Drug Discount Card Improvement Act of 2004

Mr. President, I rise to join Senator Leahy in sponsoring the Protecting Intellectual Rights Against Theft and Expropriation Act--the ``PIRATE Act''--a measure that will provide the Department of Justice with tools to combat the rampant copyright piracy facilitated by peer-to-peer filesharing software.

Let me underscore at the outset that our bill does not expand the scope of the existing powers of the Department of Justice to prosecute persons who infringe copyrights. Instead, our proposal will assist the Department in exercising existing enforcement powers through a civil enforcement mechanism. After considerable study, we have concluded that this is the most appropriate mechanism.

Peer-to-peer file sharing software has created a dilemma for law- enforcement agencies. Millions of otherwise law-abiding American citizens are using this software to create and redistribute infringing copies of popular music, movies, computer games and software.

Some who copy these works do not fully understand the illegality, or perhaps the serious consequences, of their infringing activities. This group of filesharers should not be the focus of federal law-enforcement efforts. Quite frankly, the distributors of most filesharing software have failed to adequately educate the children and young people who use their software about its legal and illegal uses.

A second group of filesharers consists of those who copy and redistribute copyrighted works even though they do know that doing so violates federal law. In many cases, these are college students or young people who think that they will not get caught. Many of these filesharers are engaging in acts that could now subject them to federal criminal prosecution for copyright piracy.

It is critical that we bring the moral force of the government to bear against those who knowingly violate the federal copyrights enshrined in our Constitution. But many of us remain concerned that using criminal law enforcement remedies to act against these infringers could have an overly-harsh effect, perhaps, for example, putting thousands of otherwise law-abiding teenagers and college students in jail and branding them with the lifelong stigma of a felony criminal conviction.

The bill I join Senator Leahy in sponsoring today will allow the Department of Justice to supplement its existing criminal-enforcement powers through the new civil-enforcement mechanism. As a result, the Department will be able to impose stiff penalties for violating copyrights, but can avoid criminal action when warranted.

In advancing this measure, I must note that I view this civil- enforcement authority as another tool, hopefully a transitional tool at that. In the long run, I believe that we must find better mechanisms to ensure that our most vulnerable citizens--our children--are not being constantly tempted to infringe the copyrights that have made America a world leader in the production of creative works.

Only recently has America faced the specter of widespread copyright- enforcement actions against individual users of copyrighted works. For nearly 200 years, copyright enforcement was rarely directed against the millions of ordinary American citizens who use and enjoy copyrighted works. Instead, creators and distributors of copyrighted content worked together to negotiate the complex licensing agreements and technological protections needed to distribute copyrighted works in ways that accommodated both the expectations of users and the copyrights of artists.

But recently, some unscrupulous corporations may have exploited new technologies and discovered that the narrow scope of civil contributory liability for copyright infringement can be utilized so that ordinary consumers and children become, in effect, ``human shields'' against copyright owners and law enforcement agencies. Unscrupulous corporations could distribute to children and students a ``piracy machine'' designed to tempt them to engage in copyright piracy or pornography distribution.

Unfortuantely, piracy and pornography could then become the cornerstones of a ``business model.'' At first, children and students would be tempted to infringe copyrights or redistribute pornography. Their illicit activities then generate huge advertising revenues for the architects of piracy. Those children and students then become ``human shields'' against enforcement efforts that would disrupt the flow of those revenues. Later, large user-bases and the threat of more piracy would become levers to force American artists to enter licensing agreements in which they pay the architects of piracy to distribute and protect their works on the Internet.

Federal enforcement action is surely warranted if such ``business models''

are driving the increasing ease of piracy on peer-to-peer filesharing networks. Such business models exploit children, cheat artists, and threaten the future development of commerce on the Internet.

Indeed, our government recognizes that its enforcement powers are appropriate when protecting intellectual property and public safety. Recently, in a speech to the United States Chamber of Commerce, Deputy Attorney General James B. Comey, Jr. asserted that the Department of Justice should assist private enforcement of intellectual property rights if any of three criteria are met: (1) the level of piracy becomes particularly egregious; (2) public health and safety are put at risk; or (3) private civil remedies fail to adequately deter illegal conduct.

