Floor Statements

Mr. President, I rise to make a few comments about the historic Medicare legislation that President Bush signed into law yesterday.

I will center my remarks today on the provisions of the bill that amend the Drug Price Competition and Patent Term Restoration Act of 1984. I am a coauthor of the 1984 law and it is of particular interest to me. This law, often referred to as the Waxman-Hatch Act or Hatch Waxman, is of great importance to my fellow Utahns and the rest of the American public as it saves an estimated $8 to $10 billion for consumers each year.

Over the past 2 years, the Senate has spent considerable time and effort debating refinements to the 1984 law designed to close some loopholes that emerged and were exploited. While I would have preferred a more comprehensive reexamination of the statute with the goal of assessing how the law might be changed to facilitate new biomedical research and how best to disseminate the fruits of this research to the public in a quick and fair fashion, the amendments made to Hatch-Waxman made under the leadership of Senators Gregg, Schumer, McCain, Kennedy, Collins, and Edwards are very significant.

It has been my position for some time that once the Congress adopts and the President signs, as he did yesterday, Medicare reform legislation that includes a prescription drug benefit, pressure will grow on Congress and the Food and Drug Administration to find new ways to bring new biotechnology products to the public when the patents expire. The Center for Medicare and Medicaid Services will be compelled to look for ways to economize on the purchase of drugs and it seems likely to me that the Department of Health and Human Services will have to explore regulatory measures that can produce saving. The Commissioner of Food and Drugs, Dr. Mark McClellan, has indicated a willingness to examine this issue. Few, if any, of my colleagues in Congress have to date joined in the discussion surrounding whether and, if so, how to create a fast track approval system for biologic products, but I believe the bill signed into law yesterday will encourage this debate. I welcome this debate and recognize that very important public health matters are at its heart. As well, retaining America's worldwide leadership in biomedical research is at stake whenever we consider legislation that affects pharmaceutical related intellectual property.

We must proceed carefully but we must proceed. Critical to the success of this debate is a need to observe the principle of balance contained in the original 1984 law so that both research based firms and generic firms receive new incentives that will allow them to continue to produce and distribute the products that the American public deserves.

As more and more biological products come to the market, the pressures on the Federal Government, State governments, private insurers, and private citizens to pay for these products will result in considerable pressure to create a fast track FDA approval system for off-patent biological products. Such a mechanism was not discussed in the 1984 negotiations that resulted in Hatch-Waxman largely because the biotechnology was still in its infancy. This is not the case today. Few, if any, of my colleagues in Congress have to date joined the discussion surrounding creating a fast track approval for off-patent follow-on biologic products, but I believe the new law signed yesterday will encourage this debate.

As part of an appraisal of the laws relating to the development and approval of pharmaceutical products, I would also hope that my colleagues and the public will examine the full complement of incentives that Senator Lieberman and I have included in our bi- partisan bioterrorism bill, S. 666. These incentives, which include day-to-day patent term restoration and a harmonization of the marketing exclusivity period to the 10-year term employed by the EU and Japan, will be helpful for the development of countermeasures to bioterrorist attacks and they should also be carefully considered with respect to developing new vaccines, diagnostics, and preventive and therapeutic agents for a host of other diseases and conditions.

With respect to the patent challenge provisions of the Medicare bill, I want especially to commend the efforts of Senator Gregg, Chairman of the HELP Committee and the Majority Leader, Senator Frist, for working so hard to improve this legislation. There can be no doubt that the bill the President signed yesterday is a big improvement compared with the McCain-Schumer bill of last year, S. 812, that passed the Senate.

I must also commend my colleagues in the House including, Commerce Committee Chairman Billy Tauzin, Commerce Committee Ranking Democrat John Dingell, and my colleagues from the House Judiciary Committee, Chairman Jim Sensenbrenner and Ranking Democrat John Conyers, and Intellectual Property Subcommittee Chairman Lamar Smith for their help in vastly improving the Gregg-Schumer-Kennedy amendments that passed the Senate by a 94-1 vote this summer.

As the sole dissenter in the Senate, I am pleased the conferees were able to work in a bipartisan, bicameral spirit to correct the constitutional flaw in the Senate-passed bill. I commend the Department of Justice for its work that helped dislodge the unconstitutional ``actual controversy'' language from the declaratory judgment provision of the bill.

I am also pleased that the conferees decided to reject the provision of the Senate bill that would have resulted in the so-called parking of exclusivity in cases in which a generic challenger could show that the patents held by a pioneer drug firm were not infringed or were invalid. In order to give an incentive for vigorous patent challenges, the 1984 law granted a 180-day head start over other generic drug firms when the pioneer firm's patents failed or were simply not infringed. As I will explain in some detail, I think there may be a way to improve this language further and to save consumers a considerable sum of money in the process.

The 180-day marketing exclusivity rules were first enacted as part of the Waxman-Hatch Act. The policy behind these provisions is to benefit the public by creating an atmosphere that ensure vigorous challenges of the patents held by innovator drug firms.

The intent of this section of the 1984 law was to award the 180-day head start

to the first successful challenger of a pioneer firm's patents. Unfortunately, we drafters of the statute employed language that has been interpreted by the courts to grant the 180-days of exclusivity to the first generic drug applicant to file an application with the FDA that challenges the patents.

I must say that in most cases the first filer and first successful applicant was the same applicant. But I believe that the line of court decisions that include the Mova and Granutec cases has resulted in the establishment of a first filer regime that is not without unintended consequences and perverse incentives. The mismatch between the rights accorded to the first applicants and first successful challenger contributed to an atmosphere in which anticompetitive agreements were entered into between certain pioneer and generic drug firms.

I am pleased that the Medicare reform bill signed into law yesterday contained Senator Leahy's Drug Competition Act, which is designed to increase enforcement of longstanding provisions of antitrust law that prevent anti-consumer agreements. The 2002 FTC study, ``Generic Drug Entry Prior to Patent Expiration,'' catalogs the agency's actions in this arena including such cases as those involving Hoescht and Andryx and Abbott and Geneva.

I am also pleased that the Senate language prevailed on Senator Leahy's Drug Competition Act so that potentially anticompetitive agreements between research-based and generic drug firms will be reported to both the Department of Justice and the Federal Trade Commission. I worked extensively with Senator Leahy on his bill in the 107th Congress and took the lead, with his cosponsor, Senator Grassley, in convincing the House conferees of the wisdom of the Senate's dual reporting requirement.

So, the conferees made a number of important improvements to provisions of the legislation affecting challenges to drug patents. At our August 1, 2003, Judiciary Committee hearing, both the FDA and FTC expressed reservations about some elements of the Senate bill's rules pertaining to the 180-day marketing provision. The Administration, correctly in my view, took exception to the provisions in the Senate bill that would have allowed a sue now/use the exclusivity later--and perhaps years later at that--policy on marketing exclusivity.

