[Congressional Record (Bound Edition), Volume 148 (2002), Part 10]
[Senate]
[Pages 13189-13204]
[From the U.S. Government Publishing Office, www.gpo.gov]




        GREATER ACCESS TO AFFORDABLE PHARMACEUTICALS ACT OF 2001

  The PRESIDING OFFICER. Under the previous order, the motion to 
proceed is agreed to and the clerk will report the bill.
  The assistant legislative clerk read as follows:

       A bill (S. 812) to amend the Federal Food, Drug, and 
     Cosmetic Act to provide greater access to affordable 
     pharmaceuticals.


[[Page 13190]]


  The Senate proceeded to consider the bill, which had been reported 
from the Committee on Health, Education, Labor, and Pensions, with an 
amendment, as follows:
  (The parts of the bill intended to be stricken are shown in boldface 
brackets and the parts of the bill intended to be inserted are shown in 
italics.)

                                 S. 812

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Greater Access to Affordable 
     Pharmaceuticals Act of 2001''.

     SEC. 2. 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 Act 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. 3. 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
       ``(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:


[[Page 13191]]


     ``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. 4. 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. 5. 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.
       ``(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

[[Page 13192]]

     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. 6. 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. 7. 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. 8. 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 
     Act--
       (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. 9. 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
       (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)--

[[Page 13193]]

       (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)''.

  The PRESIDING OFFICER. The majority leader.
  Mr. DASCHLE. Mr. President, I will propound a unanimous consent 
request. It has been agreed to on both sides. And then I would like to 
put the Senate in a quorum call so we might proceed in an organized 
way. I think we are just about there.
  I ask unanimous consent that the committee-reported amendment be 
considered and agreed to, and the motion to reconsider be laid upon the 
table; that the bill, as thus amended, be considered as original text 
for the purpose of further amendment; that no points of order be 
considered waived by virtue of this agreement.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The committee amendment was agreed to.
  Mr. DASCHLE. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Ms. Stabenow). Without objection, it is so 
ordered.
  Mr. REID. Madam President, I ask unanimous consent the Senator from 
Arizona be recognized for up to 15 minutes and that I get the floor 
following the completion of his statement.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. The Senator from Arizona has indicated this is for debate 
only.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Arizona is recognized for up to 15 minutes.
  Mr. McCAIN. Madam President, I thank the Senator from Nevada.
  It is time to talk about the bill that is before us which, as we all 
know, is going to be used as a vehicle to attempt to address the very 
controversial issue of prescription drug benefits for Medicare.
  I also thank the Senator from Massachusetts for passing this bill 
through his committee and reporting it to the floor.
  I thank especially Senator Schumer who really is the person 
responsible for this legislation. All of us like to take credit for 
things in this body. The fact is, the reality is, Senator Schumer 
brought this issue, certainly the idea for this legislation, to my 
attention. He is the one who really worked on it. I am grateful he 
included me in this very important issue.
  It is important to the people of my State and to all Americans. As we 
all know, there are large numbers of retirees who have been intelligent 
enough to move from New York to Arizona, and they are deeply affected 
by the cost of prescription drugs.
  Mr. SCHUMER. Will the Senator yield for a brief comment?
  Mr. McCAIN. I am glad to yield to the Senator from New York.
  Mr. SCHUMER. I thank my friend. I want to thank him. We have been in 
this together from the beginning--almost 2 years ago, when we realized 
that something had to be done. His steadfastness, his courage, and his 
constant efforts to refine the legislation and make it better and make 
sure we bring it to the floor has been a large part of why we are here. 
I thank the Senator for being a great colleague with whom to work. I 
wanted to repay the accolades and compliment of the Senator.
  Mr. McCAIN. I thank my friend from New York. Again, I reiterate that 
he really is the one who has been the leader in this issue and in this 
legislation. He is also well known for his tenacity.
  Madam President, first of all, I think we also ought to understand 
that this issue alone--that of getting affordable drugs to all 
Americans--obviously, as I spoke of before, particularly seniors and 
those on fixed retirement incomes are the ones most dramatically 
affected. That is a critical issue in America today. I don't claim that 
this bill before us solves the problem of providing prescription drugs 
for all Americans, particularly seniors, but I do argue that this is a 
very important step in the right direction in lowering the cost of 
prescription drugs to all Americans.
  Now, the drug companies have mounted a massive attack on this 
legislation. They were the major contributors in recent fundraisers on 
both sides of the aisle. It is not complicated. The bill is not 
complicated. It only has three or four provisions. Basically, what it 
achieves is an ability to do what the Hatch-Waxman bill was intended to 
do, and that is to make available generic drugs as early as possible, 
with respect for the rights of those who invested massive amounts of 
money, in many cases, in research and development and testing, and for 
them to have an adequate return on their investment. There is no intent 
here to harm the drug companies. What it is intended to do is to get 
drugs to the market in the generic fashion so people would only have to 
pay less.
  Madam President, Allen Feezor, CalPERS' Assistant Executive Officer 
for Health Benefits, said:

       In two of the past three years, pharmaceutical costs have 
     increased more than any other component in our CalPERS health 
     rate.


[[Page 13194]]


  CalPERS is the retirement plan for California employees, which are 
very large in number.

       In our Medicare Choice/Supplemental plans, pharmacy trend 
     can account for over 50 percent of the increase in premium 
     rates that we see in our retiree plans one year to the next.

  The obvious result is very clear. Every year, prescription drugs 
become less and less affordable to all Americans but especially 
retirees. It should be noted. He goes on to say:

       It should be noted that in both our hospital and 
     [prescription drug] trends, a measurable portion of the trend 
     is due to increased utilization by our enrollees, but this 
     cannot take away from the extraordinarily high trends in both 
     pharmacy and hospital pricing.

  The rising cost of prescription drugs is also playing a significant 
role in the growing financial burden companies experience as they 
struggle to provide employees with health care coverage. For example, 
General Motors, the largest provider of private sector health care 
coverage, spends over $4 billion a year to insure over 1.2 million 
workers, retirees and their dependents, $1.3 billion of which is on 
prescription drugs alone. Even with aggressive cost-saving mechanisms 
in place, GM's prescription drug costs continue to rise between 15 
percent and 20 percent per year.
  Given the crises in both corporate America and our Nation's health 
care system, anticompetitive behavior in the marketplace is 
particularly onerous. That is what we are trying to get at, the 
anticompetitive behavior. This legislation is intended not to weaken 
patent laws to the detriment of the pharmaceutical industry, nor is it 
to impede the tremendous investments they make in the research and 
development of new drugs. The purpose of the underlying legislation is 
to close loopholes in the Hatch-Waxman act, and to ensure more timely 
access to generic medications. This is an important distinction which 
must be made clear.
  However, to believe that patent laws are not being abused is to 
ignore the mountain of testimony from consumers, industry analysts, and 
the Federal Trade Commission. The Commerce Committee heard testimony 
regarding the extent by which pharmaceutical companies, including 
generic manufacturers, engage in anticompetitive activities and impede 
access to affordable medications. During that hearing, Chairman Muris, 
of the FTC, testified:

       In spite of this remarkable record of success, the Hatch-
     Waxman amendments have also been subject to abuse. Although 
     many drug manufacturers, including both branded companies and 
     generics, have acted in good faith, some have attempted to 
     ``game'' the system, securing greater profits for themselves 
     without providing a corresponding benefit to consumers.

  The intent of the Hatch-Waxman act was to address the escalating 
costs of prescription drugs by encouraging generic competition, while 
at the same time providing incentives for brand name drug companies to 
continue research and development into new and more advanced drugs. To 
a large extent, Hatch-Waxman has succeeded in striking that difficult 
balance between bringing new lower cost alternatives to consumers, 
while encouraging more investment in U.S. pharmaceutical research and 
development.
  In the 15 years since the enactment of Hatch-Waxman, research and 
development has increased from $3 billion to $21 billion. However, some 
bad actors have manipulated the law in a manner that delays and, at 
times, prohibits generics from entering the marketplace.
  I believe this legislation will improve the current system while 
preserving the intent of Hatch-Waxman. This legislation is not an 
attempt to jeopardize the patent rights of innovative companies, nor 
does it seek to provide unfair advantage to generic manufacturers. 
Rather, the intent of this legislation is to strike a balance between 
these two interests so that we can close the loopholes that allow some 
companies to engage in anticompetitive actions by unfairly prolonging 
patents or eliminating fair competition. In doing so, we offer 
consumers more choice in the marketplace.
  It is imperative that Congress build upon the strengths of our 
current health care system while addressing its weaknesses. This should 
not be done by imposing price controls or creating a universal, 
Government-run health care system. Rather, a balance must be found that 
protects consumers with market-based, competitive solutions without 
allowing those protections to be manipulated at the consumers' expense, 
particularly senior citizens and working families without health care 
insurance.
  Madam President, today, there are probably buses leaving places in 
the Northeast and in the Southwest, loaded with seniors who are going 
either to Mexico or Canada to purchase drugs, which will probably cost 
them around half of what they would at their local pharmacy. There are 
people today, as we speak, who are making a choice between their health 
and their income. That is wrong. It is wrong. It is wrong when patent 
drug companies game the system by doing things like bringing suits, 
which then delays the implementation. It is wrong when the patent drug 
companies actually pay generic drug companies not to produce a 
particular prescription drug while they continue their profits, and it 
is wrong to game this system.
  So here we are with a bill that with proper debate and perhaps 
amendments, could be passed by this body and is supported by an 
overwhelming number of consumer organizations. Even the patent drug 
companies and the generic drug companies themselves will admit that we 
need to make reforms.
  Unfortunately, this statement that I have made and those made by 
Senator Schumer may be the only debate we have on this legislation 
which could be passed between now and September. So what are we going 
to do? What we are really going to do is have a debate over the 
prescription drug issue, Medicare, and that will bog us down with 
competing proposals, all of which will require 60 votes, and none of 
which has the 60 votes. At the end of 2 weeks, rather than passing this 
bill, which we should, we are going to say, oops, we really cannot come 
to an agreement, and if we did have an agreement, the House bill is 
very different, and we would have to go to a conference, from which 
bills would never emerge.
  I think the American people deserve better. Why do we not pass this 
underlying bill, or at least make a commitment to pass this underlying 
bill, if the competing proposals that will be before us on Medicare 
prescription drugs do not receive 60 votes?
  What I am afraid is going to happen is that none of the three will 
receive 60 votes. Then we will drop the bill and move on to other 
issues, and I think that is wrong. I think we know that with this 
approach, this underlying legislation, with some changes, absent, of 
course, the huge campaign contributions of the drug companies, we could 
reach an agreement which would be fair to the prescription drug 
companies, fair to the generics, and fair to the American public, and, 
indeed, in the view of anyone, including a recent study by the Federal 
Trade Commission that shows that these abuses are having a direct 
impact on the increasing costs of prescription drugs to all Americans 
particularly.
  I remind my colleagues that we may be doing an injustice and a 
disservice to Americans for this year by not addressing this particular 
aspect of it and having it encumbered and bogged down by competing 
proposals.
  I believe this legislation is fairly simple. It passed through the 
committee of jurisdiction with half of the Republican members voting 
for it. I know Senator Gregg, the ranking member, has some problems 
with it. I think with debate, amendment, and discussion, we could 
resolve those concerns that we might have and move forward.
  Mr. GREGG. Will the Senator yield for a question?
  Mr. McCAIN. I would be glad to yield.
  Mr. GREGG. The Senator characterizes my views accurately, and I agree 
with the Senator that this bill should be moved independent of the drug 
bill. Unfortunately, the greater issue, or game, of the drug fight has 
been set up to lose so that nothing will happen, as