In the case of peer-to-peer filesharing, all three criteria may be met. The level of piracy on these networks is not merely egregious, it is unprecedented. Public health and safety are also directly threatened by business models that tempt children toward piracy and pornography and then use them as ``human shields'' against law enforcement.

Finally, the recording industry and other affected rights holders have tried--so far largely unsuccessfully--to use civil remedies to halt the operations of those who would profit by turning teenagers and college students into copyright pirates or pornography distributors.

As a result, our creative industries' only remaining option to deter piracy is to bring enough civil enforcement actions against users of filesharing software. Tens of thousands of continuing civil enforcement actions might be needed to generate the necessary deterrence. I doubt that any nongovernmental organization has the resources or moral authority to pursue such a campaign.

If enforcement actions against end-users were really the best or only way to enforce copyrights on the Internet, then civil enforcement authority would be necessary. But there may be other ways to combat this piracy at the root, not at the branch. I thus invite the Department of Justice and other federal law enforcement agencies to work with me, Senator Leahy and other members of the Judiciary Committee to determine how the enforcement powers of the federal government can best be deployed to solve the problems arising from piracy and pornography on peer-to-peer filesharing networks.

I also understand that others may be developing proposals to increase criminal enforcement authority against piracy, and I hope to work with them on such proposals. Today, I stand with Senator Leahy to buttress the enforcement of copyrights by enabling the Department of Justice to proceed with a robust program of civil enforcement.

For the reasons I have just delineated, I urge my colleagues to join us in supporting the Protecting Intellectual Rights Against Theft and Expropriation Act.

Mr. President, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created a temporary drug discount card program. We expect that program to go into effect this summer. Under the new law, it is the only prescription drug assistance seniors will see until 2006. And it isn't much. This program has a lot of problems and I am very skeptical that it will provide meaningful assistance to most beneficiaries.

Today, the administration announced which private companies have been selected to receive beneficiary enrollment fees and provide the cards to beneficiaries. The applicants included

big pharmaceutical companies, pharmaceutical benefit managers, and HMOs. And the list of approved companies is a who's who of the insurance industry.

One of the most glaring problems with the program is that the Medicare legislation fails to ensure that these private companies pass along the discounts they negotiate to beneficiaries. Today, I am introducing legislation to remedy that failure. My bill would require card sponsors to pass at least 90 percent of the discounts along to beneficiaries. It seems like common sense, but, true to form, the Republican Medicare bill allows the private companies to keep the discounts as profits. And the administration's regulations only require that they pass along a ``share'' of the discounts they negotiate. Well, I think that's giving them too much leeway.

The administration is promising seniors discounts in order to convince them to pay private companies a $30 fee. My bill would ensure that these private companies pass the discounts along to those seniors. It's only fair. The sponsors will still have plenty of room for benefitting from participating in the program--they get the $30 enrollment fee and they will be able to retain up to 10 percent of the negotiated price concessions.

Despite all the hoopla, the cards themselves are nothing new. Some low-income beneficiaries will see $600 in assistance on their cards, and that is real help. Unfortunately, the process for gaining access to that money is so cumbersome, I worry that many will not get it. And I have serious doubts about whether the cards will add any other meaningful assistance. The General Accounting Office has found that similar cards now available on the market offer discounts on average of less than 10 percent--that's about what seniors could save by comparison shopping at local pharmacies.

Worse, under the Medicare drug program, seniors will only be able to use one Medicare-endorsed card. Before the program, people could use as many cards as they wanted and compare discounts. And the real kicker is that once seniors pay a fee to participate, they're locked into that card for a year. But the card sponsor isn't locked into anything. It can change everything whenever it wants--even the amount of the discount or whether a discount is offered on a particular drug.