At the August 1st hearing, Mr. Robert Armitage, General Counsel of the Eli Lilly Company, presented compelling testimony on the matter of ``parking'' or delaying, the use of the 180-day exclusivity until the basic patents expire. The question confronting policymakers centered on the wisdom of retaining the Gregg-Schumer-Kennedy provision that would have encouraged very early lawsuits by those with, for examples, noninfringing formulations of the pioneer product, in order to gain the potentially very lucrative 180-days of exclusivity down the road.

I welcome and expect that day will come when Congress will reexamine the whole rationale and operation of the 180-day marketing exclusivity provisions. The day will come when the Congress will be forced to confront the incongruity in the statute, pointed out by my friend and skilled patent-challenging lawyer and philanthropist, Al Engelberg, is awarding 180 days both for a successful invalidity challenge and an non-infringement action. The former, a finding of invalidity, accrues to all generic firms while the latter benefits only the specific non- infringer. This is a distinction with a difference in a sector of the economy where a whole cottage industry has grown up fueled in large part by non-infringement suits to non-basic patents. It is less than clear that the public benefits as much as it can or should under the present system which is left largely in place by the new bill language. This issues deserves further discussion.

Nevertheless, I am pleased that the Senate language that allowed long-term parking of exclusivity was modified in an important way by the conferees. I want to commend the FDA and especially the Chief Counsel for Food and Drugs, Mr. Dan Troy, and the soon-to-be betrothed Associate Commissioner for Legislative Affairs, Mr. Amit Sachdev, for their contributions in this area.

Having now commended the administration for helping to improve materially the Senate version of the 180-day provisions, I must also unfortunately report to my colleagues in the Senate and to the American public that we have not accomplished as much as possible with respect to the 180-day provisions.

First off, I continue to believe that it is both unfair and ill- advised to retain the bill language that does not reward a non-first- filer to gain the 180-days marketing exclusivity in the case, which will admittedly be rare, in which the subsequent filer prevails on a patent invalidity challenge. I am told that conferee staff first thought that the provision as drafted, and now signed into law, would result in a subsequent filer's successful invalidity challenge forfeiting the first filer's 180 days of marketing exclusivity. Although the successful challenger does not get the 180-day head start, at least under this reading, the subsequent successful challenger is not penalized with respect to market entry. Upon further scrutiny of the statutory language, it is my understanding that in such circumstances the language may actually work to grant the 180-days of marketing exclusivity to the first filer, so that the successful subsequent challenger not only does not get the 180-day benefit, but actually receives a 180-day penalty for invalidating the patent.

If this is the correct way to read the statute, the law should be changed.

I am told that the staff of any conferee nor the FDA strongly defended this policy. Unfortunately, nor was there agreement to change the language to at least clarify that the subsequent challenger's success was at least a forfeiture event or, preferable from my perspective, would result in the granting of the 180-days to the successful challenger in a patent invalidity challenge rather than benefitting the fastest paper shuffler.

This is bad policy.

Finally, I must unfortunately report to my colleagues that the new statute retains the Gregg-Schumer-Kennedy provision that may cost the Federal government, according to the Congressional Budget Office, $700 million over the next 10 years. Moreover, it is my understanding that the total cost of this provision to consumers over the next 10 years could exceed $3 billion.

At issue are the sections of the bill that essentially give the first filer an exclusive right to the potential 180-day marketing exclusivity until its case is decided at the appellate court level. The question arises of what happens if a subsequent filer is not sued by the pioneer firm and is ready, willing and able to go to market but for waiting for the disposition of the first filer's challenge in the appellate court? If the first filer prevails in the appellate court, it will receive the 180-days of exclusive marketing even though one or more subsequent filers were ready, willing, and able to go to the market long before the first filer's challenge was resolved.

I would also note the FTC study documents that when the first filer wins in the district court, they almost always prevail on appeal. The FTC opposed reinstating the earlier policy of the appellate court trigger because it believes that, on average, consumers will lose out while generic firms get an extra measure of certainty.

In any event, subsequent to the Judiciary Committee hearing in August and throughout the fall as the conference committee met, I was involved in participating and facilitating discussions designed to craft language to close this new loophole sanctioned by the Gregg-Schumer- Kennedy language as well as to make a few other clarifications to the parking language. Specifically, I preferred statutory language that would automatically convert unsuccessful Paragraph IV invalidity/ noninfringement challenges to standard Paragraph III--``the patents expire on''--applications. FDA believes it can accomplish this by rule or guideline, but the courts have not been kind to FDA rulemaking with respect to Hatch-Waxman in recent years.

While I am mindful that the forces behind the first filer system of challenge have won the day in this legislation, I think in the circumstance when the subsequent challenger has not been sued, and may have even been issued a covenant not to be sued by the pioneer firm, that the first filer should at least forfeit its 180 days if it is not prepared to go to market in the 75-day grace period the new provision creates. This is

good for the consumer and sound policy since the rationale behind the 180-day provision is to create an incentive for challenges to the pioneer's patents, not to create an entitlement to the first applicant to file a patent challenge with the FDA in the Parklawn Building. It seems to me that the first time that a blockbuster product is kept off the market, perhaps for over a year, due to the application of this new law and there is a second generic ready, able and willing to go to market, there will be a great public clamor, as there should be.

At one point, I thought I was close to agreeing to language with Senator Kennedy and others to close this new loophole. Unfortunately, we did not reach agreement and since this was a part of the legislation in which the Senate and House language was virtually identical, it is understandable the conferees concentrated their efforts on those many provisions in which there were substantial differences. On the very last days before the conference report was completed, Senator Schumer and I also came close to closing this newly created loophole, but time ran out on this effort.

Let me just say I am mindful that the politics and financial interests with respect to this issue among those in both the research- based firms and generic drug companies are a very sensitive matter. I also recognize it will be exceedingly difficult to reopen these provisions now that the President has signed the bill into law. Nevertheless, I think we got this aspect wrong and we should try to fix it. I pledge to continue to work with Senator Gregg, McCain, Schumer, Kennedy as well as Representatives Tauzin, Dingell, Sensenbrenner, Smith, and Conyers and other interested members of Congress and other affected parties to fix this problem before consumers have to pay for this ill-advised policy.

In the interest of moving this issue along in a constructive fashion, I have developed a discussion draft that emerged out of my discussions with Senator Kennedy and others that addresses these issues. Frankly, much of this draft reflects refinements to a draft that Senator Kennedy prepared in part as a response to a draft prepared largely by several private sector parties earlier this year that I submitted to the Medicare conferees for their consideration. It is my understanding that the administration does not oppose this language but, unfortunately, neither did it support this approach due, in some measure, to the fact that it was not anxious to open new issues in the already complex Medicare conference.

