Life-Saving Medicines Export Act of 2006

Mr. President, I ask unanimous consent that the text of the five bills on suspending duties be printed in the Record.

Mr. President, I am today introducing a bill which can be the catalyst for saving the lives or improving the health of millions of families in impoverished nations.

In far too many nations, thousands of children die needlessly each month.

The concept of my bill--called the Life-Saving Medicines Export Act of 2006--is easy to summarize.

It allows U.S. companies to make low-cost generic versions of patented medicines for export to impoverished nations that face public health crises but cannot produce those life-saving medicines for themselves.

This bill is based on World Trade Organization agreements permitting nations with pharmaceutical industries to help nations in need.

That WTO agreement was labeled by U.S. Ambassador Portman as ``a landmark achievement that we hope will help developing countries devastated by HIV and AIDS and other public health crises.''

Apart from the pressing need for this step in humanitarian terms, passage of this bill could go a long way in improving U.S. relations with large segments of the world's population.

On December 6, 2005, the Office of the U.S. Trade Representative announced that it ``welcomes'' efforts to ``allow countries to override patent rights when necessary to export life-saving drugs to developing countries that face public health crises but cannot produce drugs for themselves.''

I am concerned, however, that the administration has taken no steps whatsoever to begin to implement that agreement. No implementing legislation has been provided to the Hill. I was informed just today that the administration has ``no present plans'' to propose legislation to implement that international agreement. I am disappointed with that answer but am pleased that the administration expressed a willingness to work with me on this important effort. I will forward my bill to them later today.

Indeed, the World Health Assembly and the World Health Organization have adopted resolutions urging all WTO member nations with a generic capability to adopt laws that implement that agreement.

The World Bank recently issued a guide and model documents on how

best to implement that international agreement. My bill follows their model.

Like a generation ago, infectious and parasitic diseases remain the major killers of children in the developing world. Many of these diseases--measles, malaria, river blindness--we can prevent or cure. But those countries still lack the public health systems and the vital medicines.

Every hour, more than 500 African mothers lose a child, mostly from diseases caused by contaminated water.

In some sub-Saharan countries, HIV infection rates range as high as a third of the adult population, and for this reason 35 percent of African children are at higher risk of death than they were a decade ago.

Despite these grim statistics, there is a brighter side.

We are far more aware today of how much our own health depends on what takes place half a world away. Whether it is AIDS, SARS, West Nile Virus, the Avian Flu, or some as yet unknown infectious disease, we are all at risk, and only an airplane flight away, from wherever the outbreak may occur.

Because of this new awareness, global health is finally recognized as an issue of national security. It may seem obvious today, but even ten years ago it was not.

Health threats that once concerned only medical personnel, now receive the attention of the highest levels of governments. We are supporting policies and programs to help the poorest countries conduct better surveillance and respond more quickly to protect their own people, and to prevent the spread of disease.

There is a great deal more we need to do. Today, 15 percent of the world's people consume 91 percent of the world's pharmaceuticals. The high price of many life-saving medicines--medicines that we take for granted in this country--is beyond reach for billions of the world's most vulnerable populations.

President Franklin Roosevelt said: ``The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have little.''

Imagine if you, or a loved one, were dying and you knew the medicine to cure the disease exists and costs only a few dollars, but you have no way to get it or to pay for it. That is a reality for millions of people today.

Reports by UNICEF, UNAIDS, and Doctors without Borders clearly show that the high price of many life-saving medicines is a significant barrier to their availability in many very low income areas of the world. Indeed, the 4th Global Report of UNAIDS notes the extremely low rate of treatment for HIV/AIDS in those areas by pointing out that of the 5 to 6 million urgently in need of antiretroviral medicines, only some 400,000 were receiving them.

With respect to AIDS, a recent book by Philip Hilts called ``Prescription for Survival'' notes the importance of offering affordable medicines to populations of impoverished nations:

``It was said that the price of the drugs was killing tens of thousands . . .''

Under my bill, U.S. generic manufacturers would be allowed to make generic versions of patented drugs without the consent of the patent holders.

Those patent holders would receive compensation in the form of a royalty payment under a so-called ``compulsory license'' and the generic companies would then be required to sell those less-expensive generic drugs only to least-developed or developing nations.

Use of a compulsory license occurs when Congress determines that there is an important need which should be addressed.

For example, most Americans do not realize that their network television programs received by satellite or by cable are provided under a compulsory license. The program owners receive a royalty for their programs under a formula.

This way American families can watch network TV programming over satellite or cable just like it is made available over-the-air. This same compulsory license approach, except with respect to patented medicines, is employed in this bill.

