A bill to amend the Federal Food, Drug, and Cosmetic Act to prohibit the marketing of authorized generic drugs.

Mr. President, as the ranking member of the Committee on Small Business and Entrepreneurship, I am joined today by my colleagues Senators Snowe, Akaka, and Talent to introduce the Veterans Corporation Reauthorization Act of 2006.

This legislation is the product of lengthy bipartisan discussions about how we might be able to restore and revitalize the mission of The Veterans Corporation. Established in 1999 through Public Law 106-50, The National Veterans Business Development Corporation, commonly known as The Veterans Corporation, TVC, is charged with the task of assisting the men and women who have served this country in the military by helping them create and expand their own businesses. There are over 5 million veteran entrepreneurs across the country--over 550,000 in the Commonwealth of Massachusetts alone--and approximately 200,000 veterans are expected to retire in 2006. Additionally, 2004 data from the Small Business Administration, SBA, shows that approximately 22 percent of veterans in the U.S. household

population purchased or started a new business, or were considering doing so. This legislation ensures that necessary steps are taken to continue fostering entrepreneurship and business ownership among a veterans population that can clearly benefit from such assistance nationwide.

My distinguished colleagues and I feel that TVC is an organization worth reinvigorating. In fiscal year 2005, TVC reached out to over 18,000 current and potential veteran entrepreneurs, and opened three Veteran Business Resource Centers in Boston, MA; Flint, MI; and San Diego, CA, in addition to the flagship location in St. Louis, MO. In my home State of Massachusetts, TVC has close to 100 business owners and over 400 registered members.

Yet, in recent years, TVC has come under criticism for its overall performance. Many within the veterans community, and indeed some of my colleagues in Congress, do not believe TVC has produced results that warrant the millions of dollars in funding the organization has received. I understand this sentiment, and share in the desire to ensure taxpayer dollars are well-spent. This was among my primary concerns as we approached reauthorizing TVC. However, my colleagues and I came to the conclusion that by reauthorizing the organization, Congress could ensure greater oversight and accountability on the part of TVC and its use of Federal dollars--ultimately resulting in better service for our veterans. This is exactly what the Veterans Corporation Reauthorization Act of 2006 aims to do.

This legislation builds on the preexisting TVC program in order to expand its reach nationwide, so that more veterans can have the tools they need to realize their entrepreneurial aspirations. Through a series of provisions that target the weaknesses of TVC and develop sound policies to strengthen them and clarify the organization's mission within the veterans community it serves, this bill makes several key improvements to the corporation.

In its inception, we envisioned that TVC would establish centers across the country to help assist veteran entrepreneurs with their small business needs. Unfortunately, the organization has shifted its primary focus toward the development of online programs in recent years. Although it is a good thing that TVC has four centers across the country, clearly more needs to be done to build upon these and develop a substantial number of new centers and networking opportunities for veterans nationwide. That is why this bill clarifies the role TVC should have in local communities. In rewriting the purpose of TVC in this capacity, our legislation explicitly states that the organization should be actively working to form more centers in order to build and create a national network linking veterans to the information, counseling, and assistance they need in starting and maintaining their businesses.

A recurring frustration that echoes from many veterans nationwide is that they are often unable to gain access to the Federal contracting and procurement realm. It is downright shameful that so many servicemen and women feel as though a government they fought so hard to protect all but abandons them--continuing to award myriad contracts to big businesses. By law, the Federal Government has a 3-percent contracting goal for service-disabled veterans. However, in 2004 only 0.38 percent of government contracts were awarded to service-disabled veterans. Patterns such as this are all too common--replaying themselves year in and year out. Clearly, more ought to be done to help those veterans who are looking to gain access to Federal contracts. Given this, our legislation directs TVC to assist veterans, particularly service- disabled veterans, with Federal contracting opportunities.

We received numerous complaints from veterans about the way the administration has chosen to interpret the current law such that it severely limits Congress's role in appointing board members. In this, TVC had experienced significant staffing changes on its Board of Directors since 1999. Our legislation ensures that the President works with the chair and ranking members of the Senate Committee on Small Business and Entrepreneurship and/or the Senate Committee on Veterans Affairs, and their House counterparts, to appoint nine members of the board with 4-year terms. Additionally, our legislation dictates that in this nomination process, the President and Congress consult with veterans groups nationwide. Furthermore, the Veterans Corporation Reauthorization Act of 2006 stipulates that no more than five of the nine board members be from the same political party and that all have business experience, knowledge of veterans issues, as well as the wherewithal to raise private funds for TVC. I firmly believe that this provision will ensure that TVC has top-notch board members, who can offer the best service to those who have already served our country.

