``(I) importations of prescription drugs made under the 
     regulations under subsection (b); and
       ``(II) information and documentation submitted under 
     subsection (d).

       ``(ii) Requirements.--In conducting the study, the 
     Institute of Medicine shall--

       ``(I) evaluate the compliance of importers with the 
     regulations under subsection (b);
       ``(II) compare the number of shipments under the 
     regulations under subsection (b) during the study period that 
     are determined to be counterfeit, misbranded, or adulterated, 
     and compare that number with the number of shipments made 
     during the study period within the United States that are 
     determined to be counterfeit, misbranded, or adulterated; and
       ``(III) consult with the Secretary, the United States Trade 
     Representative, and the Commissioner of Patents and 
     Trademarks to evaluate the effect of importations under the 
     regulations under subsection (b) on trade and patent rights 
     under Federal law.

       ``(B) Report.--Not later than 2 years after the effective 
     date of the regulations under subsection (b), the Institute 
     of Medicine shall submit to Congress a report describing the 
     findings of the study under subparagraph (A).
       ``(2) By the comptroller general.--
       ``(A) Study.--The Comptroller General of the United States 
     shall conduct a study to determine the effect of this section 
     on the price of prescription drugs sold to consumers at 
     retail.
       ``(B) Report.--Not later than 18 months after the effective 
     date of the regulations under subsection (b), the Comptroller 
     General of the United States shall submit to Congress a 
     report describing the findings of the study under 
     subparagraph (A).
       ``(m) Construction.--Nothing in this section limits the 
     authority of the Secretary relating to the importation of 
     prescription drugs, other than with respect to section 
     801(d)(1) as provided in this section.
       ``(n) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.
       ``(o) Conditions.--This section shall become effective only 
     if the Secretary of Health and Human Services certifies to 
     the Congress that the implementation of this section will--
       ``(A) pose no additional risk to the public's health and 
     safety, and
       ``(B) result in a significant reduction in the cost of 
     covered products to the American consumer.''.
       (b) Conforming Amendments.--The Federal Food, Drug, and 
     Cosmetic Act is amended--
       (1) in section 301(aa) (21 U.S.C. 331(aa)), by striking 
     ``covered product in violation of section 804'' and inserting 
     ``prescription drug in violation of section 804''; and
       (2) in section 303(a)(6) (21 U.S.C. 333(a)(6), by striking 
     ``covered product pursuant to section 804(a)'' and inserting 
     ``prescription drug under section 804(b)''.

     SEC. 202. CLARIFICATION OF STATE AUTHORITY RELATING TO 
                   MEDICAID DRUG REBATE AGREEMENTS.

       Section 1927 of the Social Security Act (42 U.S.C. 1396r-8) 
     is amended by adding at the end the following:
       ``(l) Rule of Construction.--Nothing in this section shall 
     be construed as prohibiting a State from--
       ``(1) directly entering into rebate agreements (on the 
     State's own initiative or under a section 1115 waiver 
     approved by the Secretary before, on, or after the date of 
     enactment of this subsection) that are similar to a rebate 
     agreement described in subsection (b) with a manufacturer for 
     purposes of ensuring the affordability of outpatient 
     prescription drugs in order to provide access to such drugs 
     by residents of a State who are not otherwise eligible for 
     medical assistance under this title; or
       ``(2) making prior authorization (that satisfies the 
     requirements of subsection (d) and that does not violate any 
     requirements of this title that are designed to ensure access 
     to medically necessary prescribed drugs for individuals 
     enrolled in the State program under this title) a condition 
     of not participating in such a similar rebate agreement.''.

     SEC. 203. TEMPORARY STATE FISCAL RELIEF.

