Fair Prescription Drug Competition Act

Mr. President, Americans are resilient. Throughout our Nation's history, we have stood up to every challenge and we have stood together. At this moment in history, we face the challenge of recovering from the worst economic recession since the Great Depression. Through no fault of their own, too many Americans have lost their jobs and continue to struggle to find work in this tough economy. Putting Americans back to work is the key to economic recovery and must be the No. 1 goal for this Congress.

Today, I offer my own seven-point plan to help us reach that goal. This jobs plan recognizes that small businesses are America's job creators and, thus, our efforts must be targeted toward helping small businesses start up, grow, and prosper.

In Maine alone, we have 141,000 small businesses. During the past decade, America's small firms have created about 70 percent of all new jobs. But far too often Congress directs Federal policies and attention toward those businesses deemed too big to fail. Instead, we must redirect our efforts toward those small businesses that are too entrepreneurial to ignore.

The plan I am introducing today is based on extensive conversations I have had with small business owners and workers throughout the State of Maine. It also represents a great deal of hard work by my staff.

While each State has its own particular opportunities and challenges, the fundamentals of a jobs-oriented economic recovery are similar everywhere. As I illustrate my seven-point plan with examples from my home State of Maine, I believe the Presiding Officer and my colleagues will recognize similarities in their own home States.

First, my plan to build a 21st century economy begins with building a 21st century workforce. America's greatest asset is its people. Ensuring that American workers get the education and job training they need to compete in an increasingly global economy must be a top priority.

My plan amends the Workforce Investment Act to place special emphasis on job training programs that assist our manufacturing industry. I am tired of seeing so many manufacturing jobs leave my State and our Nation to go overseas. It is important we have a strategy to work with manufacturers, to work with local community colleges and universities to develop the manufacturing base curriculum, job training

programs, and research opportunities to ensure this generation and the next have the education and skills for the jobs of today and tomorrow. Some of those manufacturing jobs are gone forever. But others are coming online, and America must lead and Congress must support targeted funding to help provide the resources for this education and training.

In addition, we must provide workforce development assistance to those communities harmed as a direct consequence of the closure or realignment of military installations.

For example, the State of Maine is expected to lose more than 6,500 military and civilian jobs following the decisions made by the Base Realignment and Closure Commission in 2005. We are losing the Brunswick Naval Air Station in our State. There are many other States, including Illinois, Missouri, and New Jersey that are facing similar losses. In Virginia, nearly 40,000 jobs will be lost. In such cases where decisions made at the Federal level directly affect local employment, we have a special obligation to make sure displaced workers have the training and education they need to find new employment in their communities. After all, these communities have structured their economies to support military operations for decades, in many cases. Now that that lynchpin of the local economy is being pulled out, surely we have an obligation to help with the adjustment. My plan would redirect Economic Development Administration funds--EDA resources--to those communities most harmed by these decisions.

Targeted Federal funds can also be a catalyst for new economic opportunities. For example, I worked to secure one-time funding for a radiologic technician training program at a Maine community college. This program had broad support from local hospitals and from the college, but they simply couldn't afford the expensive equipment to get the program under way. With that one-time Federal investment, the program is now completely self-sustaining, and it produces between 18 and 20 graduates a year. Job placement has been 100 percent, with graduates earning starting salaries of about $40,000 a year. I am sure similar targeted job training success stories can be found in every State, and we ought to build on them.

We must also fix what has not worked as well as it should. Government agencies must provide more efficient and productive services to the American people. The Department of Labor, for example, should reduce paperwork and redtape associated with Federal job training programs. The Department should identify ways it could cut costs by working more closely with other government entities, such as the Department of Education, and with the private sector. The best programs I have seen at community colleges, for example, combine some job training funds with commitments from private employers to hire the graduates and to help shape those job training programs so we are training people for the jobs that exist or that are going to exist.

