A bill to amend the Internal Revenue Code of 1986 to repeal the dollar limitation on contributions to funeral trusts.

Mr. President, I rise today to introduce the Health Savings Accounts Improvement and Expansion Act of 2006. This bill will make it easier for businesses to provide the option of an HSA to their employees and for Americans to elect these plans.

In short, this bill will make it more likely that Americans will have an HSA plan available when they are making their health care choices. This would be a good development for the individual consumer and the for nation's health care system as a whole.

There is one thing on which we can all agree: our current health care system is broken. Health care expenses are far outpacing inflation. These escalating costs are pricing more and more Americans and small businesses out of the health insurance market. Unless we act, our health care costs are on pace to bankrupt the Federal Treasury.

We need to do something.

The American people want us to do something.

Some favor an option that would give the Federal Government more control of the health care system. In my opinion, that doesn't really fix the problem, it only makes the problem worse--leading to higher costs, higher taxes, and decreased quality and availability.

I believe the answer lies in bringing down costs by helping Americans to take control of their health care.

Recognizing that a federally controlled universal system is a nonstarter, the House of Representatives has aggressively pursued the expansion and development of Health Savings Accounts. In particular, Congressmen Eric Cantor and Bill Shuster have taken laudable steps toward making these plans more readily available for American workers.

Congressman Bill Thomas, chairman of the Ways and Means Committee, is demonstrating his and the House's commitment to these plans by holding a hearing tomorrow to discuss the development of health savings accounts.

I am also proud to see that several of our Senate colleagues have introduced legislation that would expand consumer driven health care. Senators Santorum, Allen, DeMint, Ensign, and Coburn have introduced legislation to fuel the growth of health savings accounts.

My bill complements these plans by encouraging employers to offer HSA accounts and by making it easier for workers to use them.

Since Congress established HSAs in 2004, American workers have turned to them as an affordable health care alternative. Already, more than three million people have enrolled in HSAs. Without any changes to the law, it is estimated that by 2008 there will be six million HSA owners with almost $5 billion in assets.

HSAs are popular. And they are popular because they work.

HSAs are a different type of health insurance. They are more like car insurance than traditional health insurance: You pay for the dents and dings yourself, and your insurance only kicks in for major events. This makes sense. Think of how expensive your car insurance would be if every scratch on every bumper had to be paid for by insurance companies with no owner contribution.

Yet critics allege that promoting this type of insurance unfairly burdens older Americans and the chronically ill--those with the most health care needs. I would note that the premise of this argument is off the mark. For many Americans and businesses, the cost of health insurance premiums are rising so astronomically that the choice is not between traditional first-dollar coverage or an HSA plan, but between an HSA plan and no insurance at all.

As the Galen Institute--a research institute that has done excellent work reviewing the development of consumer-driven health care--has shown, HSAs are not only for the young and the healthy, but also for all health consumers along the age and income spectrum. In a survey by eHealthInsurance--an on-line health insurance broker representing more than 140 major health insurance companies--40 percent of HSA-eligible plan

purchasers made less than $50,000. Forty-five percent of purchasers are over age 40 and 19 percent are 50 or older.

Some argue that the healthy will migrate from traditional plans, leaving only the chronically ill in full coverage plans and driving up costs by shrinking the insurance pool. This argument ignores a critical fact. Younger workers aged 25-34 are currently the largest segment of the uninsured, in large part because insurance coverage is so expensive. They represent 23 percent of the total uninsured population. By bringing them into HSA plans, they will only bring premium costs down further for the chronically ill who establish an HSA.

According to America's health insurance plans, AHIP, 37 percent of those purchasing plans were previously uninsured. Twenty-seven percent of policies sold in the small group market were sold to employers who did not previously offer coverage. According to Assurant Health, the leading health insurer for individuals and small groups, 40 percent of those purchasing HSAs were previously uninsured.

Finally, it seems that American workers, and the chronically ill, are responding to the incentives provided by these consumer-driven plans. McKinsey & Company conducted an extensive survey of these plans. They held focus groups, performed one-on-one interviews, and produced an in- depth study of more than 2,500 Americans regarding their health insurance arrangements. They concluded that these plans have a lot of potential. In fact, some of their conclusions were remarkable. Fifty percent were more likely to ask about costs and three times more likely to choose a less extensive and expensive treatment option. HSA owners are also more likely to visit an urgent care center for treatment rather than a hospital emergency room.