Although they both opposed the underlying Medicare reform bill, I commend my colleagues, Senators Kennedy and Schumer for their interest in improving this particular aspect of the legislation.

In closing, let me say again that Senators Gregg, Kennedy, Schumer, McCain, and Frist have worked hard to improve the patent challenge provisions of current law and all deserve our thanks.

I am very proud of the Drug Price Competition and Patent Term Restoration Act, which has done so much to help consumers have access to more affordable medications.

The underpinning of this great consumer measure is a very complex, legal framework. Any changes to the law must be carefully scrutinized to assure they achieve their intended effect.

I plan to monitor very carefully the implementation of the first, substantial Waxman-Hatch amendments in almost two decades and intend to work with my colleagues to make certain they achieve their intended purpose.

I welcome the views of any interested parties who wish to comment on this discussion draft, as well as other implementation issues that the Congress should consider.

At the same time, I think there are broader issues here it behooves the Congress to consider. These include the issue of follow-on biologics as well as whether the law today contains the appropriate incentives, including intellectual property incentives, for pharmaceutical research and development in light of the fact that science appears to be moving away from an era of large patient population, small-molecule medicine to small patient-population, large biological molecule therapies.

Mr. President, I ask unanimous consent that the draft be printed in the Record.

Mr. President, I stand today in strong support of D. Michael Fisher, who has been nominated to serve for the U.S. Court of Appeals for the Third Circuit. Let me speak briefly about his background and the reasons I endorse his confirmation.

Attorney General Fisher has extensive legislative experience, having served for 22 years in the Pennsylvania General Assembly. He has also practiced in civil litigation for close to 20 years. Parenthetically, I would note my understanding that Attorney General Fisher's first law office was across the hall from my law office in Pittsburgh--the 9th floor of the Frick Building--in 1970. Since 1997, Attorney General Fisher has served as Pennsylvania Attorney General and he has been a great leader. He coauthored Pennsylvania's Megan's Law; he supported the passage of a State DNA postconviction statute; and he helped negotiate the landmark national tobacco settlement.

Attorney General Fisher's nomination is widely supported. His endorsers include Democratic Pennsylvania Governor Edward Rendell, the bipartisan 19-member Pennsylvania delegation to the U.S. House of Representatives, Pennsylvania State legislators, the Pennsylvania District Attorneys Association, and the Pennsylvania Trial Lawyers Association. He is also fully endorsed by serving attorneys general from across the country. The former attorney general of Tennessee, Charles W. Burson, who also served as legal counsel for former Vice President Gore, has written in support of Attorney General Fisher's nomination: ``While [Attorney General Fisher] and I may differ on particular issues, I am certain that as a Federal Appellate Judge, he will deliberately, and with an even hand, apply the law to the facts and render sound judgments.''

I cannot recall seeing such a range of support for a judicial nominee as Attorney General Fisher enjoys. It is truly impressive and speaks well of him.

I will support Attorney General Fisher's confirmation, and I urge my colleagues to do the same.

Mr. President, I am pleased that the Senate today confirmed James B. Comey as the Deputy Attorney General. James Comey brings a wealth of experience and perspective as a line prosecutor, as a manager in the U.S. Attorney's Office for the Eastern District of Virginia, and most recently as the U.S. attorney for the Southern District of New York. His record demonstrates that he is a leader, one who can inspire others to accomplish great things, and one who can oversee and manage an organization such as the Justice Department.

With the recent departure of Larry Thompson, who was a fine Deputy Attorney General, I am sure everyone shares my view that Mr. Comey has very big shoes to fill. However, I am confident that he is the right person for the job. His impressive background and past government service make me confident that he will be a great asset to the Department of Justice, the Judiciary Committee, and the American people.

The importance of the Deputy Attorney General within the Justice Department cannot be overstated. Over the years, the Deputy Attorney General's Office has played a greater role in overseeing the Department's operations, implementing new policy initiatives, and ensuring the effective enforcement of our criminal and civil laws.

A review of Mr. Comey's record establishes one simple fact--he is well qualified to serve as the Deputy Attorney General. Since January 2002, Mr. Comey has served as the U.S. attorney in the Southern District of New York, an office that many consider to be the premier U.S. Attorney's Office in the country. In the Southern District of New York, Mr. Comey has earned the respect of judges, defense counsel, and prosecutors for his professionalism, fairness and judgment. While serving as the U.S. attorney, Mr. Comey was responsible for leading his office in some of the more significant terrorism and white collar prosecutions.

Prior to assuming the position as the U.S. attorney, Mr. Comey served from 1996 to 2001, as managing assistant U.S. attorney, in charge of the Richmond Division of the U.S. Attorney's Office for the Eastern District of Virginia. From 1993 to 1996, Mr. Comey was an associate and later a partner at the law firm of McGuire Woods in Richmond, VA. Early in his career, from 1987 to 1993, Mr. Comey served as an assistant U.S. attorney in the Southern District of New York.

As a Federal prosecutor, Mr. Comey investigated and prosecuted a wide variety of cases, including firearms, narcotics, major frauds, violent crime, public corruption, terrorism, and organized crime. In the Eastern District of Virginia, he handled the Khobar Towers terrorist bombing case, arising out of the June 1996 attack of a U.S. military facility in Saudi Arabia in which 19 airmen were killed.

Mr. Comey was educated at William & Mary, B.S. with honors 1982, chemistry and religion majors, and the University of Chicago Law School, J.D. 1985. After law school, he clerked for then-U.S. District Judge John Walker in Manhattan.

Let me take one moment to highlight perhaps Mr. Comey's most important accomplishment. While serving his country in a variety of prosecutorial positions, he has demonstrated that he is a dedicated family man. He and his lovely wife, Patrice, are raising five wonderful children, ranging in age from 15 to as young as 3 years old.

Mr. Comey is a dedicated public servant, and a talented and well- respected prosecutor. He is uniquely qualified to lead as the Deputy Attorney General of the Justice Department.

I have been listening to the rather remarkable remarks from the other side, that this legislation has been rammed through the Congress, that it is partisan, when it is bipartisan. It has taken us 15 years to get here. It could take another 15 years if we do not support this bill right now.

We have been working on Medicare prescription drug legislation for 15 solid years. We have worked day in day out, hours, weeks, and months in order to get to this point. It is bipartisan. It was bipartisan in the House; when it passes today it will be bipartisan in the Senate.