[[Page 13195]]

the Senator from Arizona so appropriately pointed out. I do think this 
is important legislation. I hope we will pass it somehow.
  My concerns go to the expansion of lawsuits under the new cause of 
action. Much of the rest of the bill--in fact the vast majority of the 
rest of the bill--I think is excellent. I appreciate the work of the 
Senator from Arizona in bringing it forward.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. McCAIN. I ask unanimous consent for an additional 5 minutes, for 
debate purposes only.
  Mr. REID. Under the same conditions we put forward earlier.
  The PRESIDING OFFICER. There is no objection under the same 
conditions: When the Senator has completed, the Senator from Nevada 
will be recognized.
  Mr. McCAIN. I thank the Senator from Nevada.
  Again, I thank the Senator from Massachusetts for getting this bill 
through the committee. I thank Senator Gregg from New Hampshire for his 
willingness to work with us, even though he has a couple of concerns 
that I think we could work out.
  I urge my colleagues again, if the Medicare prescription drug issue 
is not resolved, to go back to the underlying bill, pass it, and 
perhaps we can give the American people at least some relief between 
now and next year.
  This issue is not going away. Maybe after this year's elections we 
could try to address it in a more nonpartisan fashion.
  On another issue, very briefly, in this morning's Washington Post 
there is an article by Mr. Andrew Grove, who is the chairman of the 
Intel Corporation. I believe he is one of the most respected men in 
America. He makes a case that is very important. He outlines some of 
the changes he thinks need to be made in the area of increasing 
corporate responsibility. I think it is worthwhile to be included in 
the Record.
  I ask unanimous consent that the article appearing in the Washington 
Post by Andrew S. Grove called ``Stigmatizing Business'' be printed in 
the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                         Stigmatizing Business

                          (By Andrew S. Grove)

       I grew up in Communist Hungary. Even though I graduated 
     from high school with excellent grades, I had no chance of 
     being admitted to college because I was labeled a ``class 
     alien.'' What earned me this classification was the mere fact 
     that my father had been a businessman. It's hard to describe 
     the feelings of an 18-year-old as he grasps the nature of a 
     social stigma directed at him. But never did I think that, 
     nearly 50 years later and in a different country, I would 
     feel some of the same emotions and face a similar stigma.
       Over the past few weeks, in reaction to a series of 
     corporate scandals, the pendulum of public feeling has swung 
     from celebrating business executives as the architects of 
     economic growth to condemning them as a group of 
     untrustworthy, venal individuals.
       I have been with Intel since its inception 34 years ago. 
     During that time we have become the world's largest chip 
     manufacturer and have grown to employ 50,000 workers in the 
     United States, whose average pay is around $70,000 a year. 
     Thousands of our employees have bought houses and put their 
     children through college using money from stock options. A 
     thousand dollars invested in the company when it went public 
     in 1971 would be worth about $1 million today, so we have 
     made many investors rich as well.
       I am proud of what our company has achieved. I should also 
     feel energized to deal with the challenges of today since we 
     are in one of the deepest technology recessions ever. 
     Instead, I'm having a hard time keeping my mind on our 
     business. I feel hunted, suspect--a ``class alien'' again.
       I know I'm not alone in feeling this way. Other honest, 
     hard-working and capable business leaders feel similarly 
     demoralized by a political climate that has declared open 
     season on corporate executives and has let the faults, 
     however egregious, of a few taint the public perception of 
     all. This just at a time when their combined energy and 
     concentration are what's needed to reinvigorate our economy. 
     Moreover, I wonder if the reflexive reaction of focusing all 
     energies on punishing executives will address the problems 
     that have emerged over the past year.
       Today's situation reminds me of an equally serious attack 
     on American business, one that required an equally serious 
     response. In the 1980s American manufacturers in industries 
     ranging from automobiles to semiconductors to photocopiers 
     were threatened by a flood of high-quality Japanese goods 
     produced at lower cost. Competing with these products exposed 
     the inherent weakness in the quality of our own products. It 
     was a serious threat. At first, American manufacturers 
     responded by inspecting their products more rigorously, 
     putting ever-increasing pressure on their quality assurance 
     organizations. I know this firsthand because this is what we 
     did at Intel.
       Eventually, however, we and other manufacturers realized 
     that if the products were of inherently poor quality, no 
     amount of inspection would turn them into high-quality goods. 
     After much struggle--hand-wringing, finger-pointing, 
     rationalizing and attempts at damage control--we finally 
     concluded that the entire system of designing and 
     manufacturing goods, as well as monitoring the production 
     process, had to be changed. Quality could only be fixed by 
     addressing the entire cycle, from design to shipment to the 
     customer. This rebuilding from top to bottom led to the 
     resurgence of U.S. manufacturing
       Corporate misdeeds, like poor quality, are a result of a 
     systemic problem, and a systemic problem requires a systemic 
     solution. I believe the solutions that are needed all fit 
     under the banner of ``separation of powers.''
       Let's start with the position of chairman of the board of 
     directors. I think it is universally agreed that the 
     principal function of the board is to supervise and, if need 
     be, replace the CEO. Yet, in most American corporations, the 
     board chairman is the CEO. This poses a built-in conflict. 
     Reform should start with separating these two functions. (At 
     various times in Intel's history we have combined the 
     functions, but no longer). Furthermore stock exchanges should 
     require that boards of directors be predominantly made up of 
     independent members having no financial relationship with the 
     company. Separation of the offices of chairman and CEO, and a 
     board with something like a two-thirds majority of 
     independent directors, should be a condition for listing on 
     stock exchanges.
       In addition, auditors should provide only one service: 
     auditing. Many auditing firms rely on auxiliary services to 
     make money, but if the major stock exchanges made auditing by 
     ``pure'' firms a condition for listing, auditing would go 
     from being a loss leader for these companies to a profitable 
     undertaking. Would this drive the cost of auditing up? Beyond 
     a doubt. That's a cost of reform.
       Taking the principle a step further, financial analysts 
     should be independent of the investment banks that do 
     business with corporations, a condition that could do 
     business with corporations, a condition that could and should 
     be required and monitored by the Securities and Exchange 
     Commission.
       The point is this: The chairman, board of directors, CEO, 
     CFO, accountants and analysts could each stop a debacle from 
     developing. A systemic approach to ensuring the separation of 
     powers would put them in a position where they would be free 
     and motivated to take action.
       I am not against prosecuting individuals responsible for 
     financial chicanery and other bad behavior. In fact, this 
     must be done. But tarring and feathering CEOs and CFOs as a 
     class will not solve the underlying problem. Restructuring 
     and strengthening the entire system of checks and balances of 
     the institutions that make up and monitor the U.S. capital 
     markets would serve us far better.
       Reworking design, engineering and manufacturing processes 
     to meet the quality challenge from the Japanese in the 1980s 
     took five to 10 years. It was motivated by tremendous losses 
     in market share and employment. Similarly, the tremendous 
     loss of market value from the recent scandals provides a 
     strong motivation for reform. But let us not kid ourselves. 
     Effective reform will take years of painstaking 
     reconstruction.
       Our society faces huge problems. Many of our citizens have 
     no access to health care; some of our essential 
     infrastructure is deteriorating; the war on terror and our 
     domestic security require additional resources. Attacking 
     these problems requires a vital economy. Shouldn't we take 
     time to think through how we can address the very real 
     problems in our corporations without demonizing and 
     demoralizing the managers whose entrepreneurial energy is 
     needed to drive our economy?
  Mr. McCAIN. I will read the last paragraph of Mr. Grove's column. He 
said:

       Our society faces huge problems. Many of our citizens have 
     no access to health care; some of our essential 
     infrastructure is deteriorating; the war on terror and our 
     domestic security require additional resources. Attacking 
     these problems requires a vital economy. Shouldn't we take 
     time to think through how we can address the very real 
     problems in our corporations without demonizing and 
     demoralizing the managers whose entrepreneurial energy is 
     needed to drive our economy?