The second part of my plan would encourage innovation in Maine's natural resource-based economy. Nowhere is there greater potential than in energy. I want the United States to lead the world in developing renewable energy technologies, and that is going to require significant private and public investments to develop this technology and to make its deployment affordable. For example, deepwater offshore wind has enormous potential to help us meet our Nation's electricity needs, and it presents an exciting opportunity to create thousands of much needed, good-paying, and sustainable green jobs. Estimates show that the development of just 5 gigawatts of offshore wind off the coast of Maine--and that is just a fraction of the overall potential--could power more than 1 million homes, attract $20 billion of investment, and create more than 15,000 green energy jobs that would be sustained over 30 years.

Deepwater offshore wind is the key transformative technology that America needs in order to compete globally. Europe, China, Japan--our technology competitors--continue to make far larger investments in offshore wind R&D than we do. I am proud of the work of the University of Maine and the DeepCwind Consortium private sector investment to deploy loading wind turbines, which would be the first of its kind in the world, placing the United States in a position to lead in deepwater offshore wind technology.

Federal investments in programs to spur the advancement of deepwater offshore wind is an investment in America's future. Federal and State seed funding is expected to yield up to $4 billion in private sector investment over the next 10 years in Maine alone. With these investments, Maine is well positioned to be a global leader in this promising source of alternative energy. We must not lose these jobs to China, as has increasingly occurred with solar technology. Let's not let it happen with deepwater offshore wind technology.

We must also do more to promote agricultural exports. I know this is an issue of great interest to the Presiding Officer. In Maine, blueberries, potatoes, and lobster help create and sustain jobs in our State. Every $1 billion in agricultural exports supports 12,000 jobs. Therefore, increasing exports of our agricultural products could play an important role in reviving our economy. Boosting support for the Department of Agriculture's Foreign Agricultural Services will help promote our homegrown natural products abroad. This effort to increase agricultural exports could be paid for by strengthening our effort to curtail wasteful agricultural subsidies, such as payments to very wealthy corporate farmers who, frankly, do not need Federal assistance.

The corn-based ethanol tax break is another example of an extraordinarily expensive subsidy, costing taxpayers some $6 billion annually, and which has produced a host of problems from higher grain prices to impaired engine performance. We must reevaluate all programs that have not performed as promised and then reallocate their funding to job-creation initiatives and to deficit reduction.

Third, we simply must do more to encourage job creation and investment by small business. My plan includes a series of tax reform proposals targeted at these engines of job growth. The tax package agreed to by Congress and the President in December included a 2- percent cut in the employee portion of the payroll tax, but no cut was provided for the employer portion of the payroll tax.

With unemployment stuck above 9 percent for 21 consecutive months, we must do more to encourage businesses to hire. When I talk to small businesses, they tell me this is something we can do that would directly reduce the cost of hiring and encourage them to bring on more workers. My proposal includes a 2-percent reduction of the employer portion of the payroll tax on the first $50,000 of payroll for 1 year. This reduction in the employer portion of the payroll tax is estimated to lead to the creation of 1.4 million jobs. This will work.

As with the employee-side payroll tax relief we passed in December, my proposal would require the Treasury to reimburse the Social Security trust fund using general revenues. Again, the cost of this payroll tax relief can be offset by eliminating the ethanol and other wasteful subsidies and by implementing budget cuts for discretionary spending.

There are other provisions in my bill that are targeted toward small businesses. For example, section 179 is a provision of the Tax Code that small businesses have found to be very helpful. It allows them to immediately expense equipment purchases rather than depreciate those purchases over many years.

I also propose making permanent the tax provision allowing restaurants to depreciate equipment over 15 years rather than 39\1/2\ years. Think about it. If a restaurant is only renovating once every 40 years, that is not going to be very feasible or attractive to its patrons.

The plan would also reduce the depreciation periods on commercial and residential buildings to 15 years to encourage investment and jump- start the economy. We did that back in 1981, and it worked.

My fourth point is one that some small business owners, I know, would put at the very top of the list of what we should do; that is, we need to reduce the redtape that ties them in knots. Let me provide an illustration.