The WTO agreement contains language designed to protect the interests of the patent holders by focusing its benefits on areas of the world where these important medicines would not otherwise be available except for some of the wealthiest residents.

Thus, implementation of the agreement would not take business away from the companies owning the patents, sometimes referred to as the ``brand-name'' companies, since their medicines are not purchased by low-income families in those impoverished nations.

In addition, the patent holders will receive royalties from the generic companies under the bill. Third, generic versions of products sold under the agreement have to be clearly marked as not for resale to developed nations. This will mean that the bill should not result in undercutting the high-priced sales of those medicines by the brand-name companies in developed nations.

Thus, the bill addresses both the urgent needs of millions of low- income families in impoverished nations while protecting the interests of the patent owners of these life-saving medicines.

There have been significant voluntary efforts made by brand-name pharmaceutical companies, foundations, and non-profits who have donated life-saving medicines and have donated time, personnel and money to help in the fight against deadly diseases in other nations. I commend and greatly appreciate those efforts.

Some funding mechanisms have been started including the Global Fund to Fight AIDS, Tuberculosis and Malaria and President Bush's Millennium Challenge Account. Nonetheless, much remains to be done.

If this bill is enacted it would complement the above efforts and implement the WTO agreements and make low-cost life-saving pharmaceutical products, and other medicines, available to hundreds of thousands of persons without other access to those products.

To provide a little history, I am very pleased that all the member nations of the World Trade Organization, WTO, agreed to this approach to assist people suffering from life-threatening diseases in least- developed or developing nations. Under this international agreement, nations such as the United States with pharmaceutical industries would be allowed to make and sell generic medicines to nations in need even if the patent owners of those medicines refused to authorize such manufacture and sale.

As I said earlier, on December 6, 2005, the United States announced that it ``welcomes'' the WTO amendment to ``allow countries to override patent rights when necessary to export life-saving drugs to developing countries that face public health crises but cannot produce drugs for themselves.'' The amendment will go in effect, for those nations which adopt it, once \2/3\ of the member nations adopt it. The current waiver approach, allowing nations to implement it now, will remain in place until the permanent amendment is adopted. This permits the U.S. to move forward with this effort this year. Indeed, Canada has already passed implementing legislation.

Participation by any nation which wants to export such generic products is voluntary. In order to participate, each country must pass legislation to implement the WTO agreement. The United States needs to act as soon as possible.

This is a moral issue. I am working with a number of religious groups, humanitarian organizations, international assistance groups, and generic drug companies on this effort. I have also received input from some pharmaceutical brand-name companies and hope a few will step forward and be leaders in this effort. I will also reach out across the aisle to try to form a bipartisan coalition.

Two recent World Health Organization annual reports, the World Health Reports for 2003 and 2004, demonstrate the enormous scope of the need for supplying these medicines to needy countries. The ``Life-Saving Medicines Export Act of 2006'' that I am introducing today would allow the U.S. generic industry to respond to these urgent international needs and could save millions of lives in impoverished nations.

Canada, Norway and the Netherlands have already enacted such legislation or rule changes. However, aspects of the Canadian law have been an impediment to the willingness of generic companies to participate. For example,

that law allows Canadian generic companies to provide such medicines for at most only 4 years. The Canadian version permits dilatory and needless litigation, omits important medicines from a complex list of covered drugs, and creates unnecessary bureaucratic hoops.

I have received input from generic companies and my bill addresses all of those concerns. For example, it would provide that a participating generic manufacturer could provide such medicines for up to 14 years which makes it much more likely that U.S. generic companies would make the investments needed to make low-cost medicines for export to impoverished areas.

Under my bill, U.S. generic manufacturers would be allowed to make generic versions of patented drugs without the consent of the patent holders. Those patent holders would receive compensation, a royalty payment, under a so-called ``compulsory license'' and the generic companies would then be required to sell those less-expensive generic drugs only to least-developed or developing nations.

The WTO agreement contains language designed to protect the interests of the patent holders by focusing its provisions on areas of the world where these important medicines would not otherwise be available except for some of the wealthiest residents. Thus, implementation of the agreement would not take business away from the companies owning the patents, sometimes referred to as the ``brand-name patent holders since their medicines are not purchased by low-income families in those impoverished nations. There may be de minimis losses of profits for brand-name patent holders but certainly the humanitarian and self- interest benefits provided by the bill would massively outweigh those concerns.

In addition, the patent holders will receive royalties from the generic companies under the bill. Third, generic versions of products sold under the agreement have to be clearly marked as not for resale to developed nations. This should mean that the bill will not result in undercutting the high-priced sales of the patented medicines in developed nations. Re-exporting of these generic products is prohibited unless it is part of a regional trade alliance among impoverished nations as permitted under the WTO agreements.