  I might point out that a number of the proposals Mr. Grove has made 
are not incorporated in the Sarbanes bill, and if we have to go back 
and revisit this issue, which I am afraid we might,

[[Page 13196]]

I hope everyone will pay attention to some of his proposals.
  As is well known to most of us, Mr. Grove grew up in Communist 
Hungary, escaped at a very early age. He wrote a marvelous book about 
it. It is a great American success story. I think he is one of the most 
respected men in America. He has been at Intel since its inception 34 
years ago, and it has become the world's largest chip manufacturer and 
grown to employ 50,000 workers in the United States, whose average pay 
is around $70,000 a year.
  So I hope we will pay attention to Mr. Grove's recommendations, as 
well as his statements of principle.
  I thank my colleagues for allowing me to debate the bill, and I yield 
back the remainder of my time.
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 4299

 (Purpose: To permit commercial importation of prescription drugs from 
                                Canada)

  Mr. REID. Madam President, I send an amendment to the desk on behalf 
of Senators Dorgan, Wellstone, and Stabenow.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Dorgan, Mr. 
     Wellstone, Mr. Jeffords, Ms. Stabenow, Ms. Collins, Mr. 
     Levin, Mr. Johnson, Mr. Miller, Mr. Durbin, and Mr. Feingold, 
     proposes an amendment numbered 4299.

  Mr. REID. I ask unanimous consent reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. REID. Mr. President, I ask for the yeas and nays on this 
amendment.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second. The yeas and nays are ordered.


                Amendment No. 4300 to Amendment No. 4299

          (Purpose: To provide a substitute for the amendment)

  Mr. REID. I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Dorgan, 
     proposes an amendment numbered 4300 to amendment No. 4299.

  Mr. REID. Madam President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. REID. Madam President, we appreciate the cooperation of the 
managers of this bill. At this point, we are now going to be in a 
posture to debate drug reimportation. We would hope we could have time 
agreements on this on whatever the minority wishes to offer.
  Prior to that, I ask unanimous consent the Senator from Maine, Ms. 
Snowe, be recognized for 20 minutes to speak on the bill, or whatever 
she chooses to speak on.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. SNOWE. Madam President, I rise today to begin a discussion on the 
prescription drug benefit and specifically the one that has been 
introduced by the tripartisan group including Senator Grassley, Senator 
Breaux, Senator Jeffords, Senator Hatch, and myself.
  Before I proceed, I express my support for the amendment offered by 
Senator Dorgan regarding reimportation. I have long supported that 
initiative. Many of my seniors in the State of Maine have to travel 
across the border into Canada in order to get prescription drugs that 
are offered lower there than in the United States. It is a tragedy that 
compels seniors to be put in a situation where they have to cross the 
border in order to do that. I hope we can support that amendment so 
they can have the benefit of those lower priced prescription drugs in 
the United States. It is the only fair approach. It is one way of 
addressing the issue of controlling costs and making costs competitive 
so they can have the benefit of lower prices.
  I am very pleased to talk about the tripartisan proposal. I regret we 
have not had the opportunity in the Senate Finance Committee to be able 
to consider competing proposals, certainly the one that has been 
introduced by the ranking member, Senator Grassley, Senator Breaux, 
Senator Jeffords, and Senator Hatch and myself, along with other 
proposals, that obviously has the support of other members of the 
committee.
  We should do everything we can to have the opportunity to explore, to 
debate, to consider the various proposals. Obviously, that starts 
within the committee process. It is unfortunate at this point as we 
begin to debate the other issues in the underlying bill, which is an 
important piece of legislation, that we are not in a position of being 
able to consider a prescription drug benefit plan. That is not the way 
the process ought to work. If you look at what happened on the tax bill 
last year, no one knew what the vote would be in the committee, let 
alone on the floor, but we had the opportunity to address the issue 
within the Senate Finance Committee. It ultimately passed 14 to 6.
  When it came to the floor, it had 53 votes and ultimately yielded a 
vote of 62 to 38. That is the way the process works. We did not write 
the ending first. The prologue begins in the committee.
  In this case, one of the most significant social domestic issues 
facing this country today, prescription drug benefits, Medicare 
authorization, and we have not been able to have a markup in the 
committee of jurisdiction, the Senate Finance Committee, we are told, 
because it does not have 60 votes. How many bills that are marked up in 
the committee have 60 votes before they hit the floor of the Senate? 
How do we know? How do we know until we begin the process of debating, 
analyzing, considering various issues? That is what this process is all 
about.
  I truly regret we have not had the chance to be able to consider this 
bill in the manner it deserves and in the manner it deserves for the 
seniors of this country who are dealing with the overwhelming burden of 
the high costs of prescriptions. Why are we allowing this to be 
politicized? Why are we allowing this to be a matter of partisanship?
  We have come a long way just on the funding issue alone. I have been 
working on this issue in the Senate Budget Committee with then-Chairman 
Domenici, Senator Wyden, Senator Smith, and others, and we were able to 
develop a reserve fund. We started with $40 billion, which was more 
than then-President Clinton had proposed. We are up to $300 billion, 
and our tripartisan proposal is $370 billion, recognizing that as every 
year passes, the price goes up and up. We have come a long way in even 
understanding that we are going to have to spend more to provide a 
strong benefit to seniors, and we must start now.
  Some people might just want the issue for the next election. Maybe 
that is what it is all about. Maybe some people want to see a headline 
that says: Senate fails to muster the 60 votes; the issue is put off 
for another year. I do not want to see that kind of headline. I do not 
think it is fair to the seniors in this country because I know this 
institution can do better, and that is why we put forward this 
tripartisan proposal because we did not want partisan differences, 
political differences, philosophical differences to impede our ability 
to address this most important issue to the seniors in this country.
  That is why we undertook this effort more than a year ago in our 
tripartisan group to see what we could agree to that would provide a 
most substantial benefit to the seniors in this country. Seniors cannot 
put off their illnesses. We should not be putting off a solution, and 
we crossed the political divide to develop our tripartisan proposal.
  We worked closely with the Congressional Budget Office to ascertain 
the

[[Page 13197]]

precise cost of our proposal so we do not jeopardize the solvency of 
the Medicare Program for future generations. We developed a 
competitive, efficient model to yield the best results for seniors as 
well as for the Government.
  I do not want partisanship to jeopardize our ability to send a bill 
to the President, Madam President. I want to break the logjam here and 
now. Seniors have heard the excuses. How can we do anything less than 
give this our full effort here and now, particularly for the one-third 
of the Medicare beneficiaries who have no coverage whatsoever?
  The Medicare Program is outdated, given the fact that it does not 
include a prescription drug benefit first and foremost, and we need to 
bring Medicare into the 21st century. The best way we can do it is by 
adding a prescription drug benefit.
  It is simply unconscionable in a country of our means and wealth that 
older Americans should ever have to choose between filling their 
cupboards and filling their prescriptions. That is not hyperbole; that 
is not exaggeration; that is the truth. It certainly is the truth in my 
State. People are forced to make those tragic choices, and we have 
within our means right here and now, Madam President, to make the 
difference so seniors are no longer forced to make that terrible 
choice.
  That is why we have offered the plan that we have. That is why I do 
not want to bypass the committee, because I know that is our best 
opportunity to pass a prescription drug benefit when we complete the 
process that begins in the committee.
  We should not have any political motivations or maneuvers to bypass 
the process. I have been told: We cannot consider a bill in the 
committee that does not have 60 votes. Since when has that been a 
precondition for any markup in the committee? Then I am told: We cannot 
have a bill that is not supported by the Democratic leadership. I never 
thought that prevented us from doing our job; that eventually we could 
reach results.
  We are not saying our bill is written in concrete. We are saying this 
is a beginning. It is a basis for action. Henry Ford used to tell his 
Model T customers that they could have any color they wanted for a car 
as long as it was black. It sort of reminds me of the situation we are 
in today: We will consider a prescription drug bill as long as it is 
ours.
  We are saying let's bring out the proposals in the committee, let's 
go through the committee process, and then let's report out a bill to 
the floor. The tripartisan bill has the support of 12 members of the 
committee as we speak--12 members of the 21. We have the support in the 
committee, but let's go through the committee process. Let's do what we 
need to do.
  Refusing to have a markup in the Senate Finance Committee is hiding 
behind false pretenses that we should only act if we have 60 votes.
  Madam President, I want to discuss the tripartisan proposal and what 
it is.
  First and foremost, it is a plan that offers an affordable, 
comprehensive, and available prescription drug benefit to seniors. It 
maximizes the benefits for the low-income seniors, and finally, it is a 
fully funded, permanent part of the Medicare process. There will be no 
sunsets. Providing a sunset in legislation, as has been recommended by 
the other competing plan offered by the Senator from Florida, is really 
providing a false hope to seniors. How can we tell them: Oh, by the 
way, in 7 years your benefit will expire? I think that is doing a 
tremendous disservice to seniors in this country, saying we are only 
willing to give this benefit for 7 years, so you had better not have an 
illness because we are not going to be able to give you a benefit in 7 
years.
  Our plan is fully funded and a permanent part of Medicare. It has 
been scored and estimated for cost by the Congressional Budget Office. 
They have vetted every aspect of our proposal. It is right here in a 
major legislative initiative. It is right here for everybody to review 
and to evaluate.
  The plan is universal. It is offered to every Medicare beneficiary. 
That was a major priority for us, and it was a major priority for the 
seniors in this country in all the discussions we had with seniors and 
AARP. They wanted a universal, at the lowest possible monthly premium, 
and that is exactly what our benefit provides. It is lower than any 
other proposal that has been offered: A monthly premium of $24.
  It will be offered to seniors whether they live in urban areas or 
rural areas. They will have a choice of a minimum of two plans, no 
matter where they live in America. The plan is targeted for seniors 
between 135 percent and 150 percent of the poverty level. That is about 
$18,000 for an elderly couple. They will receive coverage for about $12 
a month at 150 percent of the poverty level. Below 135 percent they 
will pay no premium, no deductible whatsoever.
  The plan is comprehensive. They will have access to every drug, 
whether it is a generic drug or the most advanced innovative therapies. 
It also will provide relief from catastrophic costs from high annual 
prescription drug costs.
  Most of all, the plan will save the seniors real money, anywhere from 
33 percent to 98 percent in out-of-pocket expenses, with the average 
senior saving more than $1,600 every year, as my colleagues can see on 
this chart. The average spending for seniors without any drug benefit 
in 2005 will be $3,059 per year; more than a quarter of Medicare 
beneficiaries spend more than $4,000.
  The average savings under our proposal for seniors above 150 percent 
of the poverty level will be more than 53 percent. For those below 135 
percent, they will save 98 percent--98 percent--in their costs of 
prescription drugs. But no matter, the average savings to seniors will 
be at least one-half, more than $1,600.
  Our plan eliminates the so-called donut for lower income seniors, the 
seniors hardest hit by high drug costs. There are 11.7 million Medicare 
beneficiaries who have incomes below 150 percent of the poverty level, 
and they are exempt from the $3,450 benefit limit. The enrollees 
between 135 percent and 150 percent of the poverty level will have a 
monthly premium based on a sliding scale that ranges from anywhere from 
zero to 24 percent.
  The 10 million Medicare beneficiaries who have incomes below 135 
percent of the poverty level will see, as I said, 98 percent of their 
prescription drug costs covered by this plan with no monthly premium. 
These seniors are exempt from the deductible and will pay an average 
coinsurance of anywhere from $1 to $2 for prescription drugs.
  They also have the protection of catastrophic limits, which will be 
$3,700 under our legislation. That is where the catastrophic benefit 
limit will begin, at $3,700. And they will have full protection against 
all drug costs with no coinsurance.
  All enrollees will have access to discounted prescription drugs after 
reaching the $3,450 benefit limit and before the $3,700 catastrophic 
benefit limit.
  They will all still have access to discounted drugs between the 
$3,450 and the $3,700 catastrophic benefit. In fact, 80 percent--let me 
repeat, 80 percent--of the enrollees will never be affected by the 
benefit limit of $3,450.
  As you can see from this chart, I want to repeat, it has the lowest 
premium of any of the comprehensive proposals that have been 
introduced, at $24. Ninety-nine percent of Medicare beneficiaries, 
according to CBO, will be participating under this program--99 percent. 
Let me repeat, 99 percent.
  The coinsurance paid for the top 50 drugs is $21. I want to compare 
that to the proposal offered by the Senator from Florida, because under 
the nonpreferred drug plan, of the top 50 drugs, we provide a lower 
coinsurance on all but one. And for the top 50 drugs in the preferred 
drug list, we provide a lower coinsurance than the proposal offered by 
Senator Graham of Florida on all but 11 of the 50 drugs on the top 50 
list.
  So we are not only more substantial when it comes to providing the 
coinsurance on all of these preferred and nonpreferred drugs--as you 
see listed on the chart are the preferred drugs. For all but 11 out of 
the 50 drugs, we are lower in our copays than the proposal offered by 
Senator Graham of Florida. And for the nonpreferred drug list, we are 
lower for all but 1 out of the 50 drugs. In other words, for 49 out