In addition, HSA consumers were more likely to be attentive to their health. Twenty-five percent were more likely to engage in healthy behavior and 30 percent were more likely to get an annual physical. These educated consumers understand that prevention will save them money in the long run. They were more likely to identify treatment options and they were 20 percent more likely to comply with treatment for chronic conditions.

It is no surprise that people are enjoying their HSA plans. According to a survey by eHealthInsurance, premiums for HSA-eligible insurance actually dropped between the introduction of these plans in 2004 and the first half of 2005. Nearly two-thirds of HSA purchasers paid $100 a month or less for their plans. And these plans are comprehensive. Most cover 100 percent of the costs of hospitalization, lab tests, emergency room visits, prescription drugs and doctors' visits after the deductible is met.

The continued expansion of HSAs will have a twofold effect. For those with insurance, the high deductible encourages more responsible, and less wasteful, health care decisions. For those without insurance, the wider availability and lower premiums makes it more affordable for individuals to purchase these plans in the nongroup market and for companies to provide insurance for their employees. The bottom line is that the expansion of these plans will create downward pressure on escalating health care costs.

My proposal aims to make HSAs more attractive to employees, more attractive to employers, and more attractive to older workers. And the bill provides innovative ways for younger workers to contribute seed money to fund an account for their family.

For employees, the primary benefits are increased contribution limits, and the ability to pay their health insurance premiums from the HSA--with pre-tax dollars. Presently, the portion of premiums paid out- of-pocket is paid with after-tax dollars. This feature will make HSAs affordable for more low and moderate income individuals.

For employers, the bill provides incentives to move into low-cost premium arrangements. The health care costs of self-employed individuals and small employers who purchase plans in the non-group market should go down for those who avail themselves of these improved HSAs.

For older Americans, this bill will permit contributions to an HSA as long as they continue to work. Today, more and more Americans are working past the age of 65. This is a trend we should encourage, because the labor force of the future will need more of these experienced workers. Senior citizens contribute a great deal to the workplace and our economy. I know that they are in Utah. Yet I hear from many of our older workers that because they are eligible for Medicare, they are ineligible for HSAs. Expanding contributions to a population that generally has more medical expenses makes sense.

The cornerstone of my bill is a provision that allows HSAs to be funded with tax-free transfers of balances from other health or retirement plans. Participation in certain employer-sponsored health plans makes it impossible for employees to contribute to an HSA. For example, health reimbursement arrangements--HRAs--are plans that allow employers to reimburse substantiated employee medical expenses up to a maximum amount. Under current law, participation in an HRA disqualifies an individual from contributing to an HSA and remaining balances are subject to forfeiture.

I believe that employers that have adopted HRAs would be more likely to offer HSAs if they are allowed a one-time opportunity to transfer individual HRA balances into HSAs. Allowing a one-time conversion opportunity would be very valuable for employees because the balances currently in HRAs would become employee-owned. Not only will this encourage responsible spending on health care, but it will also help to make health insurance more portable, a goal that discourages job lock and creates more freedom and opportunity for American workers.

The bill provides for a tax-free transfer of IRA funds, originally allocated for retirement, to an HSA, with the money reallocated for health care expenses. This will be particularly helpful for those in need of initial seed money to open an HSA and for those who anticipate high medical expenses for which they are currently unable to tap IRA funds without penalty.

My proposal will make it easier for veterans to participate in an HSA. According to Treasury Department guidance, a veteran may not contribute to an HSA if he or she has actually received medical benefits from the VA at any time during the previous 3 months. This bill would allow a veteran who receives VA medical benefits for a service-connected disability to be eligible for an HSA.

I am pleased to tell my colleagues that the changes proposed by the Health Savings Accounts Improvement and Expansion Act of 2006 have been endorsed by a broad cross-section of major health care organizations. I am proud that the National Association of Health Underwriters, the American Benefits Council, the Council of Insurance Agents and Brokers, Assurant Health, the Chamber of Commerce, the National Business Group on Health, the Business Roundtable, and the Financial Services Roundtable have all endorsed my attempt to expand the availability of Health Savings Accounts. These groups know how important HSAs are in giving employees and employers the flexibility to meet their health care needs.