Thus, the bill addresses both the urgent needs of millions of low- income families in impoverished nations while protecting the interests of the patent owners of these life-saving medicines and will hopefully help enhance America's image in the world.

For those only interested in self-interest rather than humanitarian aid, note that because of the globalization of travel our Nation is at risk from failure to contain diseases in other nations. America has a strong self-interest in combating diseases in foreign nations. A surprising number of new diseases have emerged in recent years. Some of these new diseases are variations of existing diseases. The volume of people and cargo going to and from distant nations is astounding. According to ``Rx for Survival'' by Philip Hilts, if you count only travel between nations with a heavy burden of disease and those with less disease, more than a million people a week are making the trip.

The more viruses and bacteria mutant inside animals and people, and the more people and goods travel throughout the world, the more residents living in the United States are at risk of being harmed by dangerous diseases.

The National Intelligence Estimate of January 2000, published by the CIA and the National Intelligence Council noted that: ``New and emerging infectious diseases will pose a rising global health threat, and will complicate U.S. and global security over the next 20 years. These diseases will endanger U.S. citizens at home and abroad, threaten United States armed forces deployed overseas and exacerbate social and political instability in key countries and regions.''

I hope all my colleagues will join me in supporting this effort. Here is my section-by-section summary of the bill.

Section 1: Sets forth the name of the Act as the ``Life-Saving Medicines Export Act of 2006.''

Section 2: States that the purpose of the Act is to promote public health under World Trade Organization agreements by permitting the export of generic versions of life-saving patented pharmaceutical products and other medicines including diagnostic tools and vaccines needed to prevent or treat potentially life threatening diseases to residents of impoverished countries with insufficient or no manufacturing capacity to make the medicines. The findings set forth determinations by the World Health Organization concerning the millions of low-income persons without regular access to medicines in lesser- developed or developing nations.

Section 3: This section requires the Director of the United States Patent and Trademark Office to issue a compulsory license (permission to make and sell a patented product under this new Act) to permit generic companies to make and export medicines under the terms of WTO international agreements under several conditions.

The recipient country must be a least-developed nation, as defined by the United Nations, or a developing nation without the ability to manufacture the medicine in question.

The recipient country, called an ``eligible country'' in the bill, must notify the WTO of its interest in participating in this program.

Efforts must have been made by the generic company to buy the right to make and sell the medicine under normal business arrangements with the patent holders.

The medical product exported under this Act must be for life- threatening public health problems and can only be used in least- developed or developing nations, and is not for re-export except in identified circumstances relating to regional trade alliances.

Special labeling and packaging must be used to make clear that the product is sold under the authority of the WTO agreement only for use as allowed under agreement and this bill.

The permission to make and sell the product, the license, can not exceed 7 years, except that the license may be extended once.

The holder of the compulsory license shall pay a royalty to the patent holder, as determined by the Director of the PTO within a limited range of possible rates set forth in the bill, taking into account such factors as humanitarian needs, the economic value to the importing nation, and the need for low-cost pharmaceutical products by persons in the importing nation.

The maximum royalty for any shipment shall not exceed 4 percent times the commercial value of the pharmaceutical products to be exported under this Act under that supply agreement.

An alternative royalty payment approach, modeled after the approach enacted into law by Canada, would also be permitted with the same 4 percent maximum. In addition, the Director may accept combined applications from multiple eligible countries. Note that in emergency situations the Director may waive provisions of the bill in a manner consistent with the WTO agreements.

Section 4: This section makes clear that compulsory licenses issued under this Act shall not be considered an infringement of a patent.

Section 5: This section creates a diverse advisory board of academic, patent, trade, medical, international aid, and industry experts to advise the Director, and to report to the Congress, on ways to improve implementation of the bill to achieve its purposes. Mandatory funding for the board is provided out of the general fund of the U.S. at $1.5 million in fiscal years 2007 and 2008, with modestly declining amounts provided in subsequent years through 2011.

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

Mr. President, I am today introducing a bill which can be the catalyst for saving the lives or improving the health of millions of families in impoverished nations.

In far too many nations, thousands of children die needlessly each month.

The concept of my bill--called the Life-Saving Medicines Export Act of 2006--is easy to summarize.

It allows U.S. companies to make low-cost generic versions of patented medicines for export to impoverished nations that face public health crises but cannot produce those life-saving medicines for themselves.

This bill is based on World Trade Organization agreements permitting nations with pharmaceutical industries to help nations in need.

That WTO agreement was labeled by U.S. Ambassador Portman as ``a landmark achievement that we hope will help developing countries devastated by HIV and AIDS and other public health crises.''