This legislation authorizes $2 million in Federal funds annually from fiscal years 2007 through 2009. Additionally, because TVC was originally to become a self-sustaining entity, our bill requires that for all Federal dollars received, the organization match those dollar amounts with private funds. Since its authorization expired in 2004, TVC's original matching requirement vanished, and the organization instead received Federal funding without any private fundraising requirement. We felt that this matching requirement needed to be reinstated to better enable TVC to become fully self-sustaining. Thus, our legislation forces TVC to function in a way similar to the SBA's Women's Business Centers and Small Business Development Centers. The leveraging of Federal dollars enables TVC to expand its donor base so that it can achieve the goal of self-sustainability. Additionally, it has come to our attention through conversations with the veterans community, that servicemen and women are being charged high fees for using TVC services. That was never the intention when this program was conceptualized, and it is wrong for TVC to earn its private funds on the backs of veterans. We fix that in this bill by limiting the amount of non-Federal funds that TVC can raise in the form of fees to veterans to no more than 33 percent of the organization's total revenue.

In addition to the matching-fund requirement within our bill, it also requires that TVC develop a comprehensive plan for privatization within 6 months of the enactment of the Veterans Corporation Reauthorization Act of 2006. To ensure that TVC is in full compliance with the provisions in our bill, and that its self-sustaining plan demonstrates a certain degree of feasibility, we have asked the Government Accountability Office to conduct an audit of the organization no later than one year after date of enactment.

Finally, this bill extends the SBA's Veterans Advisory Committee, which the administration planned on terminating as of this year. Originally established through Public Law 106-50, this committee was to advise and counsel the SBA Administrator and the agency's Associate Administrator for Veterans' Business Development on the entrepreneurial needs and concerns of veteran small business owners and to monitor public and private plans that have the potential to impact veteran entrepreneurs from obtaining capital, credit, and to access markets. Additionally, it was to roll into TVC by September 30, 2004. However, when this date came around, it was clear that TVC was in no position to take on more responsibilities. Thus, Congress reauthorized the Veterans Advisory Committee and postponed the transfer date until this year. As the deadline closes in, we thought it best to reauthorize Veterans Advisory Committee and again postpone the transfer.

America's veterans and service-disabled veteran communities deserve a resource to assist them in bringing their entrepreneurial ideas into fruition. Nationwide, more and more veterans are turning to small businesses as a means of carving out their piece of the American dream, despite the many barriers they face upon reentering civilian life. The strengthening and revitalization of TVC that this legislation proposes, is one way that Congress can help in this effort and ensure greater effectiveness and accountability within the organization in the years ahead.

I urge my colleagues to join in support of this bipartisan Veterans Corporation Reauthorization Act of 2006--because in helping TVC succeed, we are ultimately helping veterans succeed and prosper.

Mr. President, 33 years ago, this Nation faced a crisis that touched every American. In 1973, in the shadow of a war against Israel, the Arab nations of OPEC decided to embargo shipments of crude oil to the West.

The economic effects were devastating. For American drivers, the price at the gas pump rose from a national average of 38.5 cents per gallon in May 1973 to 55.1 cents per gallon in June 1974. The stock market fell, and countries across the world faced terrible cycles of inflation and recession that lasted well into the 1980s.

Lawmakers in Washington reacted by calling for a nationwide daylight savings time and a national speed limit. They established a new Department of Energy that eventually created a strategic petroleum reserve. Perhaps most important, Congress enacted the Corporate Average Fuel Economy standards, or CAFE, the first-ever requirements for automakers to improve gas mileage on the vehicles we drive.

At the time, auto executives protested, saying there was no way to increase fuel economy without making cars smaller. One company predicted that Americans would all be driving sub-compacts as a result of CAFE. But CAFE did work, and under the direction of Congress, the National Highway Traffic Safety Administration, NHSTA, nearly doubled the average gas mileage of cars from 14 miles per gallon in 1976 to 27.5 mpg for cars in 1985. Today, CAFE standards save us about 3 million barrels of oil per day, making it the most successful energy- saving measure ever adopted.

Now 30 years later, Americans again are feeling the pain at the pump. The price of oil has reached $78 a barrel, and Americans are paying more than $3.00 a gallon for gas. America's 20-million-barrel-a-day habit costs our economy $800 million a day, or $300 billion annually. Because we import 60 percent of our oil, much of it from the Middle East, our dependence on oil is also a national security issue as well. Al-Qaida knows that oil is America's Achilles heel. Osama bin Laden has urged his supporters to ``Focus your operations on oil, especially in Iraq and the gulf area, since this will cause them to die off.''