And here's the worst part, this drug card program may already be harming all American drug consumers. As the Wall Street Journal noted just yesterday, recent drug price increases are eroding even the meager savings the administration predicts. What's more, all Americans are already paying higher drug prices. According to the Wall Street Journal, since the Bush administration proposed a Medicare drug card in 2001, the prices of many drugs the elderly use have ``surged.'' For example, the article notes that since that time, the price of Lescol, a cholesterol drug, has increased by more than a third. Similarly, the price for Celebrex, a popular drug for arthritis pain, has risen 23 percent since the administration proposed the cards.

The administration is claiming the discount cards will result in beneficiary savings of between 10 and 25 percent. But the pharmaceutical industry's price hikes negate what little savings the administration optimistically predicts. Unfortunately, the discount cards are just one example of the new law's failure to address drug prices. The Boston University School of Public Health recently found that the new Medicare law could lead to an additional $139 billion in profits for the drug companies. The new law actually prohibits Medicare from using its negotiating power to obtain lower drug prices for seniors. And the reimportation provisions are meaningless. We know from experience that seniors can save much more than 10 to 25 percent by getting their drugs from Canada.

As Families USA points out on its website, the drug cards actually create an incentive for the drug companies to raise their prices: ``Neither the new law nor the regulations specify the `base prices' to which discounts will be applied. Any discount will be meaningless if the base price is undefined--especially if the base price continues to rise very substantially. It would be like a department store marking up prices on products so that it can later offer them `on sale' at tremendous `savings.' ''

The bill I am introducing addresses only one flaw in a program riddled with problems. I feel that it is a critical step. At the very least, we should ensure that if this program does offer some sort of price concession, that Medicare beneficiaries--not private companies like HMOs--are the ones to profit from the results.

I ask unanimous consent that the text of the bill be printed in the Record following my remarks.

Mr. President, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created a temporary drug discount card program. We expect that program to go into effect this summer. Under the new law, it is the only prescription drug assistance seniors will see until 2006. And it isn't much. This program has a lot of problems and I am very skeptical that it will provide meaningful assistance to most beneficiaries.

Today, the administration announced which private companies have been selected to receive beneficiary enrollment fees and provide the cards to beneficiaries. The applicants included

big pharmaceutical companies, pharmaceutical benefit managers, and HMOs. And the list of approved companies is a who's who of the insurance industry.

One of the most glaring problems with the program is that the Medicare legislation fails to ensure that these private companies pass along the discounts they negotiate to beneficiaries. Today, I am introducing legislation to remedy that failure. My bill would require card sponsors to pass at least 90 percent of the discounts along to beneficiaries. It seems like common sense, but, true to form, the Republican Medicare bill allows the private companies to keep the discounts as profits. And the administration's regulations only require that they pass along a ``share'' of the discounts they negotiate. Well, I think that's giving them too much leeway.

The administration is promising seniors discounts in order to convince them to pay private companies a $30 fee. My bill would ensure that these private companies pass the discounts along to those seniors. It's only fair. The sponsors will still have plenty of room for benefitting from participating in the program--they get the $30 enrollment fee and they will be able to retain up to 10 percent of the negotiated price concessions.

Despite all the hoopla, the cards themselves are nothing new. Some low-income beneficiaries will see $600 in assistance on their cards, and that is real help. Unfortunately, the process for gaining access to that money is so cumbersome, I worry that many will not get it. And I have serious doubts about whether the cards will add any other meaningful assistance. The General Accounting Office has found that similar cards now available on the market offer discounts on average of less than 10 percent--that's about what seniors could save by comparison shopping at local pharmacies.

Worse, under the Medicare drug program, seniors will only be able to use one Medicare-endorsed card. Before the program, people could use as many cards as they wanted and compare discounts. And the real kicker is that once seniors pay a fee to participate, they're locked into that card for a year. But the card sponsor isn't locked into anything. It can change everything whenever it wants--even the amount of the discount or whether a discount is offered on a particular drug.