Mr. President, I expect the popularity of HSAs will one day elevate the acronym to the level of IRAs, where no further clarification is required. Today, I ask my colleagues to join me in a bipartisan effort to accelerate that process by enacting this important legislation.

I ask unanimous consent that a section-by-section description of the bill be printed in the Record.

Mr. President, I rise today to introduce a bill that will eliminate the current limit on the amount individuals can place into a trust to provide for funeral expenses. Given the rising costs of funeral expenses, this change would have a positive impact on the lives of older Americans and on their families. In addition, according to the Joint Committee on Taxation, it would have a slight, but positive, impact on the Federal Treasury.

Current law limits a funeral trust to $8,500, but this is generally no longer sufficient to cover a family's funeral expenses. In Utah, the average cost of a full funeral and burial is $12,685. I am sure that in many other States it is even higher. Because of this contribution limit, even those who preplan their own funerals too often leave their heirs with substantial expenses. Even those who attempt to cover the entire expense may not have enough to cover all costs after administrative fees and taxes are deducted.

This proposal would make qualified funeral trusts more effective. The principal reason individuals set up qualified funeral trust plans is to lift a financial burden from their children.

I recall the case of one constituent who wrote to me about this 3 years ago. He was suffering from Parkinson's disease began preplanning his own funeral so these decisions and this burden would be lifted from his children. Because of the ``QFT Cap'' which at the time was $7,800, this Utahn was not able to preplan completely the funeral services he desired. It became necessary to have one of his sons complete this preplanning for him by opening up his own trust that would help to cover all expenses. It seems silly to make families go to these extra steps when they are attempting to make responsible decisions, well in advance of need, for themselves and their families.

For older Americans, the primary benefits of this legislation are the ability to have all the money they have saved in the trust to be applied to final expenses, instead of taxes, and the incentive to increase the amount of their contribution. Sixty percent of prefunded funerals were funded by trusts and elimination of the cap should raise this percentage. For funeral directors, this change would eliminate the burden and expense of issuing information documents to report income earned from the trust.

I think we can all agree that we should make it easier for those who are willing to provide for these necessary expenses in advance. Today, I ask my colleagues to join me in an effort to enact this important measure.

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

Mr. President, I rise today to support older Americans. Seniors today are living longer, healthier lives. We must do what we can to help them be as independent and active as possible.

We have worked together on both sides of the aisle and with aging organizations, including the organizations that make up the Leadership Council on Aging, to introduce S.3570, the Older

Americans Act Amendments of 2006, which I believe is a strong bipartisan bill. I would like to thank Chairman Enzi, Ranking Member Kennedy, and Senator DeWine for their work. I have worked closely with Senator DeWine in the past, and this is the second Older Americans Act that we have reauthorized together. This bill honors and maintains the commitment we made to the nation's seniors through the Older Americans Act.

The Older Americans Act is one of our most important responsibilities. The 1,200 delegates to the December 2005 White House Conference on Aging voted reauthorization of the act this year as their top priority. I am pleased that we were able to produce this bipartisan bill, but we still have work to do before the Older Americans Act is reauthorized.

We need to continue to work on the Community Service Employment Program for Older Americans, in title V. Much of our bill is quite similar to what the House passed last week, but title V is not. Our bill has maintained the strong community service employment aspect of the program, which has been an integral component since the beginning. The House bill has elements that will minimize and chip away at this community service employment element. The Community Service Employment Program for Older Americans helps seniors obtain employment at Meals on Wheels programs, senior centers, local area agencies on aging, public libraries, and many other public organizations that rely heavily on these seniors. Through community service employment, community organizations receive valuable support while participants receive valuable skill training. I am strongly opposed to losing the community service aspect of this program, and I am pleased our bill strengthens it. I expect that we will continue to protect this as we move to work with the House.

There are several principles that I believe must guide reauthorization. First, we must continue and improve the core services of this act to meet the vital needs of America's seniors. Secondly, we must modernize the act to meet the changing needs of America's senior population, including the growing number of seniors over 85, the impending senior boom, and the growing number of seniors in minority groups. Next, we must look for ways to help seniors live more independent and active lives. Finally, we must give national, State, and local programs the resources they need to carry out these vital responsibilities.