Apart from the pressing need for this step in humanitarian terms, passage of this bill could go a long way in improving U.S. relations with large segments of the world's population.

On December 6, 2005, the Office of the U.S. Trade Representative announced that it ``welcomes'' efforts to ``allow countries to override patent rights when necessary to export life-saving drugs to developing countries that face public health crises but cannot produce drugs for themselves.''

I am concerned, however, that the administration has taken no steps whatsoever to begin to implement that agreement. No implementing legislation has been provided to the Hill. I was informed just today that the administration has ``no present plans'' to propose legislation to implement that international agreement. I am disappointed with that answer but am pleased that the administration expressed a willingness to work with me on this important effort. I will forward my bill to them later today.

Indeed, the World Health Assembly and the World Health Organization have adopted resolutions urging all WTO member nations with a generic capability to adopt laws that implement that agreement.

The World Bank recently issued a guide and model documents on how

best to implement that international agreement. My bill follows their model.

Like a generation ago, infectious and parasitic diseases remain the major killers of children in the developing world. Many of these diseases--measles, malaria, river blindness--we can prevent or cure. But those countries still lack the public health systems and the vital medicines.

Every hour, more than 500 African mothers lose a child, mostly from diseases caused by contaminated water.

In some sub-Saharan countries, HIV infection rates range as high as a third of the adult population, and for this reason 35 percent of African children are at higher risk of death than they were a decade ago.

Despite these grim statistics, there is a brighter side.

We are far more aware today of how much our own health depends on what takes place half a world away. Whether it is AIDS, SARS, West Nile Virus, the Avian Flu, or some as yet unknown infectious disease, we are all at risk, and only an airplane flight away, from wherever the outbreak may occur.

Because of this new awareness, global health is finally recognized as an issue of national security. It may seem obvious today, but even ten years ago it was not.

Health threats that once concerned only medical personnel, now receive the attention of the highest levels of governments. We are supporting policies and programs to help the poorest countries conduct better surveillance and respond more quickly to protect their own people, and to prevent the spread of disease.

There is a great deal more we need to do. Today, 15 percent of the world's people consume 91 percent of the world's pharmaceuticals. The high price of many life-saving medicines--medicines that we take for granted in this country--is beyond reach for billions of the world's most vulnerable populations.

President Franklin Roosevelt said: ``The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have little.''

Imagine if you, or a loved one, were dying and you knew the medicine to cure the disease exists and costs only a few dollars, but you have no way to get it or to pay for it. That is a reality for millions of people today.

Reports by UNICEF, UNAIDS, and Doctors without Borders clearly show that the high price of many life-saving medicines is a significant barrier to their availability in many very low income areas of the world. Indeed, the 4th Global Report of UNAIDS notes the extremely low rate of treatment for HIV/AIDS in those areas by pointing out that of the 5 to 6 million urgently in need of antiretroviral medicines, only some 400,000 were receiving them.

With respect to AIDS, a recent book by Philip Hilts called ``Prescription for Survival'' notes the importance of offering affordable medicines to populations of impoverished nations:

``It was said that the price of the drugs was killing tens of thousands . . .''

Under my bill, U.S. generic manufacturers would be allowed to make generic versions of patented drugs without the consent of the patent holders.

Those patent holders would receive compensation in the form of a royalty payment under a so-called ``compulsory license'' and the generic companies would then be required to sell those less-expensive generic drugs only to least-developed or developing nations.

Use of a compulsory license occurs when Congress determines that there is an important need which should be addressed.

For example, most Americans do not realize that their network television programs received by satellite or by cable are provided under a compulsory license. The program owners receive a royalty for their programs under a formula.

This way American families can watch network TV programming over satellite or cable just like it is made available over-the-air. This same compulsory license approach, except with respect to patented medicines, is employed in this bill.

The WTO agreement contains language designed to protect the interests of the patent holders by focusing its benefits on areas of the world where these important medicines would not otherwise be available except for some of the wealthiest residents.

Thus, implementation of the agreement would not take business away from the companies owning the patents, sometimes referred to as the ``brand-name'' companies, since their medicines are not purchased by low-income families in those impoverished nations.

In addition, the patent holders will receive royalties from the generic companies under the bill. Third, generic versions of products sold under the agreement have to be clearly marked as not for resale to developed nations. This will mean that the bill should not result in undercutting the high-priced sales of those medicines by the brand-name companies in developed nations.

Thus, the bill addresses both the urgent needs of millions of low- income families in impoverished nations while protecting the interests of the patent owners of these life-saving medicines.

There have been significant voluntary efforts made by brand-name pharmaceutical companies, foundations, and non-profits who have donated life-saving medicines and have donated time, personnel and money to help in the fight against deadly diseases in other nations. I commend and greatly appreciate those efforts.