And here's the worst part, this drug card program may already be harming all American drug consumers. As the Wall Street Journal noted just yesterday, recent drug price increases are eroding even the meager savings the administration predicts. What's more, all Americans are already paying higher drug prices. According to the Wall Street Journal, since the Bush administration proposed a Medicare drug card in 2001, the prices of many drugs the elderly use have ``surged.'' For example, the article notes that since that time, the price of Lescol, a cholesterol drug, has increased by more than a third. Similarly, the price for Celebrex, a popular drug for arthritis pain, has risen 23 percent since the administration proposed the cards.

The administration is claiming the discount cards will result in beneficiary savings of between 10 and 25 percent. But the pharmaceutical industry's price hikes negate what little savings the administration optimistically predicts. Unfortunately, the discount cards are just one example of the new law's failure to address drug prices. The Boston University School of Public Health recently found that the new Medicare law could lead to an additional $139 billion in profits for the drug companies. The new law actually prohibits Medicare from using its negotiating power to obtain lower drug prices for seniors. And the reimportation provisions are meaningless. We know from experience that seniors can save much more than 10 to 25 percent by getting their drugs from Canada.

As Families USA points out on its website, the drug cards actually create an incentive for the drug companies to raise their prices: ``Neither the new law nor the regulations specify the `base prices' to which discounts will be applied. Any discount will be meaningless if the base price is undefined--especially if the base price continues to rise very substantially. It would be like a department store marking up prices on products so that it can later offer them `on sale' at tremendous `savings.' ''

The bill I am introducing addresses only one flaw in a program riddled with problems. I feel that it is a critical step. At the very least, we should ensure that if this program does offer some sort of price concession, that Medicare beneficiaries--not private companies like HMOs--are the ones to profit from the results.

I ask unanimous consent that the text of the bill be printed in the Record following my remarks.

Mr. President, I rise today to introduce legislation with my friend and colleague, Senator Carper, which will strengthen the use of science at the Environmental Protection Agency. By improving science at the Agency, we will be improving the framework of our regulatory decisions. It is important that these regulations be effective, not onerous and inefficient. To make government regulations efficient, they must be based on a solid foundation of scientific understanding and data.

In 2000, the Nation Research Council released a report, ``Strengthening Science at the U.S. Environmental Protection Agency: Research Management and Peer Review Practices'' which outlined current practices at the EPA and made recommendations for improving science within the agency. The bill we are introducing today, the ``Environmental Research Enhancement Act,'' builds on the NRC report.

When the Environmental Protection Agency was created in 1970 by President Nixon, its mission was set to protect human health and safeguard the environment. In the 1960s, it had become increasingly clear that ``we needed to know more about the total environment--land, water, and air.'' The EPA was part of President Nixon's reorganizational efforts to effectively ensure the protection, development and enhancement of the total environment.

For the EPA to reach this mission, establishing rules and priorities for clean land, air and water require a fundamental understanding of the science behind the real and potential threats to public health and the environment. Unfortunately, many institutions, citizens and groups believe that science has not always played a significant role in the decision-making process at the EPA.

In NRC's 2002 report, it was concluded that, while the use of sound science is one of the Environmental Protection Agency's goals, the EPA needs to change its current structure to allow science to play a more significant role in decisions made by the Administrator.

The legislation we are introducing today looks to address those shortcomings at the EPA by implementing portions of the report that require congressional authorization.

Under our bill, a new position, Deputy Administrator for Science and Technology will be established at the EPA. This individual will oversee the Office of Research and Development; the Environmental Information Agency; the Science Advisory board; the Science Policy Council; and the scientific and technical activities in the regulatory program at the EPA. This new position is equal in rank to the current Deputy Administrator and would report directly to the Administrator. The new Deputy would be responsible for coordinating scientific research and application between the scientific and regulatory arms of the Agency. This will ensure that sound science is the basis for regulatory decisions. The new Deputy's focus on science could also change how environmental decisions are made.

Assistant Administrator for Research and Development, currently the top science job at the EPA, will be appointed for 6 years versus the current 4 years political appointment. Historically, this position is recognized to be one of the EPA's weakest and most transient administrator positions according to NRC's report, even though in my view, the position addresses some of the Agency's more important topics. By lengthening the term of this Assistant Administrator position and removing it from the realm of politics, I believe there will be more continuity in the scientific work of the Agency across administrations and allow the Assistant Administrator to focus on science conducted at the Agency.