I believe the 2006 reauthorization bill strengthens current Older Americans Act programs and offers innovative ideas that will address the needs of our country's aging population. The reauthorization bill strengthens information and referral services that are the backbone of OAA programs, providing seniors and their family members information about supportive services and information needed to prepare for long- term care. Our bill also strengthens elder abuse programs.

The reauthorization bill also improves the core services of the Older Americans Act. Seniors have come to depend on the information and referral services, congregate and home-delivered meals, transportation, home care, and other OAA programs to meet their daily needs. Whether it is pension counseling or the long-term care ombudsman program--these are vital to helping seniors navigate the complex financial and health care systems. Not all seniors have family and friends that can assist them with complicated decisions, like choosing a long-term care insurance plan or a nursing home. These programs put information in terms seniors can understand. These programs are a safety net for many.

I am especially pleased that this bill authorizes programs to encourage community innovation to support and enhance the ability of seniors to age in place. Seniors will be able to remain in their homes and communities, close to family and friends by providing them necessary supporting services such as transportation, social work services, and health programs to help seniors remain independent and in their communities. Grant program will encourage innovation and build on the success of naturally occurring retirement communities, NORC, programs. NORC programs have been developed at the local level and have a proven record of success. We heard from successful programs in Maryland, Ohio, and New York at the Subcommittee on Aging hearing on NORCs last month. I thank them again for their work and leadership. I always say that the best ideas come from the people, and this is one of the best I have seen in a long time.

This bill also improves the National Family Caregiver Support Program. With the reauthorization of OAA in 2000, we worked hard to create the National Family Caregiver Support Program. In 2003, this program provided assistance to nearly 600,000 caregivers. Services include respite care, caregiver counseling and training, information about available resources, and assistance in locating services. These services are invaluable to seniors and their families. We have worked with the aging community to expand these services. Upon the advice of the Alzheimer's Association our bill lowers the age eligibility for the program for individuals with Alzheimer's from 60 to 50, allowing more individuals with Alzheimer's to qualify for services. Our bill also lowers the age of eligible grandparents to 55. This allows the program to target services to those who need it most.

Our bill also seeks to improve emergency preparedness for seniors. During Hurricanes Katrina and Rita, who was left behind? The elderly, the sick, the disabled. We must plan for their needs and use the senior network that exists in our country to make sure that they are not forgotten. Our bill requires States and Area Agencies on Aging to coordinate to develop plans and establish guidelines for addressing the senior population during a disaster/emergency.

I believe that this bipartisan reauthorization bill honors and maintains the commitment Congress made to our Nation's seniors through the Older Americans Act when it was first created in 1965. Reauthorization of this program for America's seniors and their families is one of our most important responsibilities. I look forward to continuing to work to get a bill passed this year. It is an important responsibility that we have to our Nation's seniors.

Mr. President, I rise today with my colleagues on the Health, Education, Labor, and Pensions Committee--Chairman Enzi, Ranking Member Kennedy, and Senator Mikulski--as we join in the introduction of the Older Americans Act Amendments of 2006. Senator Mikulski and I worked to draft and pass the Older Americans Act Amendments of 2000, and I am proud to have worked with her again to improve and update these important programs.

I also thank Senators Enzi and Kennedy for making this reauthorization a priority for the HELP Committee. Over the months we have negotiated this bipartisan bill, I have greatly appreciated their thoughtful and steady work to get the Older Americans Act to this point. They understand well, as I do, that the quick passage of this reauthorization is the No. 1 recommendation that came out of the White House Conference on Aging. As I have mentioned in the hearings I have chaired of the Subcommittee on Retirement Security and Aging, the passage of the Older Americans Act reauthorization is the top priority for the subcommittee. Today's bill introduction is an important step forward in that process.

As you know, older Americans are a vital and rapidly growing segment of our population. Over 36 million people living in the United States are over the age of 65, accounting for about 12 percent of the population. The Census Bureau projects that 45 years from now, people 65 and older will number nearly 90 million in the United States and comprise 21 percent of the population.