The opponents of this bill keep saying that seniors will be worse off if this Medicare bill becomes law. Give me a break. We are going to put $400 billion out there for senior citizens so they will have a Medicare drug benefit. We are giving seniors a choice in coverage. Medicare beneficiaries may stay in traditional Medicare or they may choose to participate in one of the new Medicare Advantage plans.

We are improving health care for rural communities, something our friends on the other side have ignored for years. The fact is, it is time to realize that we are going to have to pass this legislation because it is the right thing to do and it will be a bipartisan vote.

We are devoting close to a quarter of this bill's funding to retiree health coverage. CBO told us that 37 percent of retirees could have lost their coverage if S. 1, the bill approved by the Senate earlier this year, had become law. This bill reduces that number to under 20 percent. I don't know how anyone can say this bill is going to be harmful to retirees when we are devoting $89 billion towards retaining retiree health coverage.

We also are improving access to less expensive, generic drugs by improving Hatch-Waxman.

The real reason our colleagues do not like this bill is that it is not an $800 billion bill. Our bill is $400 billion which provides for some private sector competitive models. The reason our opponents do not like our legislation is because they do not believe in the private sector.

With regard to their argument that some of the big companies are going to benefit from this legislation, of course they will benefit. The argument I find most amusing is the claim this bill will lead to increased drug company profits.

The reason the bill is so desperately needed is because beneficiaries with low incomes are unable to afford their prescriptions today. They have to choose between food, rent, and taking their medicines. When this prescription drug benefit goes into effect, low-income beneficiaries will finally be able to get their prescriptions filled. This legislation includes generous subsidies so the low-income will be able to receive their prescription drugs without worrying about how to pay for them.

Of course, this is going to lead to increased drug sales. Surely this is no surprise to anyone. Any prescription drug bill that works is going to lead to increased drug sales. Where are the medicines supposed to come from, except from the manufacturers of those medicines? Every single Medicare prescription drug bill introduced by these naysayers also would have increased drug sales, and they know it.

This bipartisan conference report has the same basic drug benefit structure that passed the Senate by a vote of 76 to 21--the same one-- and we are hearing these arguments here today? My distinguished friend from Massachusetts voted for that bill, and the legislation before us has the same drug benefit structure contained in S. 1 earlier this year.

The Congressional Budget Office has concluded that the competitive approach of this bipartisan drug benefit will be better at controlling drug costs than other proposals.

To suggest that no one support a Medicare drug benefit because it will lead to increased drug sales turns logic on its head.

If this were our basic principle, then we should not have food stamps, because that would lead to increased profits of grocery stores and farmers. What about housing subsidies? This might lead to profits by construction companies, utility companies and increased sales of lumber, bricks and nails! So, this is just an absurd issue and it is easy to see why.

I am here to tell you that this bill will strengthen and improve the Medicare program. The spending in this bipartisan prescription drug bill goes toward more improved health benefits for

America's seniors and the disabled. This is a good bill and I urge my colleagues to support it.

Mr. President, I give tribute to my dear friend C. Booth Wallentine, who, just days ago, began a very well earned retirement after serving for 41 years in the Farm Bureau. Thirty-one of those years he served as the executive director of the Utah Farm Bureau.

Booth is an institution in my State, and I have to say that when agriculture issues come up, my first question often is, ``What's Booth's take on this?'' Even on rare occasions when we have disagreed on an issue, I found it valuable to understand his perspective. As far as I am concerned, nobody knows agriculture in Utah like Booth Wallentine, and I dare say that no state Farm Bureau director knows Congress and the legislative process like Booth Wallentine, either.

This combination of expertise in the substance and in the process of agriculture policy-making has helped to set Booth apart as a highly effective advocate on behalf of Utah agriculture interests. It has also helped him to provide service in various other ways. He served as vice chairman of the Salt Lake Chamber of Commerce as well as chairman of the board of Utah State University. Remarkably, both institutions awarded him their respective distinguished service awards. He also served as the president of the Utah Council on Economic Education and chaired the Utah Farm Service Agency Committee on Risk Management. Somehow he found the time to help establish the National Mormon Pioneer Trail Foundation and was asked to chair the Department of the Interior's Historic Trail Commission.

But wait a minute, there's more. Booth Wallentine was Utah State University's very first inductee in their Agriculture Hall of Fame, he was named the Future Farmers of America Farm Leader of the Year, a Friend of the Cattlemen, a Friend of Utah Wool Growers, and he earned the Utah State Extension Leadership Award. Booth was also officially recognized by the Environmental Protection Agency for his environmental leadership in helping farmers to improve Utah's water quality.

I should point out that this is not a complete list, but it serves to make the point that Booth Wallentine is a great American. He has helped Utah in so many ways.

I know that I will miss him dearly, but I gain some comfort knowing that while he goes into retirement, we continue to benefit from the wisdom he shared with us and the legacy he has left. I thank my friend, Booth Wallentine for serving so long and so well. I pray that the Lord will bless him and his sweet wife, Raeda, in their retirement.

It is my understanding I have 7 minutes.

Mr. President, I have listened carefully to the debate on H.R. 1 during the last few days.

I regret to say I have heard many half-truths and misrepresentations about our bill from the opponents of the legislation.

This simply won't stand.

We're reaching the point where twisted facts and wrong-headed reasoning have been repeated so often that even those who know better are no longer jarred to hear it.

As one of the conference committee members who actually wrote this bill, I find this untenable, because the opposition is just scaring and confusing Medicare beneficiaries.

The last thing any of us want is for critical decisions to be made in a climate of fear or in a fog of uncertainty.

Yes, this legislation is not perfect. But it is good.

I'll tell you why.

First, and most important, this bill provides all beneficiaries-- seniors and the disabled--with voluntary prescription drug coverage for the first time in almost 40 years.

Coverage for their medications is something Utah beneficiaries have sought for decades.

Not a day goes by that I do not receive a letter from some part of Utah beseeching Congress to pass this bill.

Second, that coverage will be immediate. Seniors wherever they may live, from St. George to Logan, from Tooele to Vernal and down to Blanding and Monticello, will be able to use a new drug card to get an immediate discount on their medications.

Third, the program is voluntary. We all know--as do the bill's opponents--that beneficiaries will not be forced to join this new drug program. If they are happy with the status quo, then things can stay as they are. If they want to participate in the new program--it will be there for them.

Fourth, H.R. 1 provides choice in coverage. Beneficiaries may stay in traditional Medicare and elect to take a stand-alone drug plan if they want one. Or they may receive their coverage through a local health plan or the new regional PPO plans offered through the new Medicare Advantage program.

How often does a Federal program offer people the range of choices that this bill creates?

Fifth, this bill preserves retiree health coverage. Close to one- quarter of the spending in this bill, approximately $89 billion, is dedicated to protecting retiree health benefits.