At a time when the energy and security stakes couldn't be higher, CAFE standards have been stagnant. In fact, because of a long-standing deadlock in Washington, CAFE standards that initially increased so quickly have remained stagnant for the last 20 years.

Since 1985, efforts to raise the CAFE standard have been stymied by opponents who have argued that Congress does not possess the expertise to set specific benchmarks and that an inflexible congressional mandate would result in the production of less safe cars and a loss of American jobs. This has been a bureaucratic logjam that has ignored technological innovations in the auto industry and crippled our ability to increase fuel efficiency.

To attempt to break this two-decade-long deadlock and start the U.S. on the path towards energy independence, I have joined with Senators Lugar, Biden, Smith, Bingaman, Harkin, Coleman, and Durbin to introduce the Fuel Economy Reform Act of 2006. This bill would set a new course by establishing regular, continual, and incremental progress in miles per gallon, targeting 4 percent annually, but preserving NHTSA expertise and flexibility on how to meet those targets.

Over the past 20 years, NHTSA's efforts to improve fuel economy have been encumbered with loopholes and resistance. With this bill, CAFE standards would increase by 4 percent every year unless NHTSA can justify a deviation in that rate by proving that the increase is technologically unachievable, does not materially reduce the safety of automobiles manufactured or sold in the U.S., or can prove it is not cost-effective when comparing with the economic and geopolitical value of a gallon of gasoline saved. We specifically define the grounds upon which NHTSA can determine cost-effectiveness. By flipping the presumption that has served as a barrier to action, we replace the status quo of continued stagnation with steady, measured progress.

Under this system, if the 4 percent annualized improvement occurs over ten years, this bill would save 1.3 million barrels of oil per day--or 20 billion gallons of gasoline per year. If gasoline is just $2.50 per gallon, consumers will save $50 billion at the pump in 2018. By 2018, we would be cutting global warming pollution by 220 million metric tons of carbon dioxide equivalent gases.

The Fuel Economy Reform Act also would provide fairness and flexibility to domestic automakers by establishing different standards for different types of cars. Currently, manufacturers have to meet broad standards over their whole fleet of cars. This disadvantages companies like Ford and General Motors that produce full lines of small and large cars and trucks rather than manufacturers that only sell small cars.

In order to enable domestic manufacturers to develop advanced- technology vehicles, this legislation provides tax incentives to retool parts and assembly plants. This will strengthen the U.S. auto industry by allowing it to compete with foreign hybrid and other fuel efficient vehicles. It is our expectation that NHTSA will use its enhanced authority to bring greater market-based flexibility into CAFE compliance by allowing the banking and trading of credits among all vehicle types and between manufacturers.

Finally, the bill also would expand the tax incentives that encourage consumers to buy advanced technology vehicles. The bill would lift the current 60,000-per-manufacturer cap on buyer tax credits to allow more Americans to buy ultra-efficient vehicles like hybrids.

By ending a 20-year stalemate on CAFE, the Fuel Economy Reform Act will recapture the innovation that Congress and the auto industry launched in response to the OPEC crisis. In the process, we will safeguard our national security, protect our economy, reduce consumer pain at the pump, and protect our climate, environment, and public health. I urge my colleagues to join our bipartisan coalition and support the Fuel Economy Reform Act.

Mr. President, recently I was pleased to introduce with Senators Kohl, Grassley and Schumer, the Preserve Access to Affordable Generics Act of 2006, S. 3582. That bill was designed to improve the timely and effective introduction of generic pharmaceuticals into the marketplace.

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 driven by greed 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.

In 2001, and last Congress, I introduced a related bill, the 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 designed. 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.

The bill I am introducing tonight with Senators Rockefeller and Schumer is very important. It will provide incentives for generic companies to make the investments needed to introduce low-cost generic medicines for all our citizens.

The bill assures all Americans that the original intent of the Hatch- Waxman law is carried out. That law was to provide incentives for generic companies to challenge the validity of patents on medicines and provide incentives for generic companies to manufacture low-cost medicines. That incentive was simple.

Under Hatch-Waxman law, the first generic company, called the first- filer, which successfully develops a generic version of a patented drug and meets certain other requirements, can get a 180-day exclusivity period to be the only generic company to have permission to make and sell that generic drug.

That was called an exclusivity period because that is what the Congress intended--that generic company would have the exclusive right for 180 days to make the generic version of the patented medicine.

The problem is that recently brand-name companies have been labeling their own patented drugs also as a generic version of itself, or licensing others to make it, and selling both the brand-name version and the so-called generic version. This undercuts the potential profits of the ``real'' generic company and denies them what the Hatch-Waxman law promised and for a long time delivered--an exclusivity period lasting up to 180 days.

