[Congressional Record Volume 152, Number 95 (Wednesday, July 19, 2006)]
[Senate]
[Pages S7927-S7928]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself, Mr. Schumer, and Mr. Leahy):
  S. 3695. A bill to amend the Federal Food, Drug, and Cosmetic Ad to 
prohibit the marketing of authorized generic drugs; to the Committee on 
Health, Education, Labor, and Pensions.
  Mr. ROCKEFELLER. Mr. President, I rise today with Senators Schumer 
and Leahy to introduce an important piece of legislation for seniors, 
individual with disabilities, children, and anyone who is taking a 
brand name prescription drug with a generic equivalent. The bill we are 
introducing today would outlaw the latest in a long line of loopholes 
that brand name manufacturers have found to limit generic drug access 
to the market.
  Our legislation would prohibit brand name manufacturers from 
introducing so-called ``authorized generics'' during the 180-day period 
that Congress intended true generics to have exclusive market rights. 
Some of my colleagues may be wondering what an ``authorized generic'' 
is.
  An authorized generic drug is a brand name prescription drug produced 
by the same brand manufacturer on the same manufacturing lines, yet 
repackaged as a generic in order to confuse consumers and shut true 
generics out of the market. This is a huge problem and one that is 
becoming even more prevalent as patents on some of the best-selling 
brand name pharmaceuticals start to expire.
  Pravachol, Zocor and Zoloft have patents that have expired or will 
expire this year. Together, these drugs account for approximately $9 
billion in sales annually. In 2007, another top-selling brand name 
drug, Norvasc, will lose its patent protection, followed by Advair the 
following year.
  When brand name drugs lose patent rights, this opens the door for 
consumers, employers, third-party payers, and other purchasers to save 
billions--between 50 and 80 percent on the costs of prescriptions--by 
using generic versions of these drugs. Brand name drug companies are 
expected to lose as much as $75 billion over the next 5 years as some 
of their best sellers go off-patent and generic competition increases. 
So, not surprisingly, these big pharmaceutical companies are 
desperately trying to protect their market share and prevent consumers 
from cashing in on savings from generic drugs.
  We have addressed this issue before. In 1984, Congress passed the 
Hatch-Waxman legislation to provide consumers greater access to lower 
cost generic drugs. The intent of this law was to improve generic 
competition, while preserving the ability of brand name manufacturers 
to discover and market new and innovative products. As part of this 
law, the first generic company on the market after challenging an 
expiring brand name patent is granted 180-days of exclusive market 
rights, which is just a fraction of the up to 20 years of exclusive 
market rights afforded brand companies.
  This 6-month incentive is crucial to maintaining the balance between 
encouraging brand drug companies to make new drugs and encouraging 
generic drug companies to make existing drugs more affordable. 
Challenging a brand name drug's patent takes time, money, and involves 
absorbing a great deal of risk. Generic drug companies rely on the 
added revenue provided by the l80-day exclusivity period to recoup 
their costs, fund new patent challenges where appropriate, and 
ultimately pass savings onto consumers.
  This latest attempt by big drug companies to protect their profits 
puts billions of dollars in savings for consumers in jeopardy. The bill 
we are introducing today eliminates the authorized generic loophole, 
protects the integrity of the 180 days, and improves consumer access to 
lower-cost generic drugs. I urge my colleagues to support this timely 
and important piece of legislation.

[[Page S7928]]

  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3695

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

     SECTION 1. PROHIBITION OF AUTHORIZED GENERICS.