Some funding mechanisms have been started including the Global Fund to Fight AIDS, Tuberculosis and Malaria and President Bush's Millennium Challenge Account. Nonetheless, much remains to be done.

If this bill is enacted it would complement the above efforts and implement the WTO agreements and make low-cost life-saving pharmaceutical products, and other medicines, available to hundreds of thousands of persons without other access to those products.

To provide a little history, I am very pleased that all the member nations of the World Trade Organization, WTO, agreed to this approach to assist people suffering from life-threatening diseases in least- developed or developing nations. Under this international agreement, nations such as the United States with pharmaceutical industries would be allowed to make and sell generic medicines to nations in need even if the patent owners of those medicines refused to authorize such manufacture and sale.

As I said earlier, on December 6, 2005, the United States announced that it ``welcomes'' the WTO amendment to ``allow countries to override patent rights when necessary to export life-saving drugs to developing countries that face public health crises but cannot produce drugs for themselves.'' The amendment will go in effect, for those nations which adopt it, once \2/3\ of the member nations adopt it. The current waiver approach, allowing nations to implement it now, will remain in place until the permanent amendment is adopted. This permits the U.S. to move forward with this effort this year. Indeed, Canada has already passed implementing legislation.

Participation by any nation which wants to export such generic products is voluntary. In order to participate, each country must pass legislation to implement the WTO agreement. The United States needs to act as soon as possible.

This is a moral issue. I am working with a number of religious groups, humanitarian organizations, international assistance groups, and generic drug companies on this effort. I have also received input from some pharmaceutical brand-name companies and hope a few will step forward and be leaders in this effort. I will also reach out across the aisle to try to form a bipartisan coalition.

Two recent World Health Organization annual reports, the World Health Reports for 2003 and 2004, demonstrate the enormous scope of the need for supplying these medicines to needy countries. The ``Life-Saving Medicines Export Act of 2006'' that I am introducing today would allow the U.S. generic industry to respond to these urgent international needs and could save millions of lives in impoverished nations.

Canada, Norway and the Netherlands have already enacted such legislation or rule changes. However, aspects of the Canadian law have been an impediment to the willingness of generic companies to participate. For example,

that law allows Canadian generic companies to provide such medicines for at most only 4 years. The Canadian version permits dilatory and needless litigation, omits important medicines from a complex list of covered drugs, and creates unnecessary bureaucratic hoops.

I have received input from generic companies and my bill addresses all of those concerns. For example, it would provide that a participating generic manufacturer could provide such medicines for up to 14 years which makes it much more likely that U.S. generic companies would make the investments needed to make low-cost medicines for export to impoverished areas.

Under my bill, U.S. generic manufacturers would be allowed to make generic versions of patented drugs without the consent of the patent holders. Those patent holders would receive compensation, a royalty payment, under a so-called ``compulsory license'' and the generic companies would then be required to sell those less-expensive generic drugs only to least-developed or developing nations.

The WTO agreement contains language designed to protect the interests of the patent holders by focusing its provisions on areas of the world where these important medicines would not otherwise be available except for some of the wealthiest residents. Thus, implementation of the agreement would not take business away from the companies owning the patents, sometimes referred to as the ``brand-name patent holders since their medicines are not purchased by low-income families in those impoverished nations. There may be de minimis losses of profits for brand-name patent holders but certainly the humanitarian and self- interest benefits provided by the bill would massively outweigh those concerns.

In addition, the patent holders will receive royalties from the generic companies under the bill. Third, generic versions of products sold under the agreement have to be clearly marked as not for resale to developed nations. This should mean that the bill will not result in undercutting the high-priced sales of the patented medicines in developed nations. Re-exporting of these generic products is prohibited unless it is part of a regional trade alliance among impoverished nations as permitted under the WTO agreements.

Thus, the bill addresses both the urgent needs of millions of low- income families in impoverished nations while protecting the interests of the patent owners of these life-saving medicines and will hopefully help enhance America's image in the world.

For those only interested in self-interest rather than humanitarian aid, note that because of the globalization of travel our Nation is at risk from failure to contain diseases in other nations. America has a strong self-interest in combating diseases in foreign nations. A surprising number of new diseases have emerged in recent years. Some of these new diseases are variations of existing diseases. The volume of people and cargo going to and from distant nations is astounding. According to ``Rx for Survival'' by Philip Hilts, if you count only travel between nations with a heavy burden of disease and those with less disease, more than a million people a week are making the trip.

The more viruses and bacteria mutant inside animals and people, and the more people and goods travel throughout the world, the more residents living in the United States are at risk of being harmed by dangerous diseases.