When the brand-name company offers a competing ``fake'' generic version of the drug, that can cut the profits of the real generic manufacturer greatly--thus making it less likely that a real generic company will even want to make the product.

The Rockefeller bill prevents the brand-name company from doing that for the 180-day exclusivity period. I hope my colleagues will join me in supporting this effort.

Mr. President, recently I was pleased to introduce with Senators Kohl, Grassley and Schumer, the Preserve Access to Affordable Generics Act of 2006, S. 3582. That bill was designed to improve the timely and effective introduction of generic pharmaceuticals into the marketplace.

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 driven by greed 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.

In 2001, and last Congress, I introduced a related bill, the 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 designed. 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.

The bill I am introducing tonight with Senators Rockefeller and Schumer is very important. It will provide incentives for generic companies to make the investments needed to introduce low-cost generic medicines for all our citizens.

The bill assures all Americans that the original intent of the Hatch- Waxman law is carried out. That law was to provide incentives for generic companies to challenge the validity of patents on medicines and provide incentives for generic companies to manufacture low-cost medicines. That incentive was simple.

Under Hatch-Waxman law, the first generic company, called the first- filer, which successfully develops a generic version of a patented drug and meets certain other requirements, can get a 180-day exclusivity period to be the only generic company to have permission to make and sell that generic drug.

That was called an exclusivity period because that is what the Congress intended--that generic company would have the exclusive right for 180 days to make the generic version of the patented medicine.

The problem is that recently brand-name companies have been labeling their own patented drugs also as a generic version of itself, or licensing others to make it, and selling both the brand-name version and the so-called generic version. This undercuts the potential profits of the ``real'' generic company and denies them what the Hatch-Waxman law promised and for a long time delivered--an exclusivity period lasting up to 180 days.

When the brand-name company offers a competing ``fake'' generic version of the drug, that can cut the profits of the real generic manufacturer greatly--thus making it less likely that a real generic company will even want to make the product.

The Rockefeller bill prevents the brand-name company from doing that for the 180-day exclusivity period. I hope my colleagues will join me in supporting this effort.

Mr. President, I rise today with Senators Schumer and Leahy to introduce an important piece of legislation for seniors, individual with disabilities, children, and anyone who is taking a brand name prescription drug with a generic equivalent. The bill we are introducing today would outlaw the latest in a long line of loopholes that brand name manufacturers have found to limit generic drug access to the market.

Our legislation would prohibit brand name manufacturers from introducing so-called ``authorized generics'' during the 180-day period that Congress intended true generics to have exclusive market rights. Some of my colleagues may be wondering what an ``authorized generic'' is.

An authorized generic drug is a brand name prescription drug produced by the same brand manufacturer on the same manufacturing lines, yet repackaged as a generic in order to confuse consumers and shut true generics out of the market. This is a huge problem and one that is becoming even more prevalent as patents on some of the best-selling brand name pharmaceuticals start to expire.

Pravachol, Zocor and Zoloft have patents that have expired or will expire this year. Together, these drugs account for approximately $9 billion in sales annually. In 2007, another top-selling brand name drug, Norvasc, will lose its patent protection, followed by Advair the following year.

When brand name drugs lose patent rights, this opens the door for consumers, employers, third-party payers, and other purchasers to save billions--between 50 and 80 percent on the costs of prescriptions--by using generic versions of these drugs. Brand name drug companies are expected to lose as much as $75 billion over the next 5 years as some of their best sellers go off-patent and generic competition increases. So, not surprisingly, these big pharmaceutical companies are desperately trying to protect their market share and prevent consumers from cashing in on savings from generic drugs.

We have addressed this issue before. In 1984, Congress passed the Hatch-Waxman legislation to provide consumers greater access to lower cost generic drugs. The intent of this law was to improve generic competition, while preserving the ability of brand name manufacturers to discover and market new and innovative products. As part of this law, the first generic company on the market after challenging an expiring brand name patent is granted 180-days of exclusive market rights, which is just a fraction of the up to 20 years of exclusive market rights afforded brand companies.

This 6-month incentive is crucial to maintaining the balance between encouraging brand drug companies to make new drugs and encouraging generic drug companies to make existing drugs more affordable. Challenging a brand name drug's patent takes time, money, and involves absorbing a great deal of risk. Generic drug companies rely on the added revenue provided by the l80-day exclusivity period to recoup their costs, fund new patent challenges where appropriate, and ultimately pass savings onto consumers.

This latest attempt by big drug companies to protect their profits puts billions of dollars in savings for consumers in jeopardy. The bill we are introducing today eliminates the authorized generic loophole, protects the integrity of the 180 days, and improves consumer access to lower-cost generic drugs. I urge my colleagues to support this timely and important piece of legislation.

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