       (a) Temporary Increase of Medicaid FMAP.--
       (1) Permitting maintenance of fiscal year 2001 fmap for 
     last 2 calendar quarters of fiscal year 2002.--
     Notwithstanding any other provision of law, but subject to 
     paragraph (5), if the FMAP determined without regard to this 
     subsection for a State for

[[Page S8012]]

     fiscal year 2002 is less than the FMAP as so determined for 
     fiscal year 2001, the FMAP for the State for fiscal year 2001 
     shall be substituted for the State's FMAP for the third and 
     fourth calendar quarters of fiscal year 2002, before the 
     application of this subsection.
       (2) Permitting maintenance of fiscal year 2002 fmap for 
     fiscal year 2003.--Notwithstanding any other provision of 
     law, but subject to paragraph (5), if the FMAP determined 
     without regard to this subsection for a State for fiscal year 
     2003 is less than the FMAP as so determined for fiscal year 
     2002, the FMAP for the State for fiscal year 2002 shall be 
     substituted for the State's FMAP for each calendar quarter of 
     fiscal year 2003, before the application of this subsection.
       (3) General 1.35 percentage points increase for last 2 
     calendar quarters of fiscal year 2002 and fiscal year 2003.--
     Notwithstanding any other provision of law, but subject to 
     paragraphs (5) and (6), for each State for the third and 
     fourth calendar quarters of fiscal year 2002 and each 
     calendar quarter of fiscal year 2003, the FMAP (taking into 
     account the application of paragraphs (1) and (2)) shall be 
     increased by 1.35 percentage points.
       (4) Increase in cap on medicaid payments to territories.--
     Notwithstanding any other provision of law, but subject to 
     paragraph (6), with respect to the third and fourth calendar 
     quarters of fiscal year 2002 and each calendar quarter of 
     fiscal year 2003, the amounts otherwise determined for Puerto 
     Rico, the Virgin Islands, Guam, the Northern Mariana Islands, 
     and American Samoa under subsections (f) and (g) of section 
     1108 of the Social Security Act (42 U.S.C. 1308) shall each 
     be increased by an amount equal to 2.7 percent of such 
     amounts.
       (5) Scope of application.--The increases in the FMAP for a 
     State under this subsection shall apply only for purposes of 
     title XIX of the Social Security Act and shall not apply with 
     respect to--
       (A) disproportionate share hospital payments described in 
     section 1923 of such Act (42 U.S.C. 1396r-4); or
       (B) payments under title IV or XXI of such Act (42 U.S.C. 
     601 et seq. and 1397aa et seq.).
       (6) State eligibility.--
       (A) In general.--Subject to subparagraph (B), a State is 
     eligible for an increase in its FMAP under paragraph (3) or 
     an increase in a cap amount under paragraph (4) only if the 
     eligibility under its State plan under title XIX of the 
     Social Security Act (including any waiver under such title or 
     under section 1115 of such Act (42 U.S.C. 1315)) is no more 
     restrictive than the eligibility under such plan (or waiver) 
     as in effect on January 1, 2002.
       (B) State reinstatement of eligibility permitted.--A State 
     that has restricted eligibility under its State plan under 
     title XIX of the Social Security Act (including any waiver 
     under such title or under section 1115 of such Act (42 U.S.C. 
     1315)) after January 1, 2002, but prior to the date of 
     enactment of this Act is eligible for an increase in its FMAP 
     under paragraph (3) or an increase in a cap amount under 
     paragraph (4) in the first calendar quarter (and subsequent 
     calendar quarters) in which the State has reinstated 
     eligibility that is no more restrictive than the eligibility 
     under such plan (or waiver) as in effect on January 1, 2002.
       (C) Rule of construction.--Nothing in subparagraph (A) or 
     (B) shall be construed as affecting a State's flexibility 
     with respect to benefits offered under the State medicaid 
     program under title XIX of the Social Security Act (42 U.S.C. 
     1396 et seq.) (including any waiver under such title or under 
     section 1115 of such Act (42 U.S.C. 1315)).
       (7) Definitions.--In this subsection:
       (A) FMAP.--The term ``FMAP'' means the Federal medical 
     assistance percentage, as defined in section 1905(b) of the 
     Social Security Act (42 U.S.C. 1396d(b)).
       (B) State.--The term ``State'' has the meaning given such 
     term for purposes of title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.).
       (8) Repeal.--Effective as of October 1, 2003, this 
     subsection is repealed.
       (b) Additional Temporary State Fiscal Relief.--
       (1) In general.--Title XX of the Social Security Act (42 
     U.S.C. 1397-1397f) is amended by adding at the end the 
     following:

     ``SEC. 2008. ADDITIONAL TEMPORARY GRANTS FOR STATE FISCAL 
                   RELIEF.