[[Page 13198]]

of the 50 we are lower. We provide a lower copay for these prescription 
drugs, not to mention the fact that we provide a lower monthly premium 
of $24 a month for those who are 150 percent above the poverty level. 
For those that are below 135 percent of the poverty level, they pay 
zero. And more importantly, our proposal is not sunsetted.
  CBO estimated, as I said, that 99 percent of seniors will have 
coverage under this proposal--99 percent of seniors. I think it is 
important for everybody to understand that if we are going to offer a 
prescription drug benefit, and if we are serious about making sure it 
is part of the Medicare Program, then, clearly, it is important that we 
make sure that it never expires, that we do not resort to budget 
gimmicks or artificial sunset requirements that provide a false hope to 
seniors.
  Seniors deserve better than a false hope of a drug benefit that 
expires after 7 years with no guarantee of further coverage. I think 
that would be regretable if we decided to take that approach.
  That is why we initiated this effort more than a year ago, to provide 
a benefit that was generous, that would help the low incomes first and 
foremost, that was universal, that was affordable, that did not 
jeopardize the future financial stability of the Medicare Program--
because, obviously, that has to be the foremost concern to all of us as 
well as to seniors--and that we had the maximum benefits possible for 
seniors against high annual drug costs.
  So I hope we will have the opportunity to have an honest, thorough 
debate on a prescription drug benefit that can be included as a 
permanent part of the Medicare Program.
  Seniors are struggling under the burden of high prescription drug 
costs. We cannot allow election year politics to overwhelm any chances, 
any possibilities of getting a Medicare drug benefit through the Senate 
this year. We must allow a full debate to occur on this issue both in 
the committee and on the floor.
  The Finance Committee should be a part of this process. Each of us 
has a stake--individually and collectively--about the kind of process 
we are willing to embrace in the Senate.
  It does make a difference as to whether or not we are going to choose 
to bypass the committees repeatedly and bring up significant 
legislation on the floor without having the benefit of the committee 
process and for those Members who serve on those respective committees 
to be part of that process.
  So each of us has a responsibility to that process, and, most 
critically, when it comes to such an important issue to millions of 
Americans: Those who are struggling under the weight of high 
prescription drug costs and those who can expect to face the same 
problem in the future.
  I think each of us here knows that without a markup in the committee 
we are creating a predetermined train wreck. We are heading for a train 
wreck because we are creating a process designed for failure. It is 
designed for politics. It is not designed for creating a solution to a 
serious problem.
  I think if we continue to resort to these ill-advised procedures and 
political maneuvers and charades, and if we continue to allow this 
political choreographing which sort of superficially addresses the 
issue but does not really because we do not really want to create a 
consensus and a compromise because we want the issue for this year's 
elections, then we have failed and this Senate has abrogated its 
responsibility to do what is right.
  That is what it is all about. It is whether or not we choose to do 
what is right. I think we all know what is right. Those of us in our 
tripartisan group--I am not saying that our proposal, as I said 
earlier, is written in stone. It is not a finite product, but it is a 
serious product. It is one that has evolved for more than a year. It is 
one that has been evaluated by the Congressional Budget Office. And it 
is the only proposal that has been introduced that has bipartisan, 
tripartisan support, and the only one that has been scored by the 
Congressional Budget Office.
  It is the only one that has the lowest monthly premium. And it is the 
one that is not sunsetted. It is a permanent part of Medicare.
  Getting back to this chart, seniors pay less for the top 50 
prescriptions under the tripartisan plan versus the Graham-Kennedy-
Miller proposal. They pay less. So they pay less on their monthly 
premium, and they pay less in their copays for the top 50 
prescriptions, either on the preferred drug list or on the nonpreferred 
drug list.
  Those are the facts.
  I just hope that we will have the opportunity to consider this 
legislation and other competing proposals--such as the one offered by 
the Senator from Florida, Senator Graham--in committee; utilizing the 
committee process to amend, to debate and to vote on a final measure. 
My proposal, as it stands, has the votes in the committee.
  But let us go through the committee process. We would be more than 
happy to evaluate other issues and other amendments of the members of 
the committee.
  I just do not understand why we can't have a markup in the Senate 
Finance Committee. We are here to do our job. That is our 
responsibility. That is why we have the committee process. I want to be 
able to legislate the best solution to the problem. We have come up 
with a proposal. Others have other proposals. But let us have a 
competition of ideas and debate in the committee that allows for the 
best hope for getting a bill through on the floor of the Senate that 
will yield the 60 votes, that will go to conference, and the 
differences worked out with the House.
  As others have said, let us get a bill to the President for his 
signature this year. I don't want another year to go by. That is what I 
have been hearing every year. I have been hearing it every year now. 
Four years ago, they said next year. Next year turns into 2 years, 4 
years, 6 years. How long do we think seniors can wait for this 
prescription drug benefit? How long? How long is it going to take? Why 
is it that we have to have these political machinations? Our group--
Senator Grassley, Senator Breaux, Senator Jeffords, Senator Hatch--has 
worked long and hard for more than a year. Why can't we have a markup 
in the committee on this issue?
  I would like to have a reasonable answer to that question. But I 
don't think I am going to get a reasonable answer. There is nothing to 
justify precluding us from doing our jobs in the committee. There is 
nothing acceptable by what is happening here.
  I am here to legislate. I don't expect everybody to agree with my 
thoughts or my ideas or my proposals. But I do expect that we will 
honor the process by which we have the ability to do our job. 
Otherwise, we have all failed.
  I don't care if it is a day before the election. I don't care. The 
time is now. To be frank with all of you, I think that we should reach 
the limits of our frustration with this process. Why do we continue to 
say it is acceptable? The same machinations existed with the health 
care proposal back in 1994. It is exactly the process it took. It 
bypassed the committee process and came to the floor. Guess what. 
Nothing happened.
  Here we are in the year 2002--2002. We don't have a bill. The same is 
going to happen with prescription drugs. People will say next year: We 
can't do it.
  We are getting paid to do our jobs now--not next year. We were 
elected to do our job now. Senator Grassley has worked long and hard.
  Senator Grassley, the ranking member of the Senate Finance Committee, 
has gone the extra mile to reach out to both sides, to the chairman, to 
other members of the committee, and to others here on the Senate floor 
across the aisle, and as he did in this tripartisan proposal. Senator 
Breaux and Senator Jeffords have also worked with us. We have been 
working together because we know this is the only way we can accomplish 
this most important issue for the seniors of this country.
  I hope we will do the right thing. Let's begin this process in the 
Finance Committee so that we can consider the proposals on the floor 
which will ultimately yield the best results, not only in terms of 
policy but for the seniors of this country.