We need to make sure Federal regulations do not impose an unnecessary

burden on job creation. The EPA has proposed a new regulation known as the boiler MACT. This rule, as originally proposed, could cost Maine businesses $640 million to comply with, despite the fact there are less costly approaches to deal with boiler emissions. It also has Federal agencies working at cross-purposes. Here we have the Department of Energy trying to encourage the conversion to biomass boilers at the same time the EPA is putting burdensome new regulations on them.

The result in Maine was the Department of Energy awarded one Maine high school a $300,000 grant to help buy a new wood pellet boiler to reduce the school's use of fossil fuels. But because EPA's proposed regulations would have greatly increased the cost of that boiler, the school board ended up turning down the grant. This is an example of where the right hand did not know what the left was doing.

My point is that Federal agencies should take into account the impact on small businesses and job growth before imposing new rules. Thus, my plan contains several provisions to help reduce onerous regulations and cut redtape.

First, it requires Federal agencies to analyze the indirect costs of regulations, such as the impact on job creation, the cost of energy, and consumer prices.

Second, it obligates Federal agencies to comply with public notice and comment requirements and prohibits them from circumventing these requirements by issuing unofficial rules as ``guidance documents.''

Third, it creates a mechanism to protect small businesses from onerous penalties the very first time they fail to comply with a paperwork requirement as long as no harm comes from that failure. If it is an honest, first-time mistake that causes no harm, why do we want to slap that small business with a heavy fine? That does not make sense.

The fifth point in my plan is aimed at our transportation policies. Getting raw materials to the factory or farm and finished products to market quickly, efficiently, and safely must be a priority. But the inconsistent and inequitable Federal policy on truck weight limits on interstate highways provides a telling example of where we are doing the opposite. The consequences are particularly acute in Maine.

I have spoken on this issue many times, so I am going to briefly describe it. Maine's businesses and trucking firms are currently at a competitive disadvantage because Federal law prohibits the heaviest trucks from using Federal interstates and instead diverts them to downtown streets and secondary roads. This means, for example, that nearly 260 miles of nonturnpike interstates that are the major economic corridors in my State are off-limits. Yet these same trucks are permitted on many Federal interstates in New Hampshire, Massachusetts, parts of New York State, and neighboring provinces in Canada. That makes Maine and Vermont an island of noncompetitiveness. It just does not make sense. The heaviest trucks belong on the roads built for them.

In 2009, I authored a law to establish a 1-year pilot project to allow trucks weighing up to 100,000 pounds to travel on Maine's Federal interstates. This project was an enormous success. It helped to preserve and create jobs because it allowed our businesses to be more efficient. It lowered fuel costs. It resulted in fewer carbon emissions, and it made our roads safer. Working with Senator Leahy, I am trying to make this permanent.

Point No. 6: We must invest in America's future. Research and development investment is critical to the breakthroughs we need to keep our economy competitive and to create good-paying jobs. The R&D tax credit provides an important incentive, but it needs to be updated so more companies can benefit from it. And there needs to be more certainty. Just having that tax credit from year to year discourages the kind of long-range planning and investment companies need. My plan includes a 5-year extension of the R&D tax credit. That is likely to happen, but by doing it year by year we create all these disincentives for investment.

Finally, the seventh point in my plan would help expand opportunities for small businesses and farmers to do business with the Federal Government. We need to help our small businesses, our farmers tap into markets they have not previously explored. As the former head of the New England Small Business Administration, I know how essential this drive for new markets is for job creation and for our economy.

One approach we are going to take is my Washington and State offices are going to redouble their efforts to help small businesses reach the Federal Government because the Federal Government is the largest consumer of goods and services in our country. I know that disturbs a lot of Americans right now, and it shows the size of the Federal Government. The fact is, the Federal Government purchased more than $535 billion worth of goods and services in this past fiscal year. Some 23 percent of that spending is directed to small businesses, and last year the value of Federal contracts to small businesses in my State alone was more than $250 million. If we can expand the opportunity for small businesses to do business with the Federal Government, that is a brandnew market for their products and services.