       ``(a) In General.--For the purpose of providing State 
     fiscal relief allotments to States under this section, there 
     are hereby appropriated, out of any funds in the Treasury not 
     otherwise appropriated, $3,000,000,000. Such funds shall be 
     available for obligation by the State through June 30, 2004, 
     and for expenditure by the State through September 30, 2004. 
     This section constitutes budget authority in advance of 
     appropriations Acts and represents the obligation of the 
     Federal Government to provide for the payment to States of 
     amounts provided under this section.
       ``(b) Allotment.--Funds appropriated under subsection (a) 
     shall be allotted by the Secretary among the States in 
     accordance with the following table:

       

------------------------------------------------------------------------
               ``State                       Allotment (in dollars)
------------------------------------------------------------------------
 Alabama                                $33,918,100
 Alaska                                 $8,488,200
 Amer. Samoa                            $88,600
 Arizona                                $47,601,600
 Arkansas                               $27,941,800
 California                             $314,653,900
 Colorado                               $27,906,200
 Connecticut                            $41,551,200
 Delaware                               $8,306,000
 
 District of Columbia                   $12,374,400
 Florida                                $128,271,100
 Georgia                                $69,106,600
 Guam                                   $135,900
 Hawaii                                 $9,914,700
 Idaho                                  $10,293,600
 Illinois                               $102,577,900
 Indiana                                $50,659,800
 Iowa                                   $27,799,700
 Kansas                                 $21,414,300
 Kentucky                               $44,508,400
 Louisiana                              $50,974,000
 Maine                                  $17,841,100
 Maryland                               $44,228,800
 Massachusetts                          $100,770,700
 Michigan                               $91,196,800
 Minnesota                              $57,515,400
 Mississippi                            $35,978,500
 Missouri                               $62,189,600
 Montana                                $8,242,000
 Nebraska                               $16,671,600
 Nevada                                 $10,979,700
 New Hampshire                          $10,549,400
 New Jersey                             $87,577,300
 New Mexico                             $21,807,600
 New York                               $461,401,900
 North Carolina                         $79,538,300
 North Dakota                           $5,716,900
 N. Mariana Islands                     $50,000
 Ohio                                   $116,367,800
 Oklahoma                               $30,941,800
 Oregon                                 $34,327,200
 Pennsylvania                           $159,089,700
 Puerto Rico                            $3,991,900
 Rhode Island                           $16,594,100
 South Carolina                         $38,238,000
 South Dakota                           $6,293,700
 Tennessee                              $81,120,000
 Texas                                  $159,779,800
 Utah                                   $12,551,700
 Vermont                                $8,003,800
 Virgin Islands                         $128,800
 Virginia                               $44,288,300
 Washington                             $66,662,200
 West Virginia                          $19,884,400
 Wisconsin                              $47,218,900
 Wyoming                                $3,776,400
------------------------------------------------------------------------
 Total                                  $3,000,000,000
------------------------------------------------------------------------

       ``(c) Use of Funds.--Funds appropriated under this section 
     may be used by a State for services directed at the goals set 
     forth in section 2001, subject to the requirements of this 
     title.
       ``(d) Payment to States.--Not later than 30 days after 
     amounts are appropriated under subsection (a), in addition to 
     any payment made under section 2002 or 2007, the Secretary 
     shall make a lump sum payment to a State of the total amount 
     of the allotment for the State as specified in subsection 
     (b).
       ``(e) Definition.--For purposes of this section, the term 
     `State' means the 50 States, the District of Columbia, and 
     the territories contained in the list under subsection 
     (b).''.
       (2) Repeal.--Effective as of January 1, 2005, section 2008 
     of the Social Security Act, as added by paragraph (1), is 
     repealed.
       (c) Emergency Designation.--The entire amount necessary to 
     carry out this section is designated by Congress as an 
     emergency requirement pursuant to section 252(e) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 (2 
     U.S.C. 902(e)).
  APPRECIATION TO THE PRESIDING OFFICER
  Mr. REID. Mr. President, I, first of all, would like to express my 
appreciation to the Presiding Officer. This is a duty that you weren't 
expecting, and I am sorry things on the floor took so long. It is my 
understanding that you had other things to do tonight. I really 
apologize for not having someone in relief.

                          ____________________