The Older Americans Act is an important service provider for these Americans. I strongly believe this reauthorization updates and strengthens the act in many ways. Changes to this bill include plans and means to prepare for changes to the aging demographics. This bill creates a Federal interagency council responsible for ensuring appropriate planning for baby boomer-related needs and population shifts across agencies. Additionally, it will provide for grants and technical assistance for local aging service providers to plan for the baby boomer population.

Our bill will also increase the authorization levels of the National Family Caregiver Support Program by 25 percent over current appropriated levels over the next 5 years. This program is also expanded to allow for those caring for loved ones with Alzheimer's-- between the ages of 50 and 60--to become eligible for support services. Furthermore, it will clarify that this program will serve elderly caregivers who are caring for their adult children with developmental disabilities. Lastly, it clarifies that grandparents caring for adopted grandchildren are covered under this program, and it lowers the age threshold for grandparents to 55 years old. These are important changes to this program and will affect the quality of life for so many individuals who are struggling with the pressures of caring for loved ones.

This bill also encourages the voluntary contributions related to title III services from those individuals with a self-declared income at or above 200 percent of the poverty level and based on actual cost of service. This will help programs such as Meals-on-Wheels to expand their services and enable them to more effectively take contributions from those older Americans willing to pay for services. As the number of seniors increases, we need to modify our programs to ensure their economic sustainability.

Our amendments will also allow the Department of Health and Human Services to award grants related to the improvement of assistive technology for older Americans. The goal of this provision is to enable older Americans to have the necessary technology to monitor their health and help them remain in their homes as they age. We know most Americans want to remain independent and in their homes as they age, and these grants will help them do just that.

This bill also creates a new grant program which provides grants to create innovative models that allow individuals to remain in community- based settings. The need for this grant program was discussed at length in a hearing I held on models for aging in place--specifically naturally occurring retirement communities. As I stated before, Americans want to stay in their communities as they age, and this bill will help them do just that.

Further, this bill creates a new grant program, based on recommendations in the President's fiscal year '07 budget, to provide grants to States to enable consumer-driven choices with respect to long-term care. Grants can be used to encourage the planning for long- term care for older Americans. It will also facilitate access to long- term care choices and opportunities and advice on choices for care.

Our bill also updates the title V Senior Community Service Employment Program, SCSEP, to allow for a mandatory 4-year competitive grant cycle. It provides a sense of the Senate supporting the community service aspect of the program. Additionally, it limits the time on the program for participants to 3 years, with a 20-percent exemption for certain hard-to-serve populations.

This provision balances the need for limiting the time a person spends in this employment program with the recognition that certain populations have special needs.

Of great importance to me, this bill also amends the act to focus attention on the mental health needs of older Americans. These changes will establish grants for mental health screening of older Americans and increased awareness of its effects on the elderly population. Too often the mental health needs of older Americans are overlooked; however, they can be as serious and life-threatening as any other illness. The mental health needs of our seniors must be taken more seriously and dealt with more aggressively. I believe this provision significantly moves us forward in this struggle.

Finally, this bill includes the language of the Elder Justice bill reported unanimously from the HELP Committee in the 108th Congress to create an office of elder abuse prevention in the administration on Aging; create grants to the States and tribes to prevent elder abuse, neglect, and exploitation; and collect data from States and other entities on elder abuse. These are important provisions to improve the safety and protect the well-being of our parents, grandparents, and other elderly loved ones.

Again, I thank Senator Enzi, Senator Kennedy, and Senator Mikulski for their dedication to the needs of older Americans. I look forward to our continuing work together on this bill as we work to bring it to the Senate floor and the President's desk.

Mr. President, I rise today to join Senator DeWine, Senator Kennedy and Senator Mikulski in introducing the Older Americans Act Amendments of 2006.

The Older Americans Act Amendments of 2006 is the primary source for the delivery of social and nutrition services for older individuals. Enacted in 1965, the act's programs include supportive services, congregate and home-delivered nutrition services, community service employment, the long-term care ombudsman program, and services to prevent the abuse, neglect and exploitation of older individuals. The act also provides grants to Native Americans and research, training, and demonstration activities.