Last year, along with my colleague, Senator Snowe, and in conjunction with the Department of Defense Northeast Regional Council and the Maine Procurement Technical Assistance Center, I sponsored a small business matchmaker conference that brought together government agencies and prime contractors with our small business community to match up the purchasing needs with goods and services. It was a 3-day conference in south Portland. It was a tremendous success. We had about 385 small business owners and representatives from 135 government agencies and prime contractors looking to subcontract work meet face to face, sit down, exchange ideas.

Let me give an example of a successful connection that was made. A representative of a $2 billion aerospace company sat across the table from the owner of a 40-employee Maine machine shop with experience in very high quality, high-end custom work. That first meeting led to a significant business relationship that continues to grow.

I note that at our conference in south Portland, our total number of registrants was 597 people, and that just shows how eager our small businesses are to expand their customer base.

One great benefit of the matchmaker approach is instead of a small business working for weeks or even months to try to find the right person in the vast government bureaucracy or the right prime contractor, our entrepreneurs merely need to sit down across the table with them. It is direct, effective, and efficient.

But, obviously, it is not easy to do business with Uncle Sam. The rules and regulations are often strict, cumbersome, and unfamiliar. That is where our offices can help.

My plan also calls for Congress to work harder to open the Federal marketplace beyond the Washington beltway to entrepreneurs in every State. That will benefit our job creators and the American taxpayer because there will be more competition.

The struggling economy has challenged our Nation's entrepreneurial spirit, but that spirit remains strong in Maine, in your State of New York, Madam President, and across the Nation. We will recover from this deep recession, but the recovery depends on the right policies in Washington to encourage the innovative and bold job creators of America. That means helping our small businesses start up, grow, prosper, sustain, and create good jobs.

My seven-point jobs plan offers a straightforward path forward for Congress to lead rather than impede job creation at this critical juncture in our history and in our recovery.

Mr. President, I ask unanimous consent that letters of support be printed in the Record.

Mr. President, I rise today with my colleagues, Senators Shaheen, Leahy, Inouye, Stabenow, and Schumer, to reintroduce an important piece of legislation, the Fair Prescription Drug Competition Act. Our legislation eliminates one of the most prominent loopholes that brand name drug companies use to limit consumer access to lower-cost generic drugs; it ends the marketing of so-called ``authorized generic'' drugs during the 180-day exclusivity period that Congress designed to provide specific incentives to true generics to enter the market.

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. Some argue that authorized generic drugs are cheaper than brand name drugs and, therefore, benefit consumers. However, authorized generics only serve to reduce generic competition, extend brand monopolies, and lead to higher health care costs for consumers over the long-term.

After up to 20 years of holding a patent for a brand name drug--the brand-name manufacturer--which has already been handsomely rewarded for its investment--doesn't want to let go of its profits. So, it repackages the drug and refers to it as a generic in order to extend its market share, while cutting in half the financial incentive for an independent generic to enter the marketplace. This is a huge problem and one that is becoming even more prevalent as patents on some of the best-selling brand name pharmaceuticals expire.

In 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, known as the Hatch-Waxman Act, 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. Specifically, the Hatch-Waxman Act provided for a 180-day marketing exclusivity period for the first generic firm that successfully challenges a brand-name patent under the Abbreviated New Drug Application, ANDA, process--thereby providing a crucial incentive for generic drug companies to enter the market and make prescription drugs more affordable for consumers.

Filing a patent challenge is expensive and requires enormous up-front costs for the generic company. Yet, the 180-day exclusivity incentive to launch a patent challenge is being widely undermined by authorized generics. According to one account, since 2004, ``authorized generic versions have appeared for nearly all drugs with expiring U.S. patents.'' And, because authorized generics are still allowed, an independent generic can get all the way to the end of a patent challenge--even winning in court--but still lose the anticipated reward of 180-day market exclusivity because the brand-name company can, and does, launch an authorized generic. The fact that the brand-name company can launch an authorized generic even if it loses a patent challenge to a generic company gives it an incentive to pursue multiple additional patents on dubious grounds, just for the sake of extending its market share. The fact remains that brand-name firms regularly introduce authorized generics on the eve of generic competition, further extending their hold on the market and chilling competition from independent generic drugs.