[[Page 13199]]

  I yield the floor.
  The PRESIDING OFFICER (Mr. Reed of Rhode Island). The Senator from 
Massachusetts.
  Mr. KENNEDY. Mr. President, I intend to speak for a very few moments, 
and then hopefully we will be on the amendment of the Senator from 
North Carolina.
  First of all, I thank my good friend, the Senator from Maine, for her 
very eloquent and passionate speech and statement in favor of the 
strong prescription drug program. It was eloquent, indeed. There were 
parts of it that I agree with very much. There were some parts to which 
I take exception. But I welcome the opportunity to have the kind of 
discussion and debate that she eagerly awaits here in the Senate.
  I agree with her that it is long overdue. I agree with her that the 
time is now. I agree certainly with her that we are going to have to 
find common ground. I hope very much that we can.
  I respect those who have gone forward and supported the tripartisan 
proposal.
  Let me offer a few quick facts. Virtually none of the senior groups 
are supporting the tripartisan program. That doesn't have to be the 
bottom-line test. But they believe it doesn't provide the kind of 
protections that are in the Graham-Miller legislation--I think that 
they believe this for a very good reason. The tripartisan proposal has 
an assets test that will exclude many of the neediest of our senior 
citizens. The assets test says that if you have assets worth more than 
$1,500, or a car worth more than $400, or personal property worth more 
than $4,000, you are not eligible. That would affect a great many of 
the people in my State.
  I think it is also demeaning to seniors to have to go in and try to 
give an assessment of what these personal items really are. I think we 
will have a chance to debate that.
  One of the very important aspects of the Graham bill is that it 
doesn't have that test.
  Second, there has been a good deal of talk about the estimated 
premium of $24. That is just an estimate because this program is turned 
over to the insurance companies. There is virtually no guarantee that 
the premium is going to remain $24. It may be $34 or $44.
  I find that senior citizens in my State want certainty, they want 
predictability, they want to know exactly what that premium is going to 
be now. That is something that we will have to debate.
  Third, as the Congressional Budget Office indicated, it will mean 
that 3.5 million seniors who are covered by their employer will be 
dropped for a less adequate program because there is no reimbursement 
for the employers.
  That is not a finding that I make. It is a finding that the 
Congressional Budget Office makes.
  Finally, I want to make this point. The issue of prescription drugs 
has been before the Finance Committee for 5 years. For 4 of the last 5 
years, the Finance Committee has been under Republican control, and we 
have had Republican leaders on the committee. This is the first chance 
we have had to debate it.
  I listened to the Senator talk about wanting an answer to why we are 
not having a markup. I question why we didn't have one over the last 4 
years. Now, under a Democratic leader, we are going to debate and 
hopefully take action on the floor.
  I don't think people in my State are wondering about the committee 
process and how we are going to give adequate time for the committees 
to work. They want the Senate to act. That is the commitment of our 
leader. That is what they want.
  I look forward to having the opportunity to act.
  As the leader has pointed out, we want to try to deal with some of 
the issues of accessibility and also cost containment. In that cost 
containment debate, we have had strong bipartisan support in our 
committee--now 16 to 5. We had five Republicans who worked very closely 
on this issue.
  We are going to find that there will be substantial savings for 
seniors as a result. We are going to hopefully have the opportunity to 
consider other amendments on this that are going to help deal with the 
problems of the cost of prescription drugs. Then we will have an 
opportunity to debate the other provisions.
  But, as always, the Senator from Maine is eloquent, she is 
passionate, and she is knowledgeable about these issues.
  I am very hopeful that before the end of this debate we will be on 
the same side in terms of supporting a program that will be worthy of 
the people of Maine as well as Massachusetts.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, it is appropriate to address again the 
issue of why this bill should have been vetted--not this bill we are 
hearing about, the big bills that are coming at us, the drug bills for 
drug benefits under Medicare--why they should have been vetted by the 
Finance Committee.
  The Senator from Massachusetts represents that it didn't happen the 
last 5 years. There was no bill reported out of the committee. So why 
should the committee have to take it up this year? Why not just write 
it in the office of the majority leader, which is what has happened 
here? We haven't seen the bill. It is ironic. We have had all the 
representations as to what the Democratic bill is. We haven't even seen 
the bill. It hasn't been scored. It doesn't exist, as far as we know. 
Yet there are people out here puffing its strengths.
  The reason you have to take this to committee is that if you don't 
take it to committee, you guarantee, almost, that you will not pass a 
bill. You are certainly not going to pass a bill that was drafted in 
some back office around here. If the bill does not go through the 
Finance Committee, it requires 60 votes to pass this body. It is 
subject to a point of order under the Budget Act.
  It appears that the reason Senator Grassley, being ranking member on 
the Finance Committee, Senator Breaux, Senator Snowe, being members of 
the Finance Committee, and Senator Hatch is supportive of this bill and 
is a member of the committee--it appears within the Finance Committee 
there is a working majority to pass a bill out, specifically the 
tripartite bill. Senator Jeffords is a member of the committee who is 
on this bill. There is a working majority to pass the bill out of the 
committee right now. If that happens, when the bill comes to the floor, 
it only needs 51 votes to pass and you actually get a drug benefit for 
senior citizens.
  The way this process has been set up by the Democratic leadership is 
to create a hurdle that makes it virtually impossible to get a bill off 
the floor of the Senate. That is the difference. That is why you need 
to go through committee. The difference is that simple.
  If you want to pass a bill, you go through the committee so you only 
need 51 votes to pass it. If you don't want to pass a bill, don't take 
it through the committee, because then you create a hurdle of 60 votes, 
and it makes it virtually impossible to pass the bill.
  This is a process which has been set up to fail, as has been 
mentioned by innumerable speakers. It has been set up to fail. It has 
been set up to create a political issue as we go into the August recess 
before the November elections.
  That is unfortunate. It is cynical. The Senator from Maine has, in 
terms of considerable outrage, expressed her frustration with that type 
of process. She has worked conscientiously with the Senators from Iowa 
and Louisiana, and other Senators in this body, to develop what is a 
consensus piece of legislation which will give seniors who are in dire 
need of it a very significant benefit in the area of drugs, for 
purchasing the drugs they need to live a decent life. It is a bill 
which is fairly expensive. We are talking, I believe, about $400 
billion. That is a lot of money. Maybe it is $350 billion over 10 
years.
  Whatever it is, it is a very expensive bill. We are talking about 
taking a large amount of money from working Americans out of their 
paycheck through taxes and using it to support a seniors drug benefit, 
a very reasonable approach. Because it is such a large amount of money, 
it is outside the budget which we presently have in place. We have a 
$300 billion number

[[Page 13200]]

which we put in place as a Congress last year to try to address the 
drug issue to help seniors. The plan, bipartisanly reached, 
tripartisanly reached, exceeds that number, as does every other plan 
being proposed, except for the Hagel-Ensign plan which is below that 
number.
  All the other plans, with the exception of Hagel-Ensign, are subject 
to a point of order and, thus, subject to 60 votes. And it is extremely 
unlikely, considering the nature of the Senate, that you will get 60 
votes for a final package. There are three different competing packages 
on our side, and there is this phantom package on the other side being 
written in an office, or a cloakroom, or a closet somewhere, and which 
we will see someday.
  In any event, we know it has not been adequately vetted and we know 
the number is very high, over $600 billion minimum, maybe as high as $1 
trillion if it is honestly scored.
  That is why you have to go through committee. The committee has the 
expertise on it. That is important. More importantly than that, the 
committee gives the imprimatur of budgetary action, and if a bill is 
reported out of the committee, it meets the budgetary guidelines; it is 
not subject to a point of order.
  So the misrepresentation that if it didn't happen the last 4 years 
that the committee reported out a bill on this issue, why should the 
committee have to report now, is a bit of a red herring. The issue 
isn't that you didn't do it 4 years ago. The issue is, do you want to 
pass a drug benefit package today or do you want a political issue? If 
you want a political issue, don't run it through the committee, bring 
it out on the floor and guarantee it fails because it can't get 60 
votes. If you want a drug benefit package, put it through committee, 
and the committee comes out with a package, which would probably be the 
package outlined by Senator Snowe, and it gets 51 votes at least. I 
suspect it will get more than 51--in the midfifties, probably.
  Then you have a package with which you can turn to your senior 
citizens and say: This will be a significant benefit to you as you deal 
with the issue of prescription drugs. That is the difference. That is 
why you need committee action on this bill. As long as there is no 
committee action, I suspect you are guaranteeing failure.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, we will move on from here, but the fact 
is, as the Senator stated correctly, if it were less than $300 billion, 
then it would need 51 votes. But the Senator from Maine's proposal is 
$370 billion. So they are going to need 60 votes, too. Do we 
understand? I don't understand what the Senator from New Hampshire was 
talking about. They are going to need 60 votes for their proposal 
because they are going to violate the point of order.
  When we are talking about the fact that the seniors are going to 
spend, over 10 years, $1.8 trillion. With $300 billion you are going to 
do very little to offset the kinds of challenges they are facing.
  Finally, I have listened to our Republican leader, to my good friend 
from New Hampshire about following the committees and how important it 
is to follow the procedures. I am so thankful that we have a leader who 
is bringing this to the floor of the Senate at last. Now we hear this 
is circumventing procedure.
  In May of 2000, Republicans brought S. 2557 to the floor, an energy 
bill sponsored by Senator Lott, without committee approval; that was 
the big energy bill. In March 2000, Republicans brought legislation to 
the floor to eliminate the earnings test for individuals without 
committee approval. I voted for that. I am glad they did it. In June of 
1999, Republicans brought the Social Security lockbox to the floor 
without committee approval. In July 1996, Republicans brought the 
Taxpayer Bill of Rights.
  It seems they were prepared to bring a lot of other things, but they 
didn't bring a prescription drug bill to the floor. This leader has 
said this is the priority and that is why we are having this debate 
today.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. DORGAN. Mr. President, the amendment we are now considering, a 
first- and second-degree amendment, I have offered for myself, Mr. 
Wellstone, Mr. Jeffords, Ms. Stabenow, Ms. Collins, Mr. Levin, Mr. 
Johnson, Mr. Miller, Mr. Durbin, Mr. Feingold, and Ms. Snowe. It is a 
bipartisan amendment. It is a very important amendment--one that 
addresses a part of that which we are here to consider on the floor of 
the Senate on the issue of prescription drugs.
  Let me describe what the problems are. One, we don't have a 
prescription drug benefit in the Medicare Program, and we need to 
change that. We need to add a prescription drug benefit to the Medicare 
Program. Why do we need to do that? Because when Medicare was created, 
many of the lifesaving miracle drugs that exist now that allow senior 
citizens to live a longer and healthier life did not exist. So Medicare 
was basically an opportunity to provide health insurance coverage for 
doctors and hospitals but no prescription drug coverage. That was back 
in the 1960s. Things have changed.
  Were we to write a Medicare Program today, we would clearly include 
prescription drug coverage in that Medicare Program. I mentioned senior 
citizens especially because that is who benefits from the Medicare 
Program. They represent about 12 percent of the population of our 
country, and they consume one-third of all prescription drugs. It is 
not unusual at all to talk to a senior citizen who has a series of 
health issues, as they have reached the later stages of their lives, 
and they have to take 4, 5, 10, and in some cases 12 different 
prescription medicines every day in order to deal with their health 
issues.
  The problem is, when senior citizens reach that time of their lives 
where they have retired and have a lower income, they have less ability 
to be able to afford those prescription drugs. With the cost and 
spending increasing substantially, senior citizens are finding all too 
often that the prescription drugs they need to take are simply out of 
reach.
  Let me describe some of the consequences that result. I talked 
yesterday about the woman who came up to me--and all of us have had 
this experience--she grabbed me by the elbow and said: Senator Dorgan, 
can you help me?
  I said: What is wrong?
  She said: Well, I have very serious health problems and my doctor 
prescribed prescription drugs that I must take, but they are too 
expensive. I don't have the money to be able to afford them.
  Her eyes welled up with tears and her chin began to quiver and she 
began to cry.
  She said: Can you help me, please?
  This happens all across the country every day. Let me just read some 
letters. This is from a North Dakotan who wrote me some while ago, 
about 2 months ago:

       Dear Senator Dorgan: I just returned from a drug store, 
     where I happened to witness a very pathetic situation that 
     brought tears to my eyes. Standing in front of me at the 
     counter was an elderly gentleman about 80 years of age. He 
     handed 2 prescriptions to the pharmacist. He said, ``Before 
     you fill these, can you tell me what the price is?'' The 
     pharmacist checked the price through her computer and told 
     the elderly man, ``The first prescription is $94.76. The next 
     prescription is $49.88. Do you want me to fill them for 
     you?'' The old man looked around and was deep in thought and 
     said, ``No, I guess not. I haven't bought Christmas presents 
     for my wife and grandchildren. I will just put up with the 
     pain.'' Using his cane, he walked away.

  ``God bless America,'' she writes. ``I just thought,'' she said, 
``you and your Senate colleagues who have reservations about the need 
for lower priced prescription drugs ought to understand that this is 
going on in our country.''
  A North Dakotan wrote to me and said:

       I am 86 years old, so I cannot work.

  Her first thought, of course, would be to work.

       I am 86 years old, so I cannot work. I am writing in regard 
     to the medication I take. I

[[Page 13201]]

     get $303 in Social Security every month. I have never worked 
     out of my home. I pay $400 a month for my medication. I have 
     had heart surgery and have osteoporosis of the bones. The 
     medicines are very high priced. We need help. We are using 
     all of our savings. I am 86 years old, so I cannot work.

  Another woman from my State says:

       I am a person with scleroderma, diagnosed at the Mayo 24 
     years ago. While this disease attacks different parts of my 
     body, it's mainly my lungs. I have been on oxygen for 2 years 
     now. A new medication is out named Tracleer. One pill a day 
     is $3,600 a year. I called Medicare to see if there was an 
     insurance I can buy for medications. I was told I could not 
     do that. I am a farm wife, 74 years old, who drove a tractor 
     until 2 years ago when I lost my husband and then my lungs 
     got worse.

  She goes on at some great length.
  I recall a snowy North Dakota day in January, in a small van going to 
Canada with some senior citizens from my State. Among the people who 
traveled to a little one-room drugstore in Emerson, Canada, that snowy 
day was Silvia Miller, a 70-year-old Medicare beneficiary from Fargo, 
ND, with no prescription drug coverage. She has diabetes, heart 
problems, and emphysema. She takes 10 to 12 medications every day. In 
1999, she spent more than $4,900 for her medications. Well, Silvia 
Miller, like a lot of others, struggles to try to make do and deal with 
very serious health problems and tries to catch an increased price 
every year--increased costs of prescription drugs. Of course, she 
cannot catch that. It is moving out of sight.
  Last year, there was a 17- to 18-percent cost increase for 
prescription drugs. The year before that, it was about 16 percent. The 
year behalf that, it was about 17 percent. So year after year after 
year, there are relentless increases in the cost of prescription drugs. 
This trend continues. What can we do about it?
  Well, the point we make with this amendment is this: We support fully 
putting a prescription drug benefit in the Medicare Program. That ought 
to be done. I hope it will be done. But if that is all we do--if we do 
nothing to try to dampen down prices, put some downward pressure on 
prescription drug prices, we will have done nothing but hook up a hose 
to the Federal trough and we will suck it dry.
  The American taxpayer beware. If we don't do something to try to put 
some downward pressure on prescription drug prices, we cannot afford 
putting a prescription drug benefit in the Medicare Program. We must do 
both, in my judgment. Let's put the benefit in the Medicare Program, 
make it optional, make it good, and at the same time let's do some 
things that put downward pressure on prescription drug prices.
  I mentioned that I went to Canada with a group of North Dakota senior 
citizens. More recently, the Alliance For Retired Americans arranged 16 
bus trips to Canada between May and June of this year to highlight the 
enormous price differences that exist for the identical prescription 
drugs between the United States and Canada. Participants in those 16 
trips saved $506,000, or $1,340 per person.
  I think it is important that we talk about policy in theory in the 
U.S. Senate, but let me do something a bit more than that, if I can.
  I ask unanimous consent to show some prescription drug bottles that 
describe the real problem.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. DORGAN. Mr. President, if I might go through a few of these, it 
will be useful for people to understand what senior citizens are 
discovering with respect to pricing.
  This prescription drug is Celebrex, quite a remarkable drug for pain. 
It is sold both in the United States and Canada bottles that are 
essentially identical. The U.S. consumer is charged $2.22 per tablet. 
The Canadian consumer is charged 79 cents per tablet. Same drug, same 
bottle, made by the same company; the difference is the American 
consumer is charged dramatically more for the same prescription drug.
  Mr. President, Paxil is a prescription drug used to treat depression. 
As you can see, these two pill bottles are identical. The cost is $2.22 
per tablet to the U.S. consumer; for the Canadians, for the same drug, 
it is 97 cents. Again, it is $2.22 for the American purchaser and 97 
cents for the Canadian purchaser.
  One might ask, as you go through this--and I have a couple more 
examples--why the difference in pricing? Well, that is a good question. 
We have had hearings on this and it is not that there is a difference 
in the tablets in the bottles.
  This is Zocor. A famous football coach talks about Zocor on 
television every day. He says he takes this prescription drug and 
recommends it to others who need it. Zocor is sold in the United States 
in this bottle. It is $3.33 cents per tablet in the United States, and 
it is $1.12 per tablet in Canada.
  Finally, this is a prescription drug called Prevacid. As one can see, 
this prescription drug, like the others, is marketed in an identical 
bottle in the U.S. and Canada. This is used for ulcers. It has a label 
that is of a slightly different color, but the bottle is identical--
same pill, same bottle, made by the same company. In the United States, 
a purchaser pays $3.58 per tablet; in Canada, it is $1.26 per tablet. I 
have more.
  Mr. WELLSTONE. Will the Senator yield for a question?
  Mr. DORGAN. I will be happy to yield.
  Mr. WELLSTONE. What was the last drug?
  Mr. DORGAN. Prevacid. It is used for ulcers.
  Mr. WELLSTONE. May I add to the Senator's list two drugs? So much of 
this is personal. I am sure he hears from people in North Dakota what I 
hear from people in Minnesota, that this drives them crazy.
  Permax is a drug to manage Parkinson's disease. The same bottle in 
the United States is $398.24, and the Canadian price is $189. I mention 
this because I ran into a teacher a couple months ago in my hometown 
who, when I met him--I have not seen him for a while--I said: How are 
you doing? We shook hands. I know Parkinson's. Both my parents had it. 
I know it in the palm of my hand. I felt the shake. I said: Are you 
taking Sinemet?
  He said: Yes, but there is a better drug.
  I said: Are you taking the other one?
  He said: I cannot afford it.
  This is by way of an example.
  Did the Senator from North Dakota mention tamoxifen? It is a breast 
cancer drug. The United States price, same bottle, is $287; Canadian 
price, $24. I wanted to add two more examples to what my colleague 
mentioned.
  Mr. DORGAN. Tamoxifen is a good example because it is priced at 10 
times the Canadian price for those in this country who need it to deal 
with breast cancer. It is a good example.
  This is a chart that shows other drugs, which I have not listed. It 
shows the substantial changes in prices between the United States and 
Canada.
  Let me make a couple additional points.
  I do not come here suggesting that the pharmaceutical manufacturing 
industry or the manufacturers themselves are bad. I do not suggest they 
are bad companies. In many cases, they do good work. They produce 
lifesaving miracle drugs. I might say, they could from time to time 
give more credit to the American taxpayer for some of that because a 
substantial amount of research also goes on through the National 
Institutes of Health that is federally funded, the benefits of which 
then are used by the pharmaceutical manufacturers.
  It is not my intention to tarnish those manufacturers as somehow 
unworthy companies. It is my point to say that the pricing strategy 
employed by those manufacturers is wrong and it penalizes the American 
consumer.
  They say: We must have this kind of pricing practice and pricing 
strategy by which the American consumer pays the highest prices by far 
because that is the way we get the money to do research and 
development.
  It is interesting that a report I read says they do slightly more 
research and development in Europe than they do in the United States: 
37 percent in Europe; 36 percent in the United States. And still in 
virtually every country in Europe, they charge a much lower price for 
the identical prescription drug they sell in the United States.