The 2000 amendments to the act authorized the National Family Caregiver Support Program; allowed State agencies on aging to impose cost-sharing for certain supportive services for older persons; revised the State funding formulas; and required the Department of Labor to establish performance measures for the community service employment program.

Title I of the Older Americans Act set broad social policy objective to improve the lives of all older Americans. It recognized the need for an adequate income in retirement, and the importance of physical and mental health, employment in community services for older individuals and long-term care services.

Title II established the Administration on Aging, AOA, within the Department of Health and Human Services to be the primary Federal advocate for older individuals and to administer the provisions of the Older Americans Act. It also established the National Eldercare Locator Service to provide nationwide information with regard to resources for older individuals; the National Long-term Care Ombudsman Resource Center; the National Center on Elder Abuse; the National Aging Information Center; and the Pension Counseling and Information Program. The 2006 amendments will establish an Office of Elder Abuse Prevention and Services to develop a long-term plan and national response to elder abuse prevention, detection, treatment, and intervention. Further, the 2006 amendments strengthen the leadership of the Department of Health and Human Services through an interagency coordinating committee to guide policy and program development across the Federal Government with respect to aging and demographic changes.

Title III authorized grants to State and area agencies on aging to act as

advocates on behalf of older individuals. Title III services are targeted to those with the greatest economic and social need, particularly low-income minority persons and older persons residing in rural communities. It funds supportive services, congregate and home- delivered meals, transportation, home care, adult day care, information assistance, and legal assistance. The 2006 amendments will expand the Caregiver Support Program to permit the use of volunteers to enhance services and increase program authorization levels. In addition, the bill contains a new demonstration project that promises to lead to changes in our long-term care delivery system, leading to consumer driven choices.

Title IV authorized grants for training, research, and demonstration projects in the field of aging. This title supports a wide range of projects including those related to income, health, housing, retirement and long-term care, as well as career preparation and continuing education. The 2006 amendments will expand gerontology training for minority students; multigenerational activities, and civic engagement activities.

Title V authorized the community service employment program for older Americans known as the Senior Community Service Employment or SCSEP--to promote part-time opportunities in community service for unemployed, low-income persons who are 55 years or older and who have poor employment prospects. It is administered by the Department of Labor. The 2006 amendments establish 4-year grant cycles for the competitive program and permit poor performing grantees to be terminated from the program based on performance measures and establishes a 3 year limit for participating in subsidized employment with a 20-percent waiver for difficult to place individuals.

Title VI authorized funds for Supportive and nutrition services for older Native Americans. The 2006 amendments will increase the funding levels for this program.

Title VII authorized the long-term care ombudsman program and elder abuse, neglect and exploitation prevention programs. The 2006 amendments will enhance the elder abuse prevention activities by awarding grants to States and Indian tribes to enable them to strengthen long-term care and provide assistance for elder justice and elder abuse prevention programs. It will create grants for prevention, detection, assessment, treatment of, intervention in, investigation of, and response to elder abuse; safe havens demonstrations for older individuals; volunteer programs; multidisciplinary activities; elder fatality and serious injury review teams; programs for underserved populations; incentives for longterm care facilities to train and retain employees; and other collaborative and innovative approaches. Further, it will initiate a new incidence and prevalence study and a data collection process.

The proportion of the population aged 60 and over will increase dramatically over the next 30 years as more than 78 million baby boomers approach retirement. It is essential that in the coming years Congress and the Federal Government take a leadership role in assisting the states in addressing the needs of older Americans. The bill we offer today will ensure that our Nation's older Americans are healthy, fed, housed, able to get where they need to go and safe from abuse and scams. The No. 1 resolution of the 2005 White House Conference on Aging called upon Congress to reauthorize the Older Americans Act during the 109th Congress. I am pleased that the Senate and the House are well on the way to accomplis1ing this goal on behalf of one of our Nation's greatest resources--our older Americans.