For the first time--and none too soon--Medicare will provide funding as an incentive for employers to continue retiree health coverage. Under this bill, no beneficiary will be forced to drop retiree health coverage and participate in the new prescription drug program.

Sixth, the conference agreement is good for rural America, which has gotten the short shrift under Medicare for some time.

We want to ensure that Medicare beneficiaries will have access to quality health care, no matter where they live. We also want rural providers, providers in Moab and Panguitch, providers in Price and Manti, providers who dispense vital health services to beneficiaries, to be properly reimbursed for their services. This legislation accomplishes those important goals.

Seventh--as I intend to amplify later--this legislation improves the Drug Price Competition and Patent Term Restoration Act of 1984, better known as Hatch-Waxman. The conference agreement strengthens the 1984 law so it is easier for everyone, including seniors and the disabled, to have timely access to less expensive, generic drugs.

Eighth, the Medicare agreement includes an appropriate response to the question of reimporting prescription drugs into the United States.

While we include the provisions contained in the legislation approved by the Senate, this agreement also requires the HHS Secretary to conduct an extensive study that identifies the barriers to implementing a drug reimportation program.

Many of my constituents have written, asking why they cannot use the lower cost medications from Canada. The answer is easy: it is just irresponsible for Congress to jeopardize public safety by allowing the unchecked reimportation of drugs. That is why I adamantly opposed the House policy.

If we truly care about our seniors and other patients who depend upon prescription drugs, we should not expose them to what amounts to pharmaceutical Russian roulette.

And, finally, we have done all we can to craft a bill that is as cost-conscious as possible, a bill that the Congressional Budget Office has certified stays within our budget, and a bill that minimizes bureaucracy whenever possible.

We have worked hard to write a measure that relies whenever possible on the private sector, not on exploding the size of big, Washington government.

Before I conclude, I would like to take a minute to refute some of the points that have been raised by the opponents of this legislation.

Yesterday, I heard my good friend from Massachusetts talking about how he feels that the Senate is being stampeded with a bad bill.

It is hard to argue we are being stampeded, when we have worked on this issue for almost 15 years.

I also have heard our colleague say this legislation dismantles the Medicare program and that the HMOs are going to make out like bandits. Again, that is simply not true. Guess who was one of the people who helped to bring about HMOs. None other than the senior Senator from Massachusetts.

This agreement improves the Medicare program by giving beneficiaries voluntary prescription drug coverage for the first time in 40 years-- that is a reaffirmation of Medicare, not a weakening of it.

We also give beneficiaries expanded choices in their health care coverage; they may remain in traditional Medicare or in their retiree health care plan. Or they may receive their coverage through local or regional plans offered to them through the new Medicare Advantage program.

Contrary to what my friend from Massachusetts says, no one will be forced into an HMO, and I hope that the American people are not buying that kind of scare tactic.

The other fallacy that I heard during this debate was that the premium support demonstration project, which would be conducted in only six metropolitan areas, is going to disadvantage beneficiaries who remain in traditional Medicare. I have heard it said that those premiums could go up by 10, 15 or 20 percent, even though we who wrote the bill know that the Part B premiums for traditional Medicare could not rise by any more than 5 percent over the regular premium.

This rhetoric is absolutely outrageous. If you look on page 254 of the conference report, you will see that it is not true. The legislative language speaks for itself:

``The amount of the adjustment under this subsection for months in a year shall not exceed 5 percent of the amount of the monthly premium.''

In addition, if a beneficiary is under 150% of poverty, there is no impact on premiums at all.

And I am really getting tired of Speaker Newt Gingrich's words being continuously misconstrued.

He never said, as my colleagues on the other side of the aisle like to assert, that he wanted Medicare to wither on the vine. What he did say is that the agency that controlled Medicare, HCFA, should wither on the vine because it was filled with bureaucrats that were strangling the program. That is a far cry from what they have been representing-- person after person after person.

He was arguing against large bureaucracies and for seniors to have more control over their health care.

I have saved the best for last: the accusations and allegations made against

the AARP, which are truly amazing to me. It is truly amazing how last year they were considered to be the greatest organization on Earth by folks on the other side of the aisle, but this year they are dirtier than dirt. That is just not true.

It is ironic that some in this Chamber are criticizing the AARP for supporting a bill that will provide drug coverage to Medicare beneficiaries.

What a difference a year makes! Last year, the AARP could do nothing wrong in the eyes of today's opponents.

Yet, suddenly the AARP is either greedy or being taken in like a bunch of half-wits. So much for honest disagreement among friends!

What has changed? What does AARP know that the opponents of S. 1 do not?

AARP knows that this may very well be our last chance to enact a program adding prescription drug coverage to Medicare.

AARP knows, as we all do, that this is not a perfect bill. But AARP also knows that this bill lays a solid foundation which we can refine in the future.

In the eyes of this Senator, AARP has made a courageous decision by endorsing our proposal and I greatly appreciate their support

In conclusion, I want to commend the chairman of the Senate Finance Committee, Chuck Grassley and the ranking minority member, Max Baucus on a job well done.

I also want to compliment the Majority Leader, Dr. Bill Frist, on his leadership in shepherding this bill through the Senate.

Today we will make history.

We will break gridlock. We will act decisively to help the people of this great country.

The citizens of this great country are counting on us to get the job done.

So, let us clear away all the parliamentary hurdles and pass H.R. 1.

It is the right thing to do.

One last thing. I have heard some of my colleagues who are opposed to this bill raise the issue that Government can do nothing to help restrain the growth of drug costs or bring drug costs down. Again, this is a misrepresentation of what the conference agreement actually does.

The conference bill specifies the Government ``may not interfere with the negotiations between drug manufacturers and pharmacies and PPO sponsors and may not require a particular formulary or institute a price structure.''

Opponents claim that provision, which originated with Democratic proposals, by the way, is a concession to the pharmaceutical industry. That is why it is so phony to hear these arguments. They are plain wrong. The noninterference provision is at the heart of the bill's structure for delivering prescription drug coverage. It is a good deal for consumers rather than price fixing by the CMS bureaucracy, which I believe is opening the door for universal health care. It is a misrepresentation of the language in this provision to argue otherwise.

Mr. President, I have listened to my dear friend and colleague from Massachusetts. I guess he wants us to spend another 15 years either trying to reform Medicare, improve Medicare or pass another prescription drug benefit program through the Congress.

We are putting up $400 billion over 10 years, for both a Medicare drug benefit, something that seniors currently do not have today, and Medicare program improvements. Medicare beneficiaries have a choice of whether or not they want to participate in this program. They may remain in traditional Medicare. And, to be honest with you, those remaining in traditional Medicare who end up participating in the comparative cost adjustment demonstration project will not see their premiums increase more than 5 percent.

