[Congressional Record (Bound Edition), Volume 146 (2000), Part 16]
[Senate]
[Pages 23154-23155]
[From the U.S. Government Publishing Office, www.gpo.gov]



                   THE AGRICULTURE CONFERENCE REPORT

  Mr. NICKLES. Mr. President, I want to comment on the Agriculture 
conference report that just passed overwhelmingly today in the Senate. 
It already passed the House and it will be going to the President to be 
signed. In my opinion, there are a couple of provisions in this bill 
that really should not have been included and are serious mistakes that 
may come back to haunt Congress or will require Congress to change 
their actions.
  One of them deals with private contracts. I happen to believe very 
strongly in private contracts. I came from the business sector, the 
private sector. When Congress interferes in private contracts, it ought 
to have a good reason. It ought to know what it is doing. Frankly, it 
should hardly ever do so. In this case, we put some language in this 
bill that I venture to say very few of our colleagues--maybe only a 
couple--even know it exists or what its ramifications will be.
  There is language in the Agriculture conference report that doesn't 
deal with Agriculture but deals with reimportation of drugs. Yes, we 
debated reimportation language on the Senate floor, but we didn't 
debate this contracting issue.
  Senator Jeffords offered an amendment dealing with reimportation of 
drugs. However, the amendment offered by Senator Jeffords contained 
some serious flaws, which led me to oppose the amendment. For example, 
the original Senate language included a provision that would have 
established two separate standards for drugs that were sold in the 
United States. One standard, which is current law, with regard to drugs 
that are manufactured and sold in the U.S. And a separate, and in my 
opinion, inferior standard for drugs that are imported or reimported 
into the U.S. Fortunately, the conference agreement corrected the flaws 
of the original Jeffords language and will require that all drugs, 
including those imported by businesses other than the manufacturer, 
must fully comply with Section 505 of the Federal Food, Drug and 
Cosmetic Act. This means that every importer must ensure that all 
safety standards which are included in a new drug approval application 
(NDA) are fully met for every drug which is imported into the U.S. 
Additionally, the conference agreement retained Senator Cochran's 
amendment that perfected and improved the Jeffords amendment to require 
that the Secretary ensure that if drugs are imported, U.S. safety 
standards will be used to ensure that these drugs pose no risk to the 
public health and that consumers will benefit from any potential 
savings prior to this law going into effect. I supported the Cochran 
amendment and I am pleased that this bill included that language.
  However, in conference, new language was added that was not in either 
the House bill or the Senate bill. It wasn't in any of the language 
adopted on the Senate floor. This language states:
  No manufacturer of covered products--[prescription drugs]--may enter 
into a contract or agreement that includes a provision to prevent the 
sale or distribution of covered products under this subsection.
  What does that mean? Well, it means that this Congress could either 
abrogate or direct contracts which don't meet this new federal test. I 
think that is a serious problem. This could make it illegal for a 
patent holder to insert a clause into a private licensing agreement 
with a foreign distributor that prevents a foreign distributor from 
reselling that product for any reason.
  This proposal could prohibit any private agreement that limits or 
restricts the sale of drugs, including quantities, territories, resale 
conditions, or other normal terms of commerce.
  I think this Congress is inappropriately intruding into commerce in 
ways that we don't have any idea what we are doing, what the 
ramifications may be and may in fact be unconsitutional. But that's not 
all. Additionally, the language we have adopted would direct the U.S. 
Government to sanction companies that structure their business 
relationships with foreign distributors in a manner inconsistent with 
the legislation. A lot of these businesses have been doing business 
with people to resell their drugs, and we are going to say they are not 
doing it right so we can fine them. We may in fact require them to sell 
to anybody. Can they resell in any way they want to? Not according to 
this language. So a manufacturer can lose total control of its products 
and this may at some point result in a number of counterfeit drugs and 
other safety problems. How is this type of provision consistent with 
the basic concept of private property and freedom to contract? It is 
not. It really makes no sense. Have we had any hearings on this? No. If 
you restrict this kind of contract for pharmaceutical companies, why in 
the world can't you do it for any other contract? So somebody says, 
wait a minute; this just deals with pharmaceutical products. Frankly, 
if Congress can insert itself