[[Page 13202]]

  It is not the case that this is all about research and development. 
The legislation we have introduced, the Prescription Drug Price Parity 
for Americans Act, would allow U.S. consumers to benefit from the 
international price competition for prescription medicines.
  We have changed this approach from the previous legislation that was 
enacted by the Congress because we make this apply only to the country 
of Canada. We would like licensed and registered pharmacists and 
distributors to be able to reimport into this country prescription 
drugs that are approved by the FDA. We are limiting that to Canada 
only. We will allow in this legislation pharmacists and distributors to 
access FDA-approved drugs from Canada and bring them into this country 
and pass the savings along to the American consumer.
  This bill would become effective immediately. We have, as I said, 
passed this legislation before. It has not been implemented by two 
administrations because some have raised the question that this would 
pose risks for the consumer. However, we have included provisions in 
this legislation on page 9 addressing suspension of importation which 
will minimize those risks.
  While I talk about that for a moment, let me describe why I think 
those risks are very minimal. Of course, we now have risks with respect 
to the shipment of prescription drugs across borders. We ship a 
substantial amount of United States manufactured drugs to Canada. In 
fact, the Congressional Research Service has a report quoting an 
information officer from Canada who says that most of the 
pharmaceuticals marketed and distributed in Canada originate from U.S. 
manufacturers.
  The question we should ask, it seems to me, as policymakers, is, Why 
should an American citizen have to go to Canada to get a fair price on 
a prescription drug made in the United States? It is a rhetorical 
question but I suspect one without an answer in this Chamber.
  In any event, a substantial amount of the prescription drugs sold in 
Canada are prescription drugs originating in the United States, and 
there is now a law on the books that says the United States consumer, 
through their pharmacists or through their licensed distributors, may 
not access those drugs even if they are less costly in Canada. In my 
judgment, that makes no sense at all.
  Included in the legislation we have introduced is a provision that 
would allow the Secretary of Health and Human Services to suspend 
reimportation. Let me read the language we are including in the second-
degree amendment:

       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).

  David Kessler, former head of the FDA, had this to say in a letter to 
us:

       The Senate bill which allows only the importation of FDA-
     approved drugs, manufactured in approved FDA facilities, for 
     which the chain of custody has been maintained, addresses my 
     fundamental concerns.

  This is a larger description of his letter:

       Let me address your specific questions. I believe U.S. 
     licensed pharmacists and wholesalers who know how drugs need 
     to be stored and handled and would be importing them under 
     the strict oversight of the FDA are well positioned to safely 
     import quality products rather than having American consumers 
     do this on their own.

  The Congressional Research Service report I referred to a few moments 
ago is a report that I had asked they complete in which they should 
evaluate the chain of custody in Canada so we would understand whether 
there is a chain of custody issue.
  If we manufacture a prescription drug, for example, in the United 
States and send it to end up on the shelf of a drugstore in Winnipeg, 
Canada, is there a chain of custody problem that would allow someone to 
say: You cannot have a pharmacist go to Winnipeg and buy that drug 
because that is inherently unsafe?
  The answer is no, that is just sheer nonsense that there is any kind 
of a problem with that.
  The CRS report says both countries have similar requirements and 
processes for reviewing and approving pharmaceuticals, including 
compliance with good manufacturing practices. We have similar rules for 
requiring labeling. The Canadian Federal Government inspects drug 
manufacturing facilities. Pharmacists and drug wholesalers have to be 
licensed. There is no chain of custody question.
  I understand one thing about this. If I were a pharmaceutical 
manufacturer, I would want to kill this legislation. Why? Because the 
pharmaceutical industry confronts price controls in some other 
countries, and they do not like them. Those price controls allow them 
to charge their costs and add a profit to it, and that is the price 
they are able to exact.
  There are no price controls in this country. So the pharmaceutical 
manufacturers make the point that, if you can reimport prescription 
drugs from somewhere else such as Canada, you are reimporting price 
controls from Canada.
  We have price controls in this country really. It is just that the 
prescription drug manufacturers control the price, and they control the 
price by charging the U.S. consumer the highest prices in the world. 
Medicine after medicine, we find the U.S. consumers paying the highest 
prices in the world.
  Lifesaving prescription drugs save no lives if you cannot afford to 
purchase them. Show me something else in the daily lives of the 
American people, or especially of senior citizens, that they need--that 
they don't have a choice on--that is increasing at 16, 17, 18 percent a 
year. Can anyone come up with anything that relates to those kinds of 
relentless increases? I do not think anyone can.
  I want us to continue an aggressive search for miracle drugs and 
lifesaving medicines. That is why many of us in this Chamber have 
agreed to double the amount of funding at the National Institutes of 
Health. This is the fifth and final year to do that. We have gone from 
$12 billion to $24 billion. That was bipartisan. We did it. I want the 
drug manufacturers as well to also engage in robust research and 
development. I support research and development tax credits for that 
purpose, from which they benefit. But I do not want the pharmaceutical 
manufacturers to say to the American people: We have a scheme by which 
we will impose upon you the highest prices of any group of people in 
the world for our prescription drugs. We will have multitiered price 
policies, and you, American citizens, shall pay the highest. We want 
you to pay 10 times the cost for tamoxifen that our friends in 
Winnipeg, Canada, are charged. We want you to pay substantially higher 
prices for Zocor, Lipitor, Premarin, and Celebrex. It is simply not 
fair.
  The point of this amendment is not to try to force anyone to go to 
Canada to buy prescription drugs. It is to try to force a repricing of 
prescription drugs in this country, for if our registered pharmacists 
and licensed distributors can access an FDA-approved drug in Canada and 
bring it back and pass the savings along, it will certainly force a 
repricing of prescription drugs in this country. That is my goal. That 
is our goal.
  So what we have today is an amendment that will allow the 
reimportation, under very strict circumstances, of FDA approved 
prescription drugs from Canada to the United States only by licensed 
distributors and licensed pharmacists, and that will put downward 
pressure on prescription drug prices.
  What we also have in this Chamber, I think, are those who want to 
kill this because the pharmaceutical industry does not like it. I 
understand that. If I were the pharmaceutical industry, I would not 
like it either. They have the best deal in the world in the United 
States, but it is unfair to American consumers. It is unfair to those 
in this

[[Page 13203]]