The National Intelligence Estimate of January 2000, published by the CIA and the National Intelligence Council noted that: ``New and emerging infectious diseases will pose a rising global health threat, and will complicate U.S. and global security over the next 20 years. These diseases will endanger U.S. citizens at home and abroad, threaten United States armed forces deployed overseas and exacerbate social and political instability in key countries and regions.''

I hope all my colleagues will join me in supporting this effort. Here is my section-by-section summary of the bill.

Section 1: Sets forth the name of the Act as the ``Life-Saving Medicines Export Act of 2006.''

Section 2: States that the purpose of the Act is to promote public health under World Trade Organization agreements by permitting the export of generic versions of life-saving patented pharmaceutical products and other medicines including diagnostic tools and vaccines needed to prevent or treat potentially life threatening diseases to residents of impoverished countries with insufficient or no manufacturing capacity to make the medicines. The findings set forth determinations by the World Health Organization concerning the millions of low-income persons without regular access to medicines in lesser- developed or developing nations.

Section 3: This section requires the Director of the United States Patent and Trademark Office to issue a compulsory license (permission to make and sell a patented product under this new Act) to permit generic companies to make and export medicines under the terms of WTO international agreements under several conditions.

The recipient country must be a least-developed nation, as defined by the United Nations, or a developing nation without the ability to manufacture the medicine in question.

The recipient country, called an ``eligible country'' in the bill, must notify the WTO of its interest in participating in this program.

Efforts must have been made by the generic company to buy the right to make and sell the medicine under normal business arrangements with the patent holders.

The medical product exported under this Act must be for life- threatening public health problems and can only be used in least- developed or developing nations, and is not for re-export except in identified circumstances relating to regional trade alliances.

Special labeling and packaging must be used to make clear that the product is sold under the authority of the WTO agreement only for use as allowed under agreement and this bill.

The permission to make and sell the product, the license, can not exceed 7 years, except that the license may be extended once.

The holder of the compulsory license shall pay a royalty to the patent holder, as determined by the Director of the PTO within a limited range of possible rates set forth in the bill, taking into account such factors as humanitarian needs, the economic value to the importing nation, and the need for low-cost pharmaceutical products by persons in the importing nation.

The maximum royalty for any shipment shall not exceed 4 percent times the commercial value of the pharmaceutical products to be exported under this Act under that supply agreement.

An alternative royalty payment approach, modeled after the approach enacted into law by Canada, would also be permitted with the same 4 percent maximum. In addition, the Director may accept combined applications from multiple eligible countries. Note that in emergency situations the Director may waive provisions of the bill in a manner consistent with the WTO agreements.

Section 4: This section makes clear that compulsory licenses issued under this Act shall not be considered an infringement of a patent.

Section 5: This section creates a diverse advisory board of academic, patent, trade, medical, international aid, and industry experts to advise the Director, and to report to the Congress, on ways to improve implementation of the bill to achieve its purposes. Mandatory funding for the board is provided out of the general fund of the U.S. at $1.5 million in fiscal years 2007 and 2008, with modestly declining amounts provided in subsequent years through 2011.

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

Mr. President, every American has the justifiable expectation that the Federal Government will protect their private personal information--information that they are required to provide to a Federal agencies. It is a basic and fundamental responsibility of government to make sure that this sensitive data is handled appropriately, accessed only by authorized personal, and used only for intended purposes.

Earlier this week, the Veterans Administration, VA, announced that computer disks containing as many as 26.5 million veterans' personal information were stolen from an employee who had taken the information home. I, along with many of my colleagues, am outraged at this enormous lapse in security. The Veterans Administration must make sure that veterans are not harmed because of the agency's failure to protect sensitive personal data.

This information includes veterans' social security numbers and dates of birth, the underpinnings of almost all of our financial information. In the wrong hands, this information can be used to steal a person's identity causing substantial harm. All of us have constituents who have been victims of identity theft. When a person's identity is stolen, it can have devastating financial consequences for that person and that family. Even if the financial harm is minimal, it often takes years to clear your name. For our nation's veterans, many of whom are older and disabled, identity theft poses even greater problems.

I understand that the Veterans Administration has launched an internal investigation, but Congress must also conduct a thorough investigation into how this security breach occurred. I want to know why the Veterans Administration waited almost 3 weeks to inform our nation's veterans and Congress of this breach. In my opinion, it is inexcusable that veterans were not notified immediately that their personal information had been stolen and were not given any guidance as to the steps they should take to protect themselves from identity theft. I understand the Veterans Administration Inspector General has cited the agency for poor security policies and procedures. Congress must also begin a comprehensive review of the agency's security protocols and policies and force the agency to adopt stricter security measures to make sure that the personal data our veterans are required to provide the agency is not ever again at risk.