Every American agrees on the need to reduce health care costs. Today, generic medications comprise 69 percent of all prescriptions in this country, yet only 16 percent of all dollars spent on prescriptions. Furthermore, in 2007, the average retail price of a generic prescription drug was $34.34, compared to the $119.51 average retail price of a brand name prescription drug. In fact, generic drugs save consumers an estimated $8 billion to $10 billion a year at retail pharmacies. For working families, these savings can make a huge difference, particularly during difficult economic times.

Passage of the Fair Prescription Drug Competition Act would revitalize and protect the true intent of the 180-day marketing exclusivity period created in the Hatch-Waxman Act. This bill does just that by eliminating the authorized generics loophole, protecting the integrity of the 180-day exclusivity period, and improving consumer access to lower-cost generic drugs.

I urge my colleagues to support this timely and important piece of legislation.

Mr. President, I rise today with my colleagues, Senators Shaheen, Leahy, Inouye, Stabenow, and Schumer, to reintroduce an important piece of legislation, the Fair Prescription Drug Competition Act. Our legislation eliminates one of the most prominent loopholes that brand name drug companies use to limit consumer access to lower-cost generic drugs; it ends the marketing of so-called ``authorized generic'' drugs during the 180-day exclusivity period that Congress designed to provide specific incentives to true generics to enter the market.

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. Some argue that authorized generic drugs are cheaper than brand name drugs and, therefore, benefit consumers. However, authorized generics only serve to reduce generic competition, extend brand monopolies, and lead to higher health care costs for consumers over the long-term.

After up to 20 years of holding a patent for a brand name drug--the brand-name manufacturer--which has already been handsomely rewarded for its investment--doesn't want to let go of its profits. So, it repackages the drug and refers to it as a generic in order to extend its market share, while cutting in half the financial incentive for an independent generic to enter the marketplace. This is a huge problem and one that is becoming even more prevalent as patents on some of the best-selling brand name pharmaceuticals expire.

In 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, known as the Hatch-Waxman Act, 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. Specifically, the Hatch-Waxman Act provided for a 180-day marketing exclusivity period for the first generic firm that successfully challenges a brand-name patent under the Abbreviated New Drug Application, ANDA, process--thereby providing a crucial incentive for generic drug companies to enter the market and make prescription drugs more affordable for consumers.

Filing a patent challenge is expensive and requires enormous up-front costs for the generic company. Yet, the 180-day exclusivity incentive to launch a patent challenge is being widely undermined by authorized generics. According to one account, since 2004, ``authorized generic versions have appeared for nearly all drugs with expiring U.S. patents.'' And, because authorized generics are still allowed, an independent generic can get all the way to the end of a patent challenge--even winning in court--but still lose the anticipated reward of 180-day market exclusivity because the brand-name company can, and does, launch an authorized generic. The fact that the brand-name company can launch an authorized generic even if it loses a patent challenge to a generic company gives it an incentive to pursue multiple additional patents on dubious grounds, just for the sake of extending its market share. The fact remains that brand-name firms regularly introduce authorized generics on the eve of generic competition, further extending their hold on the market and chilling competition from independent generic drugs.

Every American agrees on the need to reduce health care costs. Today, generic medications comprise 69 percent of all prescriptions in this country, yet only 16 percent of all dollars spent on prescriptions. Furthermore, in 2007, the average retail price of a generic prescription drug was $34.34, compared to the $119.51 average retail price of a brand name prescription drug. In fact, generic drugs save consumers an estimated $8 billion to $10 billion a year at retail pharmacies. For working families, these savings can make a huge difference, particularly during difficult economic times.

Passage of the Fair Prescription Drug Competition Act would revitalize and protect the true intent of the 180-day marketing exclusivity period created in the Hatch-Waxman Act. This bill does just that by eliminating the authorized generics loophole, protecting the integrity of the 180-day exclusivity period, and improving consumer access to lower-cost generic drugs.