I only have a few minutes, so I would like to finish my comments.

According to my colleague from Massachusetts, we are dismantling Medicare. That could not be further from the truth.

How can we say that--when we are improving and strengthening Medicare, we are giving Medicare beneficiaries a choice of coverage, and we are giving them $400 billion to help with their prescription drug coverage and Medicare benefits. These new choices include the plans created under the new Medicare Advantage Program, the stand-alone drug plan, the regional plans, the local plans--how on Earth is that dismantling Medicare? And this coming from one in this body who was one of the major proponents of HMOs, to begin with? I might add, I have been here long enough to have remembered that.

Next is Social Security? Nobody in this body wants to hurt Social Security, and the Senator from Massachusetts knows that. Since when does the Washington Post have the inside track on the Senate Republican agenda? Give me a break.

I am going to finish in just a minute.

Again, I think my friend from Massachusetts, as great a Senator as he is, is trying to scare senior citizens. And, frankly, I think to say let's just not pass this bill and let's go back to the drawing boards is just plain wrong. The Members of the Medicare conference have been meeting for hours and hours, days, weeks, months to figure out how to provide Medicare beneficiaries with the best drug coverage possible. There are Members of Congress who have been working on this issue, trying to get a bill signed into law, for close to 15 years. And we are almost at the finish line. Yet my good colleague wants to go back to another 15 years of floundering around on this issue.

Now, if beneficiaries did not have choice in drug coverage, maybe my friend from Massachusetts would have a point. But seniors will have choice in coverage. Why would we go back to the drawing board, especially after all the time and effort we have put in this legislation? We have before us a bill that really does so much for seniors. The AARP is coming out strongly behind this bill, because they know full well that it is the last train out of the station, it is the only way we can go. I urge my colleagues to support this legislation so Medicare beneficiaries can finally have what they have wanted for close to 40 years--comprehensive prescription drug coverage.

I yield the floor.

Mr. President, I would like to take a few minutes to rebut some of the points raised by the Senator from Massachusetts.

First, he mentioned he is concerned about the cost of this bill. Let me remind my friend from Massachusetts that last year, he supported a bill that would have not only cost $800 billion, it would have sunsetted the Medicare prescription drug benefit. How would that have helped senior citizens and other Medicare beneficiaries, especially the disabled?

Our bill costs $400 billion over 10 years and it is a permanent benefit.

He also mentioned retiree health benefits and how individuals are going to lose their coverage as a result of the bill. Let me correct that statement for the record. First, $89 billion--yes, I said $89 billion--is devoted to employer subsidies in order to preserve retiree health benefits, so individuals will not lose their retiree health coverage. We have gone from a drop-out rate of 37 percent in H.R. 1, to a drop-out rate of under 20 percent. Again, my colleague is simply using scare tactics.

Mr. President, I rise to join my friend and distinguished colleague, Senator Leahy, in the introduction of the Preserving Independence of Financial Institution Examiners Act of 2003. This bill modifies two criminal statutes, sections 212 and 213 of title 18 of the United States Code, which impose criminal penalties on bank examiners who are offered, or who accept, a loan or gratuity from a financial institution they are examining. These revisions are needed to reflect the changes in our national banking system.

When originally enacted, the criminal statutes were designed to ensure that bank examiners were not subjected to undue and improper influences from the subject banks. With the increased consolidation and globalization of the banking industry, it is difficult in today's banking economy for examiners, particularly those who examine credit card banks, to obtain nationally available credit cards. The statutes, which were originally enacted in 1948, include no exception for routine, ordinary business transactions that were never intended to fall within the ambit of the statutes. The proposed legislation provides an exception to the statutes for bank examiners who hold everyday credit cards and residential home mortgage loans from the banks they are examining. The exceptions are narrow and the purposes of the statutes to prohibit such conflicts of interest will remain intact.

I want to thank Senator Leahy for his willingness to address this problem. I urge my colleagues to support this measure and quickly pass it.

Mr. President, I thank my colleague. I appreciated the remarks of the distinguished majority leader on the asbestos reform legislation. I certainly appreciate the kind remarks of the minority whip with regard to this. I think both of them spoke eloquently.

I rise today in support of the comments of the distinguished majority leader with respect to the asbestos legislation. This is an absolutely vital issue, and we have the opportunity

with S. 1125, the Fairness in Asbestos Injury Resolution Act, to correct what has been a gross injustice--both to asbestos victims and to our economy.

For more than 20 years now, compensation to legitimate victims of asbestos exposure has been delayed and diminished, while scores of companies with almost no connection to the problem have had to file for bankruptcy and hundreds of others live under the constant threat of insolvency from litigation. As a result tens of thousands of victims are not compensated and tens of thousands of workers have lost their jobs.

We've heard the statistics, but they bear repeating. The RAND Institute for Civil Justice tells us that, to date, approximately 70 companies have been forced into bankruptcy--at least three with operations in my home state of Utah.

The number of claims continues to rise as does the number of companies pulled into the web of this abusive litigation, often with little, if any, culpability. More than 600,000 people have filed claims, and more than 8,400 companies have been named as defendants in asbestos litigation.

This has become such a gravy train for some abusive trial lawyers that over 2,400 additional companies were named in the last year alone. RAND also notes that ``about two-thirds of the claims are now filed by the unimpaired, while in the past they were filed only by the manifestly ill.'' Former Attorney General Griffin Bell, amongst many others, has denounced this type of ``jackpot justice.''

To address this problem, I introduced a bipartisan bill with my friends Senators Ben Nelson, Mike DeWine, Zell Miller, George Voinovich, George Allen, Saxby Chambliss and Chuck Hagel. This bill creates a fund to provide fair compensation to victims, while reducing wasteful transaction costs dramatically. Let me first just dispel a few myths about this bill and set the record straight on a couple of issues. First, some Democrats and unions are saying there isn't enough money in the bill but the fact is that this bill gets more money to claimants on average than the current system does.

Let me explain how. There have been several studies of future asbestos-related costs under the current system, and the one which shows the highest reasonable estimate of prospective costs--the Milliman study-- would result in approximately $92 billion for victims, after attorney fees and expenses.

Under the FAIR Act, it is estimated that claimants will receive 90 percent or more of the total funds under the no-fault, non-adversarial system. This means the FAIR Act fund--which will have $114 billion under the agreement proposed by Senator Frist--will allow claimants to take home more than $100 billion. This is more total money than they are projected to receive under the current tort system.

But it is not just more money in the pockets of victims, it is faster and more certain compensation as well. We anticipate that claimants will not have to endure years of discovery battles and endless litigation before they get paid. Currently, some victims are dependent on the solvency of businesses to decide if they get paid or not. Under the FAIR Act, these victims will no longer have to go without payment. It is time to end the current system of Jackpot Justice where only some win and many lose.