[[Page 23155]]

into contracting language, are we going to do the same thing on 
contracts between auto dealers or other private business.
  There is a little bill floating around that would try to do that. We 
can do it on other contracts where maybe we deem we have superior 
wisdom to all the business groups out there or anybody who has a 
contract, that we know better. What does this language mean? What is 
its impact? We are going to go and give the authority to fine somebody 
if they don't comply. Wow. This is in an appropriations bill. It didn't 
come through the Judiciary Committee or a committee composed of people 
who work on contracts or work on judicial issues. We are setting up 
that kind of a program, and I am embarrassed for us to do that.
  This type of legislating sets a horrible precedent for other 
businesses as well. It is not appropriate for this Congress to force 
American manufacturers to sell their products to consumers that they do 
not want to sell to under contract terms that the federal government 
approves. This type of requirement is unfair and lacks common sense. I 
predict it will raise serious constitutional questions as well and may 
interfere with the exercise of intellectual property rights. It is 
unfortunate that this language was included in this bill. I think this 
is a serious mistake.
  It is somewhat similar to another mistake, in my opinion, included in 
this bill, which is title X, the continued dumping and subsidies 
offset. It is a brand new provision. It is a provision inserted in the 
Agriculture conference. It deals with subsidies and with dumping. Those 
are trade issues, trade sanctions, usually handled in the Ways and 
Means Committee in the House and the Finance Committee in the Senate. 
This didn't go through either. I will tell my colleagues this provision 
could not pass the Finance Committee. It could not pass the Ways and 
Means Committee.
  This runs directly contrary, frankly, to free trade and the idea of 
trying to expand trade. This says if you have a dumping complaint, and 
if you happen to win, the benefits go back directly to that company, 
directly to the individuals involved. So there is a reward and 
incentive that if you file a dumping complaint and win, you will 
receive benefits. This encourages lawsuits on dumping because you can 
win the ``lottery.'' Here they come. It doesn't make sense. It is 
probably not WTO consistent. This says ``consistent with the rights 
under the World Trade Organization.'' I venture to say that it is not 
consistent with WTO rights in any way, shape, or form. It will probably 
be thrown out by the courts.
  Why are we doing this? I am on the Finance Committee, and did we have 
a hearing on this? No, we did not. Did the Ways and Means Committee 
have a hearing on this? I don't believe so. But all of a sudden, it is 
inserted into a conference report which is not amendable. Some 
colleagues say they don't like this process. I don't like this process 
either. I think it is bad legislation. I think it can come back to 
haunt us, and we could be talking about hundreds and hundreds of 
millions of dollars from this provision alone.
  Again, how many colleagues are even aware that this is in the bill? 
We have committees of jurisdiction, such as the Judiciary Committee, 
that should be dealing with contracts and they should have handled this 
contracting issue. My guess is that they would have scrubbed it and 
done a better job. The Finance Committee, which deals with trade, would 
totally reject this idea of rewarding people if they file successful 
dumping lawsuits.
  Mr. President, it is with regret that I say there are other aspects 
of this Agriculture appropriations bill, which has grown substantially, 
that bother this Senator. We would end up passing a bill that increases 
budget authority over the President by 22 percent in outlays and 24 
percent in budget authority. That bothers me. It bothers me when we see 
growth in the discretionary portion of this bill to that extent--to be 
growing at 24 percent I don't think is affordable or responsible. I 
could go on.
  Also, there are expansions of entitlements. I remember earlier this 
year when we passed emergency assistance, and we busted that. We busted 
it big time. I understand there are a lot of problems. We had a drought 
as bad as anybody. Texas suffered from a drought and so did we. This is 
fiscally irresponsible, in my opinion. And because of the provision 
dealing with dumping and the abrogation of contracts, or the changing 
of contracts, and the total cost of this bill, regretfully, this 
Senator had to vote against the Agriculture conference report.
  I see my colleague from Alabama is here. I am prepared to wrap up. 
How long does he wish to speak?
  Mr. SESSIONS. Fifteen minutes.
  Mr. NICKLES. I will give the Senator from Alabama the pleasure of 
closing the Senate then.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Brownback). The Senator from Alabama is 
recognized.

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