I urge my colleagues to support this timely and important piece of legislation.

Mr. President, the Internet has had a profound impact on the daily lives of millions of Americans by enhancing communications, commerce, education and socialization between and among persons regardless of their location. Internationally, we have seen the transformative power of the Internet in places like Egypt. A free and open Internet gives strength and a voice to people worldwide and should be protected from censorship and other forms of suppression. But the Internet and those who engage in communications and commerce across cyberspace must be safe--protected from predators like criminals, terrorists and spies who wish to exploit or compromise information and systems connected to the Internet. Our Nation is vulnerable to such attacks, but working together, in partnership with the private sector, we can find a balance that keeps information flowing freely while keeping us all safe from harm.

I have been focusing on cybersecurity issues for quite some time. More than a year ago, as the former chairman of the Terrorism and Homeland Security Subcommittee of the Judiciary Committee, I chaired a Subcommittee hearing titled ``Cybersecurity: Preventing Terrorist Attacks and Protecting Privacy in Cyberspace.'' The hearing included witnesses from key federal agencies responsible for cybersecurity, as well as representatives of the private sector. We reviewed governmental and private sector efforts to prevent a terrorist cyber attack that could cripple large sectors of our government, economy, and essential services.

The cybersecurity expertise that I have developed has convinced me that the Government and the private sector can and should work together to protect the American people in cyberspace. As a result, I am reintroducing the Cybersecurity and Internet Safety Standards Act, CISSA. This bill, which is cosponsored by Senator Whitehouse, will require the Secretary of Homeland Security, in consultation with the Attorney General, the Secretary of Commerce, and the Director of National Intelligence, to conduct an analysis to determine the costs and benefits of requiring internet service providers and others to develop and enforce minimum voluntary or mandatory cybersecurity and Internet safety standards. Under this bill, the Secretary of Homeland Security will be required to report to Congress within one year with specific recommendations. Cybersecurity must be a top priority. This bill will help secure our nation's digital future by keeping the American people and our cyber infrastructure safe without hampering the freedoms inherently found in an open and accessible Internet.

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

Mr. President, we are trying to resolve one of the great problems I am sure my colleagues are sensitive to; that is, the infrastructure of this country. Today we have two witnesses next to each other, the head of the AFL-CIO and the head of the U.S. Chamber of Commerce, to show that liberals, conservatives, labor, and industry all feel this should be at least the second highest priority in America.

When I heard the President's budget yesterday and I looked at it, I shook my head in disbelief: $8.7 trillion in new spending, $1.6 trillion in new taxes--all these things. I remembered back when I was complaining in 1996 at this very podium during the Clinton administration. That was his budget. It was $1.5 trillion. Do my colleagues know that the deficit in this President's budget is greater than the entire budget of 1996--to run this whole thing called America. It was a shocker to me. It reminded me about how people talk about entitlements and how we are going to have to do something with that.

Something we can do right now is something I tried to do last year and the House Members are trying to do right now. When the President gave his message, he talked about how he was going to freeze nondefense discretionary spending and everyone applauded, thinking that was a great austerity program. In reality, he is talking about after he has increased it from 2008 levels to 2010 levels and then freezing in those increases. That is what I find unreasonable.

So I am reintroducing S. 360--I have a whole lot of cosponsors--to wind back the discretionary spending to 2008 levels and then freeze it at 2008 levels.

I will just tell you, briefly, what the bill does. It reduces the nonsecurity spending to 2008 levels and will hold it there for 5 years through 2016. After that, spending will be allowed to increase with the CPI of inflation between 2017 and 2021. The amount of money saved by this in that period of time would be over $1 trillion.

If I can put up the chart. This chart shows what is going to happen if we don't do that. The red is what is projected in the President's budget; the blue is what is projected if we are successful in doing this. I am very proud the House of Representatives Republicans in their budget have included my bill I introduced last year and that I am reintroducing today as S. 360 as part of their budget. I think it is responsible. We will be looking forward to getting cosponsors.