Some have also argued that there aren't adequate safeguards to ensure solvency of the fund. Baloney. This fund--which is funded at the highest reasonable claim-rate scenario--is equipped with many mechanisms to ensure that the pay-in and pay-out requirements are met. This includes borrowing authority against future contributions.

It also includes guarantee surcharge and orphan share reserve accounts which set aside money to grow and pay for unexpected shortfalls. Another safeguard is the provision to empower the Attorney General to enforce contribution obligations and ensure collection. And beyond these, there is $10 billion in contingent funding as one more additional safety net. On top of all these safeguards, if the fund still becomes insolvent, claims would revert back to the tort system--a provision, by the way, which Democrats insisted be part of the bill.

Given that this bill is a clear net monetary gain for legitimate victims, and provides payments faster and with more certainty, I am at a loss as to why anyone could object to this bill. The unions that continue to oppose the bill risk throwing away the last, best chance to compensate fairly those who are truly sick and provide some protection to those whose jobs and pensions are at risk because of the asbestos litigation crisis.

Quite frankly, the only entity that stands to lose under this bill is the plaintiffs' bar which has siphoned off more than $20 billion of the costs incurred on this issue as of the end of last year. If the FAIR Act is passed, they will not be able to use unimpaired claims to continue to squeeze a projected $41 billion more for themselves from remotely-connected companies by abusing a broken system.

Fair is fair--I am all in support of compensating plaintiffs' attorneys for the value of their work. But when it diverts valuable resources away from sick victims, something is wrong with the system.

No one can accuse us of being unwilling to compromise in order to finally be able to address this overwhelming crisis being caused by asbestos litigation. When you look at where our bill started--and it was a good start--and where it is now, our efforts at compromise are blatantly clear.

In May we circulated a bipartisan draft measure and my staff met with Democrat staff to listen to their concerns and we incorporated several requests--even before introduction. We then embarked on several weeks of markup which saw 23 Democratic-initiated amendments adopted into this legislation. Now I didn't agree with all of them, but it can hardly be said that there hasn't been strong participation by Democrats on this bill. This chart behind me lists just some of the changes we made at the behest of Democrats; let me highlight a few of them for you.

We increased overall funding. Our bill started with a mandated $94 billion in contributions, which by most reasonable estimates should have provided sufficient resources for compensating legitimate claimants. In committee we increased base funding to $108 billion dollars. That additional $14 billion is not pocket change. We also took steps to ensure the enforcement of contributions as an added protection to the solvency of the fund.

We increased the number of claimants that would receive compensation by modifying the qualifying medical criteria and by including a provision to accommodate the unique circumstances of the victims in Libby, MT.

Moreover, we increased the amount of money that will go to claimants. Even though our original claim values would have on average provided more money to legitimate claimants, we increased the values even more. And we removed most collateral source offsets to ensure that more of the award goes directly to the claimant.

These changes listed on the chart behind me do not even include other changes that we have offered since the bill was reported out of committee to even further accommodate their requests, such as an additional $6 billion increase in overall funding and significant increases in claims values in many categories. And we also offered a more flexible borrowing authority as another safeguard for solvency.

Now I understand that some want to make further changes, including streamlining the claims process even more, and I have said I'm willing to look at such proposals. But this and other complaints have been raised without the follow up of a concrete, alternative proposal. I hope that before this issue comes up in March as the Majority Leader indicated that we will resolve the outstanding issues.

We cannot delay any longer--we need to ensure that the truly sick get paid, while providing stability to our economy by stemming the rampant litigation that has resulted in a tidal wave of bankruptcies, endangering jobs and pensions. This crisis reaches far and wide--and it hurts everyone.

On Monday, this body will pass an historic bipartisan Medicare bill that will provide our seniors with drug benefits.

We can and should use this spirit of bipartisanship to come together on the asbestos issue.

I thank Senator Frist for his leadership on Medicare and the constructive role he is playing on asbestos. Working together I am confident that Senators Daschle, Specter, Leahy and Dodd will all join together when we bring the asbestos bill to the floor in March.

Mr. President, I have sat here for hours now and listened to some of the comments by our colleagues on the other side. They must not have paid any attention to what this bill is all about or any attention to what the conferees, who worked day and night, did to put this bill together in a bipartisan way. They must not have paid any attention to the words in the bill or paid any attention to their respective caucus meetings where we discussed the aspects of it.

When a Senator said this bill is being ramrodded through, I want to make it clear that we have been trying to improve Medicare for 40 years, especially in the last 10, 15 years. That is hardly ramrodding it through.

This is it. This is the last chance to have prescription drug benefits for our seniors. It is amazing to me how many on the other side just want to say no to anything: No to judges. No to prescription drug benefits unless they are way out of sight as far as expenses go. No to any possible private sector improvements that might possibly work. No to all the ideas that Democrats and Republicans have worked on, 7 o'clock in the morning meetings, 3 o'clock to midnight, in the afternoons, day after day after day, week after week. We were not doing that for our fun. We were not doing that for political reasons. We were not doing that to try to hurt one side or the other or to make political points on one side or the other.

We were doing it the best we could to try to come up with a bill that would improve Medicare and get prescription drugs to our seniors who need them, who do not have drug coverage right now, or who do not have access to drugs because they cannot afford to pay for them.

We take care of beneficiaries from 150 percent of poverty or less. If I had my way, the whole $400 billion would have gone to those at 200 percent or 250 percent or less and we would not have made any benefits for people such as Bill Gates and Warren Buffett, billionaires who can afford their own prescription drugs. But no, there is a desire by some on the other side to have what is called ``universal'' health care. That is, the Federal Government controls everything, pays for everything, and we have socialized medicine. Not many people who think it through want to go to that extent. That is why they are not getting their way so they will continue to moan and groan. One of the most offensive things of all is the people whom AARP basically have supported through all these year, the Democrats, and some of these Democrats condemning AARP for supporting this legislation.

I have seen Democrats stand on the floor and put the AARP's number up and tell people to call AARP and tell AARP they are wrong.

We are here to make decisions as to what should be done. The decisions cannot always be no, no, no.

I have to admit I was irritated with my party in times past because we seemed to say no to everything the Democrats wanted. I will state what is really behind this. Many of our colleagues who are against this on the other side just plain do not want President George Bush to get any credit for this Medicare reform bill. They cannot tolerate that this President has called for this, has fought for this, has provided a climate for this, has a bureaucracy working for this, has his staff working for this, has helped us every step of the way. Health and Human Services Secretary Thompson, as tough as it was to sit in those meetings, said virtually every one of these meetings was tough on him. There were a lot of tough discussions.