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

Mr. President. I am pleased to introduce, with Senators Kohl, Grassley, and Schumer, the Preserve Access to Affordable Generics Act of 2006, S. 3582. It is no secret that prescription drug prices are rapidly increasing and are a source of considerable concern to many Americans, especially senior citizens and families. In a marketplace free of manipulation, generic drug prices can be as much as 80 percent lower than the comparable brand-name version. Unfortunately, there are still some companies that may be keeping low-cost, life-saving generic drugs off the marketplace, off pharmacy shelves, and out of the hands of consumers by carefully crafted anticompetitive agreements between drug manufacturers. This bipartisan bill will improve the timely and effective introduction of generic pharmaceuticals into the marketplace.

In 2001, and last Congress, I introduced a related bill, the Drug Competition Act. That bill, which is now law, is small in terms of length but large in terms of impact. It ensured that law enforcement agencies could take quick and decisive action against companies seeking to cheat consumers by delaying availability of generic medicines. It gave the Federal Trade Commission and the Justice Department access to information about secret deals between drug companies that keep generic drugs out of the market--a practice that not only hurts American families, particularly senior citizens, by denying them access to low- cost generic drugs but also contributes to rising medical costs.

The Drug Competition Act, which was incorporated in the Medicare Modernization Act, was a bipartisan effort to protect consumers in need of patented medicines who were being forced to pay considerably higher costs because of collusive secret deals. It is regrettable that we must come to the floor again today and take additional action to prevent drug companies from continuing to find and exploit loopholes.

I had faith that we were on the right track. However, two appellate court decisions from 2005 overturned the FTC's longstanding role of ``policing'' these activities and making case-by-case determinations on the appropriateness of proposed settlements, especially those that involved ``reverse'' payments. That refers to payments from a brand- name company to a generic company as opposed to payments from a generic company to the brand-name company for a license to make a particular patented drug.

The FTC rightfully sought U.S. Supreme Court review of the Schering- Plough v. FTC Eleventh Circuit decision. Unfortunately, the Supreme Court refused to hear that case, leaving in doubt the continuing role of the FTC in policing settlements between brand-name drug companies and potential generic competitors. Moreover, in an unprecedented move, the U.S. Solicitor General opposed the request by the FTC for the Supreme Court to hear this case. The inaction of the courts and the choice of the administration to side with large drug companies over seniors and families has provoked us to take action and introduce this important bill.

This matter arises at the intersection of patent law and antitrust law. The drug companies naturally deny that their agreements violate the antitrust laws, presenting them as private preliminary settlements between companies engaged in patent disputes. The problem is that the whole point of the Drug Competition Act is to have an independent body, the FTC, review these deals and to advise the companies if terms or conditions in the deal need to be changed to comply with existing antitrust laws.

Agreements to delay the production and sale of generic medicines in exchange for cash from the brand-name companies need to be carefully reviewed by the FTC under standards that give the FTC authority to act where necessary to enforce antitrust laws. Companies holding patents on medicines should not be permitted to

pay millions of dollars to potential generic competitors for the purpose of delaying the research, development, and sale of competing generic versions of medications when those generic companies believe they have the legal right to sell such products.

I remain hopeful that during the process of working on this bill, a way can be found to give the FTC some discretion, on a case-by case basis, to continue to evaluate these deals. Under this approach, only the deals that are consistent with the intent of that law will be allowed to stand. There will be some deals that involve the payment of money which, on balance, could be good for the companies involved and for consumers. The original intent of the Drug Competition Act was to provide the FTC and DOJ with an opportunity to provide the companies with useful and timely information so the drug companies could conform their deals to the law through confidential advice from the law enforcement agencies. I want that process to be continued.

Senators Grassley, Kohl, Schumer, and I are not the only ones who share the goal of ensuring effective and timely access to generic pharmaceuticals that can lower the cost of prescription drugs for seniors, for families, and for all Americans. I sincerely thank my colleagues on both sides of the aisle who are working together on that goal. We have devoted considerable attention to this matter in recent years, and I look forward to passing this important bill.

In closing, I praise the FTC for spending so much time and energy on protecting competition in the pharmaceutical sector. This represents a massive workload for the FTC on top of all its other important responsibilities to protect consumers and the American enterprise system.

Years ago, the FTC dealt with latter-day robber barons destroying smaller companies; now the FTC has to try to restrain corporate drug giants from robbing the elderly when these seniors buy prescription medicines. I also appreciate the work of the FTC on the authorized generics issue and look forward to the report they are preparing for the Congress on that matter.