It is for this reason that I am introducing the Veterans' Privacy Protection Act today. Although all Federal agencies need comprehensive data privacy policies, this is a targeted bill to address the security breach at the Veterans Administration on an urgent basis.

Congress has required the Federal Trade Commission to address identity theft and its consequences. The agency has taken an aggressive approach in combating this devastating crime. My bill would require the Federal Trade Commission to develop a hotline explicitly for veterans to provide the information, counseling, and help necessary to allow a veteran to protect himself from the loss of personal data.

At this point, our legislative response must cover all 26.5 million veterans that the Veterans Administration believes may have had their personal information compromised. If further investigations conclusively prove that fewer veterans are at-risk, my bill would target services and support to the affected individuals. To help veterans, my bill would make it easier for them to request a long-term credit alert for their records so credit agencies are aware that their personal information could be being used by others. It is my understanding that a security freeze on an individual's record can have a modest cost, and my bill would have the Veterans Administration cover that cost.

Finally, my bill requires the General Accountability Office to evaluate the Veterans Administration response to this incident and to analyze the agency's security protocols. I believe that an independent investigation could generate a number of recommendations to improve the security of personal information not just in the Veterans Administration but in all Federal agencies.

It is my great hope that a thorough investigation will find the criminals responsible for the theft and determine that they were only after the computer and not the millions of valuable private records of our veterans. If in fact these thieves were after our veterans' data, we will have a major catastrophe on our hands, inexcusably adding more hardship to the lives of those who have so ably served their country.

Mr. President, today the Veterans Administration has failed our Nation's veterans. It is inconceivable to me how any Federal agency could have let this happen. We all have heard the stories during the past year regarding massive breaches of private and confidential data by private entities. The Federal Government acted quickly to respond to these breaches and now it must act just as quickly if not more so to address its own failings. My bill is a critical step in providing the necessary assistance that millions of veterans may require, and I urge my colleagues to act on it with the urgency this situation demands.

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

I thank again my colleagues on the Judiciary Committee and Senator Craig for allowing us to go ahead and introduce this legislation and make brief statements. It is very generous, and we thank him for it.

I am delighted to join my colleague, Senator Dayton, tonight in cosponsoring this legislation. He was kind enough to invite me to do so and even said: Why don't you be the lead sponsor? And I said no, but I will be glad to cosponsor it.

I think this is an important statement here tonight. Honesty is the best insurance policy. It has a good ring to it. It is not going to revolutionize the world, but it could make a real difference. This is a time when once again, in many parts of the country and particularly in my home area, we are very sensitive to the threat of disasters because in only 8 days, on June 1, the next hurricane season will begin, and the National Oceanic and Atmospheric Administration predicts four to six major hurricanes in the upcoming season. So once again people are struggling with situations of having lost their homes or having their homes badly damaged and being told: No, your insurance policy didn't cover your damage. You didn't have flood insurance because, well, you weren't in a flood plain, and oh, by the way, your house was washed away. It wasn't blown away even though we had winds of 140 miles per hour with gusts of 160 or 170 miles an hour, so therefore you didn't have any wind damage. I must say it has been a disappointing shock to me, the insensitivity and the decisions of certain insurance companies and the positions they have taken. Sometimes they will say: Well, wait a minute, we told you in the policy we don't cover this, we don't cover that.

I represent a blue-collar community. Most people work in the paper mills and the shipyards and are fishermen in my area. They have high school educations, but they are not lawyers. They get a house insurance policy and they think: I am covered. Now, go back and take a look at your insurance policies. If you really take a look at it, you will find that this is not covered, that is not covered, this is not covered, and the next thing you know, you haven't got much coverage, but your premium still goes forward. The standard policies, for instance, don't cover earthquakes and floods, and depending on where you live, hurricanes may not even be covered. That is going to be determined in legal actions. Sometimes they say: Well, unless the policy specifically says the hurricane was covered, then it is not covered. Well, that is an ingenious argument, too.

So we have found that there are lots of problems here, and it breaks my heart, what I have seen happen to thousands of my constituents and people in the neighboring States of Louisiana, Texas, and Alabama. They are being told: No, you didn't read the small print in your policy, you are not covered, or because it didn't say you were covered, then you are not covered. That is why I have joined in sponsoring this bill. Surely we should have honesty in everything, including insurance coverage. At least we should find a way to help the people understand.