In 1997, we learned the problems that can arise when sound science is not used in making regulatory decisions. Following EPA's ozone and particulate matter regulations there was great uncertainty on the scientific side.

When intitally releasing the Ozone/PM regulations, the EPA greatly over estimated the impacts for both ozone and PM, and they had to publicly change their figures later on. Additionally, they selectively applied some study results while ignoring others in their calculations. For example, the majority of the health benefits for ozone are based on one PM study by a Dr. Moogarkar, even though the Agency ignored the PM results of that study because it contradicted their position on PM.

The legislation that Senator Carper and I are introducing will ensure that science no longer takes a ``back seat'' at the Environmental Protection Agency in terms of policy making. I call on my colleagues to join us in cosponsoring this bill.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, the advent of the digital age promises the efficient distribution of music, films, books, and software on the Internet, and an easily-accessed, unprecedented variety of content online. Unfortunately, to see this promise realized, we must overcome some of the challenges presented by digital content distribution. Today I am pleased that Senator Hatch is joining me in sponsoring the ``Protecting Intellectual Rights Against Theft and Expropriation (PIRATE) Act of 2004,'' which will respond to one such challenge. It will bring the resources and expertise of the United States Attorneys' Offices to bear on wholesale copyright infringers.

The very ease of duplication and distribution that is the hallmark of digital content has meant that piracy of that content is just as easy. The very real--and often realized--threat that creative works will simply be duplicated and distributed freely online has restricted, rather than enhanced, the amount and variety of creative works one can receive over the Internet. Part of combating piracy includes offering a legal alternative to it. Another important part is enforcing the rights of copyright owners. Senator Hatch and I have been working with artists, authors, and software developers to create an environment in which copyright is protected, so that we can all enjoy American creativity, and so that copyright owners can be paid for their work.

For too long, Federal prosecutors have been hindered in their pursuit of pirates, by the fact that they were limited to bringing criminal charges with high burdens of proof. In the world of copyright, a criminal charge is unusually difficult to prove because the defendant must have known that his conduct was illegal and he must have willfully engaged in the conduct anyway. For this reason prosecutors can rarely justify bringing criminal charges, and copyright owners have been left alone to fend for themselves, defending their rights only where they can afford to do so. In a world in which a computer and an Internet connection are all the tools you need to engage in massive piracy, this is an intolerable predicament.

Some steps have already been taken. The Allen-Leahy Amendment to the Foreign Operations Appropriations Bill, on Combating Piracy of U.S. Intellectual Property in Foreign Countries, provided $2.5 million for the Department of State to assist foreign countries in combating piracy of U.S. copyright works. By providing equipment and training to law enforcement officers, it will help those countries that are not members of OECD (Organization for Economic Cooperation & Development) to enforce intellectual property protections.

The PIRATE Act will give the Attorney General civil enforcement authority for copyright infringement. It also calls on the Justice Department to initiate training and pilot programs to ensure that Federal prosecutors across the country are aware of the many difficult technical and strategic problems posed by enforcing copyright law in the digital age.

This new authority does not supplant either the criminal provisions of the Copyright Act, or the remedies available to the copyright owner in a private suit. Rather, it allows the government to bring its resources to bear on this immense problem, and to ensure that more creative works are made available online, that those works are more affordable, and that the people who work to bring them to us are paid for their efforts.

The challenges presented by digital content are multifaceted, and no single response will resolve all of them. We must, and we will, offer a broad array of solutions that taken together will help ensure the protection of intellectual property, encourage the deployment of digital content, and allow technology to develop unimpeded. This bill is just one step in this process. I am working with colleagues, members of the private sector, and officials from the Executive Branch, to craft careful and effective responses to other such challenges in the intellectual property arenas.

I hope that my colleagues support the ``Protecting Intellectual Rights Against Theft and Expropriation (PIRATE) Act of 2004,'' and I ask unanimous consent that the text of this bill be printed in the Record.