country who need prescription drugs, who need lifesaving drugs, who 
need these miracle drugs, and cannot afford them.
  So even while we put a prescription drug benefit in the Medicare 
plan, which I fully support, we must pass the underlying generic 
amendment, which also has the effect of putting downward pressure on 
prices.
  We must pass this amendment, the reimportation amendment, which gives 
very careful consideration to the safety issues that others have 
raised, and we should not fear, and we should not shrink from, the 
pharmaceutical manufacturers' attacks that somehow this is bad public 
policy.
  It is good public policy. They just do not like it. It is good public 
policy for the American consumer, and it is safe for the American 
consumer as well. My hope is that my colleagues will support this 
amendment and I strongly urge them to do so.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, during the fine presentation of the Senator 
from North Dakota, which is standard for the Senator from North Dakota, 
I have been speaking with the managers of the bill. The other side 
would accept his amendment by voice vote. I have not had a chance to 
speak to the Senator from North Dakota, but it is my understanding that 
he does want a recorded vote.
  Mr. DORGAN. That is correct.
  Mr. REID. May I ask the manager of the bill and Senator Cochran, who 
is heavily involved in this, if we could set a time--we would draw 
something up on paper--for a vote on this amendment at 2:30? I do not, 
frankly, know if all the time would be taken up on this amendment. This 
would give the Senator from Mississippi time, if he were so inclined, 
to talk about his amendment. Part of the deal would be that the next 
amendment in order would be the amendment of the Senator from 
Mississippi, which will, of course, occur if this passes, and it 
obviously is going to.
  Mr. GREGG. As long as the position of the Senator from Mississippi is 
protected as being the next amendment offered, I certainly have no 
objection, but it is the call of the Senator from Mississippi.
  Mr. COCHRAN. Mr. President, if the Senator will yield, I am happy to 
recommend that to our side of the aisle. The only Senators I know of 
who want to be heard on this amendment I will offer after the amendment 
of Senator from North Dakota are Senator Breaux and Senator Roberts, 
both of whom have expressed an interest in this amendment. I would like 
the opportunity to see, though, if there are others who want to speak 
and make sure we can accommodate everybody. But I personally do not 
have any objection to a 2:30 vote.
  Mr. REID. I say to my friend from Mississippi, I am sure his 
amendment will take a little bit of time because he has people who want 
to speak on it; the majority and others want to speak on it. We will 
not set a time for dealing with his amendment.
  Mr. COCHRAN. Good.
  Mr. REID. If it gets out of hand, we can always move to table, but I 
am sure the Senator from Mississippi, being one of the most experienced 
legislators we have, understands the rules. We will try to be fair and 
move this along as quickly as possible.
  Mr. COCHRAN. Mr. President, I appreciate the assistance of the 
distinguished Senator from Nevada. We will be glad to try to work with 
him to accommodate that suggestion.
  Mr. REID. What we will do is have the staffs prepare something on 
paper, but generally we all understand what it would be; there would be 
a vote on the Dorgan amendment at 2:30.
  Mr. GREGG. With no intervening action?
  Mr. REID. No intervening action. The person next to be recognized to 
offer an amendment would be the Senator from Mississippi.
  Mr. GREGG. With the time equally divided.
  Mr. WELLSTONE. Mr. President, if I could say to the Senator from 
Nevada, and I will relinquish the floor in a second, one of the things 
we need to do on our side--I know Senator Stabenow wants to speak on 
this. There are other Senators who also want to speak.
  Mr. REID. That is why I set the time. We have until 2:30, and even 
though there is a conference, people can step out of that and speak. So 
we will prepare something, and we should have it in the next few 
minutes.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Before there is any unanimous consent agreement 
propounded, I do want to make sure I state to my colleague from North 
Dakota we have quite a few Senators who have worked on this for some 
time and we want to make sure they do have a chance to come down.
  I thank my colleague from North Dakota and my colleague from 
Michigan, and all the other Senators on both sides of the aisle, who 
support this legislation. I think this has been like about 5 years of 
work, as I think back to when some of us first started this journey.
  One of the things I want to do right away is deal with one of the 
arguments that are made against this legislation. It is an argument by 
the pharmaceutical companies that, look, we have to charge American 
citizens a lot more because we need that money for the research. 
Senator Stabenow was there, Senator Graham was there, as well as 
Senator Miller.
  One of the arguments we hear over and over again from the 
pharmaceutical companies, the drug companies, is they need to make this 
excessive amount of money, they need to have the very high priced drugs 
because this goes to research for the miracle drugs that help everyone.
  When the President was in Minneapolis in my State last week, he 
adopted the pharmaceutical or the drug lobby's position and said that 
the high prices everyone sees are necessary to sustain the research and 
development.
  One of the arguments made against this reimportation bill is, if you 
begin to do that and people start getting discounts and we cannot 
charge as much, we cannot put the money into the research. Families USA 
came out with a report they called ``Profiting From Pain.'' They looked 
at the drug company's recent submissions before the Securities and 
Exchange Commission about their activities in 2001. They looked at the 
nine publicly traded companies that market the top 50 drugs to seniors. 
I will go over their key findings.
  The first finding is these large pharmaceutical companies spent $45.4 
billion on marketing and advertising and administration--this is from 
their own SEC report--and $19 billion for research and development--
2\1/2\ times more for marketing, advertising, and administration as for 
research and development.
  The second finding for profits over the last 10 years, profits last 
year as percentage of revenue, was 18.5 percent, 5.5 times the median 
profit for the Fortune 500 companies.
  The third key finding is these companies lavish huge compensation 
packages and even larger stock options--does this sound familiar to 
anyone--to the top drug executives. Mr. C.A. Heimbold, the former 
chairman at Bristol-Myers, had the following compensation package, not 
including unexercised stock options: Ready? $74.9 million; John R. 
Stafford, chairman of Wyeth, $44.5 million. The five highest paid 
executives received over $183 million last year.
  Looking at the unexercised stock options, Mr. Raymond Gilmartin, 
president and CEO of Merck, $93.3 million; Mr. C.A. Heimbold, $76.1 
million; two Pfizer executives, $60.2 million and $56.5 million.
  I make the plea in the Senate because pharmaceutical companies do not 
want this bill. By the way, I said to my colleague from Michigan, who 
has worked so hard on this, one of the reasons I love this legislation, 
this helps all of our citizens, all our families. Pharmaceutical 
companies and wholesalers can meet every strict FDA safety rule, 
reimport back the prescription drugs and pass on the savings. That is 
what this is about.
  The drug industry should stop scaring citizens in our country, 
seniors and

[[Page 13204]]

others, with the false claim that if there is a discount and people are 
charged a reasonable price, this will prevent research in medicine. I 
thank Families USA for their excellent study. I make the point which 
they made today, in light of the huge industry profits, enormous 
executive compensation and big marketing budgets, these claims that we 
need to rip people off with the obsessive, obscene profits in order to 
do the research, are irresponsible and wrong.
  The next point, by way of context of this amendment, it seems to me 
the drug companies in this country are making Viagra-like profits--you 
get the meaning of what I am saying--on the backs of American 
consumers, on the backs of Minnesota consumers. The thought that these 
companies, acting as a cartel, can make Viagra-like profits based on 
the misery and illness and sickness of people is obscene.
  We are going to do something about it and we are going to make sure 
people in Minnesota and people around the country get a discount and 
they get the same fair price that people in Canada get so people can 
afford these prescriptions that are so important.
  What does our amendment do? It allows for the reimportation of the 
drugs from Canada. Believe me, many citizens from Michigan and 
Minnesota and North Dakota know all too well what the differences are. 
People can save as much as 40 percent, if not more, for their 
prescription drugs. The amendment of Senator Dorgan, myself, Senator 
Stabenow, and others would allow pharmacists, drug wholesalers, and 
individuals to reimport safe and effective FDA-approved prescription 
drugs from Canada. These drugs, developed in the United States, are 
available in Canada for a fraction of the price of what we get charged. 
This would help not only senior citizens but other Minnesotans and 
other Americans as well.
  Some examples to add to what my colleague from North Dakota 
mentioned: Coumadin, blood thinner, same bottle, $20.99 in the United 
States; Canadian price is $6.23. Zocor, a cholesterol drug, is $116.69 
in the United States and $53.51 in Canada--same bottle, same 
prescription. Permax, for Parkinson's disease, which so important to 
people with that neurological disease, is $398.24 in the United States, 
$189 in Canada. Tamoxifen, a breast cancer drug, is $287 in the United 
States, $24.78 in Canada.
  When I am traveling around Minnesota, people are asking me, more than 
anything else, can't we get a discount? Isn't there something to do to 
make the drugs affordable? A lot of Minnesotans ask why we can't have 
the same price as our neighbors to the north. This is the best of free 
trade and fair trade. Let our pharmacists and wholesalers meeting FDA 
guidelines reimport these drugs back and pass on the savings to the 
citizens we represent.
  We have a provision for a suspension. If there is a problem with the 
drug, the Secretary can stop the batch of drugs coming into the United 
States until the investigation is completed.
  Now we made it stronger, saying if there is any risk to public 
health, any kind of risk at all to people in this country who deals 
with public health where we have to worry about a batch of drugs that 
should not be in here, that violates safety standard, then the 
Secretary can stop the importation immediately. It is important to 
protect the health of people. We do that. This language assures that 
bad drugs are not going to reach patients in the United States and the 
Secretary at that point in time can suspend those drugs.
  What we cannot do, and what I want every Senator to be aware of, we 
cannot let the pharmaceutical industry gut this amendment. We cannot 
say that the Secretary of Health and Human Services, be it Democrat or 
Republican, can set out conditions and certify those conditions have to 
be met before we have the reimportation. If that is the case, we will 
allow any Secretary of Health and Human Services in any administration 
to kill this.
  Our citizens are tired of being ripped off. They are tired of the 
pharmaceutical companies running the show. Our people want a discount. 
We move forward with this. If, God forbid, there is any tampering with 
any drugs or any violation of public safety, then the Secretary of 
State can immediately suspend. But we do not want to have any kind of 
provision or any kind of amendment that passes that creates a huge 
loophole that enables the pharmaceutical industry to do all their 
behind the scenes lobbying and kill this legislation so that, in fact, 
the Secretary of Health and Human Services never ends up implementing 
it. That is not what the people in Minnesota are asking. That is not 
what people in the country are asking.
  Mr. REID. Mr. President, will my friend yield?
  Mr. WELLSTONE. Yes.
  Mr. REID. Mr. President, I ask unanimous consent that the time until 
2:30 today be for debate on the pending amendments, with the time 
equally divided and controlled between Senators Dorgan and Gregg or 
their designees; that no intervening amendment be in order prior to the 
disposition of amendment No. 4300; that a vote on or in relation to 
amendment No. 4300 occur at 2:30 this afternoon, without further 
intervening action or debate; provided further, upon disposition of 
that amendment, Senator Cochran be recognized to offer an amendment on 
the issue of drug reimportation.
  The PRESIDING OFFICER (Mrs. Carnahan). Is there objection?
  Without objection, it is so ordered.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Minnesota is recognized.
  Mr. WELLSTONE. Madam President, I will take 1 more minute. Other 
Senators want to speak. Senator Stabenow has been a leader on this 
legislation for a long time and has been coordinating the effort of all 
Democrats.
  Let me just conclude this way: I know Senators do not want to be seen 
as opposing an amendment that would enable all of our seniors and all 
of our citizens to be able to get a reasonable price for prescription 
drugs. My fear is that we will have an amendment out here with fine-
sounding language which will create a huge loophole and will basically 
kill this amendment by giving any Secretary of Health and Human 
Services the ability to stop this legislation before it is ever 
implemented. That is unacceptable. That is unacceptable. We cannot let 
the pharmaceutical industry kill this bill and kill this amendment.
  I believe that people in Minnesota, people in Michigan, and people 
around the country look at this as simple. I have said it before. I 
will conclude it this way. I think this is a test case of whether we 
have a system of democracy for the few or a democracy for the many. If 
it is a democracy for the many, we will support this provision. If is 
democracy for a few of the pharmaceutical companies, the devil is in 
the details. They will be able to create a huge loophole, which will 
mean this will never be implemented and they will be able to kill it.
  I urge all colleagues to support this Dorgan, Wellstone, Stabenow, et 
al, amendment and to resist any amendment to essentially gut this 
amendment and stop this piece of legislation from being implemented.
  I yield the floor.

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