So this is what this bill does. It is not all that complicated. It would require that insurance companies include a noncoverage disclosure box--a noncoverage disclosure box--restating in the body of the policy, in font twice the current size of the text, all conditions, exclusions, and other limitations of coverage under that policy. In other words, make it clear. Don't hide it in legalese and gobbledegook. Make it title size, make it bold, where people can go and see what they are not getting.

Some people say: Wait a minute, this may be damaging to the companies. No, I think it will help the companies. It will increase consumer confidence. It will avoid disagreements or conflicts about what is covered. You will have a clarification here, and if you have questions, then at least you can clear them up. It would be in their interests.

One other criticism, and that is, what is it going to cost the Federal Government? Answer: Nothing. And very little to the companies. They have these exclusions woven in there, but they are quite often way down in the body of some long policy, incomprehensible to the minds of normal and sane men and women.

So I think this is something which would be good. Frankly, I agree with the Consumer Federation of America. This small requirement could have saved many people pain and suffering and hundreds of millions of dollars, maybe even billions, after Katrina. So I think it is a good idea, and it is one I am glad to cosponsor. I hope that as we continue to look at what we do in the aftermath of recent disasters and how we do a better job compared to future disasters, this can be worked into the body of legislation. So I am delighted to join as a cosponsor. I thank Senator Dayton, and I thank Senator Leahy and Senator Cornyn for allowing us to do this.

Mr. President, I rise to introduce legislation that will restore authority to the Forest Service to retain marina permit revenue for local expenditure.

Within some National Forests, the Forest Service has partnered with local small business owners, allowing them to operate houseboat marinas. In exchange, the Forest Service collects occupancy fees from these marina operators. A portion of these fees had, until recently, been kept in the Forest for local recreation and safety enhancement projects. My legislation allows the Forest Service to once again use these fees in the Forest where they were generated, and where their impact will be most direct.

Several units of the National Forest system will benefit from this legislation, but the unit most affected is the Shasta-Trinity National Forest in California. Under the 1996 Recreation Fee Demonstration Program, the Shasta-Trinity Forest developed a recreation enhancement program at Shasta and Trinity Lakes. Forest Service officials used a portion of the revenue from this program for projects like dock repair, improved handicapped access, safety markers for boaters, law enforcement, and campground construction. Over $4 million was invested in the Forest through this program.

However, the program was inadvertently repealed when the Federal Lands Recreation Enhancement Act was passed. My legislation will correct this oversight by amending the Forest Service's Special Use Permit program, returning this recreation and safety project authority to the agency.

Recreation on Federal lands is important to quality of life in my state and throughout the nation. In many rural areas, it also provides a boost to the economy. I urge my colleagues to support this legislation. It is a simple bill correcting an oversight in the Federal Lands Recreation Enhancement Act. Nonetheless, it has important implications both for recreation enhancement and for the local economies around the affected National Forests.

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

Mr. President, I rise today to introduce the Redwood Valley County Water District Loan Renegotiation Act of 2006.

This legislation seeks to implement prior congressional action taken in 1988 to require the Secretary of the Interior to renegotiate debts owed by the Redwood Valley County Water District to the United States. It is an absolutely essential step if the Redwood County is to obtain a firm and reliable water supply.

In 1983, the Redwood Valley County Water District completed a project to supply water to a rural agricultural community near Ukiah, in Northern California. Two Bureau of Reclamation loans totaling $7.3 million partially financed this project.

Unfortunately, the District was unable to repay these loans. This occurred for several reasons: The initial use projections developed by the District and reviewed by the Bureau were seriously flawed; the District's ability to raise funds was restricted when a moratorium on new hook-ups was imposed; and concerns for endangered species reduced the District's water allotment by 15 percent.

As a result of this situation, in 1998 Congress passed Section 15 of Public Law 100-516 that indefinitely suspended the District's obligations to repay these Bureau loans and ordered the Secretary of Interior to renegotiate the terms of the loans. This loan renegotiation has never taken place and now the District finds its water supply highly uncertain. The Bureau of Reclamation acknowledged in a 2000 report that the District needs a reliable water supply in order to solve its current financial dilemma.

The District has recently identified two potential new projects, either of which could supply a firm and reliable source. No government funds will be sought for these projects, and the District will rely on private financing, a strategy that the Bureau is encouraging. However, before the District can secure private financing for new projects, it must renegotiate the existing loans to provide for their repayment subsequent to repayment of the new loans.

This legislation requires the District to repay the United States the currently suspended loans once the new loans have been repaid. The new water project will provide enough revenue to allow the District to repay both its private loan and the United States government. By providing a workable and reasonable solution to a longstanding problem, the legislation creates a win-win solution for the Bureau of Reclamation and the Redwood Valley County Water District.

I urge my colleagues to support this bill. I ask unanimous consent that the text of the bill be printed in the Record.