       Section 505 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 355) is amended by adding at the end the following:
       ``(o) Prohibition of Authorized Generic Drugs.--
       ``(1) In general.--Notwithstanding any other provision of 
     this Act, no holder of a new drug application approved under 
     subsection (c) shall manufacture, market, sell, or distribute 
     an authorized generic drug, direct or indirectly, or 
     authorize any other person to manufacture, market, sell, or 
     distribute an authorized generic drug.
       ``(2) Authorized generic drug.--For purposes of this 
     subsection, the term `authorized generic drug'--
       ``(A) means any version of a listed drug (as such term is 
     used in subsection (j)) that the holder of the new drug 
     application approved under subsection (c) for that listed 
     drug seeks to commence marketing, selling, or distributing, 
     directly or indirectly, after receipt of a notice sent 
     pursuant to subsection (j)(2)(B) with respect to that listed 
     drug; and
       ``(B) does not include any drug to be marketed, sold, or 
     distributed--
       ``(i) by an entity eligible for exclusivity with respect to 
     such drug under subsection (j)(5)(B)(iv); or
       ``(ii) after expiration or forfeiture of any exclusivity 
     with respect to such drug under such subsection 
     (j)(5)(B)(iv).''.

  Mr. LEAHY. Mr. President, recently I was pleased to introduce with 
Senators Kohl, Grassley and Schumer, the Preserve Access to Affordable 
Generics Act of 2006, S. 3582. That bill was designed to improve the 
timely and effective introduction of generic pharmaceuticals into the 
marketplace.
  It is no secret that prescription drug prices are rapidly increasing 
and are a source of considerable concern to many Americans, especially 
senior citizens and families. In a marketplace free of manipulation, 
generic drug prices can be as much as 80 percent lower than the 
comparable brand name version. Unfortunately, there are still some 
companies driven by greed that may be keeping low-cost, life-saving 
generic drugs off the marketplace, off pharmacy shelves, and out of the 
hands of consumers by carefully crafted anticompetitive agreements 
between drug manufacturers.
  In 2001, and last Congress, I introduced a related bill, the 
Competition Act. That bill, which is now law, is small in terms of 
length but large in terms of impact. It ensured that law enforcement 
agencies could take quick and decisive action against companies seeking 
to cheat consumers by delaying availability of generic medicines. It 
gave the Federal Trade Commission and the Justice Department access to 
information about secret deals between drug companies that keep generic 
drugs out of the market--a practice that not only hurts American 
families, particularly senior citizens, by denying them access to low-
cost generic drugs, but also contributes to rising medical costs.
  The Drug Competition Act, which was incorporated in the Medicare 
Modernization Act, was a bipartisan effort to protect consumers in need 
of patented medicines who were being forced to pay considerably higher 
costs because of collusive secret deals designed. It is regrettable 
that we must come to the floor again today and take additional action 
to prevent drug companies from continuing to find and exploit 
loopholes.
  The bill I am introducing tonight with Senators Rockefeller and 
Schumer is very important. It will provide incentives for generic 
companies to make the investments needed to introduce low-cost generic 
medicines for all our citizens.
  The bill assures all Americans that the original intent of the Hatch-
Waxman law is carried out. That law was to provide incentives for 
generic companies to challenge the validity of patents on medicines and 
provide incentives for generic companies to manufacture low-cost 
medicines. That incentive was simple.
  Under Hatch-Waxman law, the first generic company, called the first-
filer, which successfully develops a generic version of a patented drug 
and meets certain other requirements, can get a 180-day exclusivity 
period to be the only generic company to have permission to make and 
sell that generic drug.
  That was called an exclusivity period because that is what the 
Congress intended--that generic company would have the exclusive right 
for 180 days to make the generic version of the patented medicine.
  The problem is that recently brand-name companies have been labeling 
their own patented drugs also as a generic version of itself, or 
licensing others to make it, and selling both the brand-name version 
and the so-called generic version. This undercuts the potential profits 
of the ``real'' generic company and denies them what the Hatch-Waxman 
law promised and for a long time delivered--an exclusivity period 
lasting up to 180 days.
  When the brand-name company offers a competing ``fake'' generic 
version of the drug, that can cut the profits of the real generic 
manufacturer greatly--thus making it less likely that a real generic 
company will even want to make the product.
  The Rockefeller bill prevents the brand-name company from doing that 
for the 180-day exclusivity period. I hope my colleagues will join me 
in supporting this effort.

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