They are so afraid President Bush might get some credit for enacting a prescription drug law. President Bush will probably be the last one to take credit for it, although he deserves credit for it because he has been a leader who has helped to bring this about. And he would deserve the credit. But so would every Democrat who votes for this. Above all, Senators Baucus and Breaux, who sat through every one of those meetings. They deserve a lot of credit for not letting politics distort their worldview of what should be done and for standing up for this bill. It is one of the reasons the AARP is for this bill.

Another reason happens to be our two leaders: Speaker of the House Denny Hastert, and of course our majority leader in the Senate, Dr. Frist, who has worked with these problems his whole professional lifetime. He has wanted to get this done as much as, if not more than, anyone else. And Senator Grassley worked day and night on this with his staff. We could not have a better person.

Then we have cheap politics because they know former House Speaker Newt Gingrich has not always been the most followed person in this world even though he is one of the brightest people with one of the brightest political minds in America today. So what do they do? They distort what former House Speaker Newt Gingrich said--not only distort it, they do it downright offensively. I am frustrated by the continued references to the alleged comments by the former Speaker of the House about the ``Medicare Program,'' and those who insist that the former Speaker wanted Medicare to wither on the vine. We have heard it all day long by these people who are against everything. They are sadly mistaken. They are misrepresenting his remarks.

What the former Speaker said was that the agency that controlled Medicare, HCFA, the Health Care Financing Administration, which has evolved into CMS, said that HCFA should wither on the vine because that bureaucracy was so filled with command-and-control bureaucrats who were more concerned about redtape than seniors' health.

That is a far cry from condemning Medicare, which is the way they would present it. I personally resent that kind of distortion of what the former Speaker of the House had to say. Gingrich believed these bureaucracies were strangling Medicare. If anything, he was standing up for Medicare. He was arguing against large bureaucracies and for seniors to have more individual control over their health care dollars.

So do not believe this gibberish coming from some on the other side. That is exactly what it is.

I have heard Democrats who were opposed to everything with regard to Medicare, unless it is an $800 billion to $1 trillion program, and even then would be opposed to some of the approaches here.

They argue that 25 percent of seniors will be worse off than they are today because of this bill. That is pure, unmitigated bunk, and they know it. It is not true.

First of all, we are adding $400 billion to the Medicare Program in new spending for drug benefits and Medicare improvements--$400 billion. That is not chickenfeed. So how can anybody say they are going to be worse off?

Secondly, we take care of those who are in lower income brackets and those who have high drug costs. That is what this bill ought to do, and it does, and they are better off.

Very important to me, to Senator Grassley, to Senator Baucus, and virtually all of us who have rural States, is that we improve access to quality care in rural areas--something that just has not happened under the old Medicare system, under traditional Medicare. We improved it. This bill does a lot towards helping those in rural America who have been shortchanged for years.

I do not see how anybody standing up from a rural State, with lots of farmers, can have the gall to come on this floor and say they are going to be worse off with this bill when we put very strong language in with regard to rural health care. Yet we have had some Senators from the other side doing that.

Unlike the 1988 catastrophic bill, which I virtually argued against at the time--it was a mandatory bill--but unlike that bill, this is a bill where you have a choice of whether you go into this program or not. You do not have to do it. You can stay right where you are in traditional Medicare if that is what you want. I do not think most people are going to do that, but who knows? But they have a right to do so. It is not like the 1988 catastrophic bill which was mandatory. And when the people found out they had to pay for it, yes, they rebelled because they did not want us telling them they had to pay for the benefit. Today, we are not telling them they have to participate. In fact, the two bills are quite different.

The Government is going to pay 75 percent of the cost of drugs for Medicare beneficiaries over 150 percent of poverty. Now, tell me that is not better than the current system.

The Democrats do not seem to understand the fact that a lot of corporations are dropping health care coverage because they cannot afford it anymore or they do not want to pay for it anymore.

I will never forget, I had a conversation with the head of IBM a few years back. He said: We are paying $7,000 per employee for health care. If it goes up any more, we are just going to turn around and give them the $7,000 and say, go get your own health care. He said: We just can't afford to keep going in this direction.

Well, before this bill, it was estimated that the corporations were going to drop the health care of 37 percent of retirees. Now it is estimated that the drop out number will be below 20 percent, probably closer to 15 percent. We have made some strides in trying to solve that problem.

This bill contains Hatch-Waxman reforms. For those who do not understand this, let me explain it as the author of the Hatch-Waxman bill in 1984.

Hatch-Waxman created the modern generic drug industry that is in competition with the pioneering companies and has brought drug prices down $10 billion in consumer savings every year since 1984. It is called, even by my friends on the other side, one of the greatest pieces of consumer legislation in the last century, and rightly so, because it has saved billions and billions of dollars for consumers.

But there was a gaming of Hatch-Waxman by some companies, and we have corrected that in this bill, which is a pretty important thing. These reforms will prevent gaming of the system, and they will provide seniors with less expensive generic drugs more quickly.

I get so tired of the demagoguery against the pioneering companies; that is, the PhRMA companies; that is, the large pharmaceutical companies. The generic companies know that if the large pharmaceutical companies do not spend their $30 to $35 billion every year in research and development, there will not be any drugs for them to take off into generic form. If these large companies spend that kind of money, then they have to find a way of recouping that money. Because of our current FDA system, it takes up to 15 years of patent life.

If you develop a gizmo, you have 20 years of patent life, or what you call market exclusivity, to sell your gizmo. In the case of prescription drugs, you might only have 5 years to recoup the moneys you have put in. And just for people's understanding, it takes up to 6,000 scientific misses, in other words, experiments--up to 6,000 of them--to arrive at a marketable drug, at a cost of around $1 billion per drug.

You wonder why companies have to charge as much as they do to get their money back? If they do not get their money back, they cannot conduct more research and development on future pharmaceutical products which are really saving our seniors and causing them to be able to live longer lives today.

I will talk a little bit more about drug reimportation in a few minutes. But in all honesty, that is an overblown, demagogued position, too. Our pharmaceutical industry in this country is one of our great industries. It is one of the reasons we have a balance of trade surplus. The pharmaceutical industry and the entertainment industry are about the only two that provide balance of trade surpluses.

What I hear from the other side that we have to have price controls, which is what Canada has; it is important to remember that Canada no longer has a pharmaceutical industry. The reason is that you cannot afford to do what it takes to get these drugs developed when you have price controls. Now, these are things that just are demagogued here on the floor, and I am personally getting tired of it.

There is so much I would like to say that would refute the demagoguery I have heard from some on the other side. Let me just take a second on AARP because it is amazing to me. The AARP has basically sided with the Democratic Party on almost everything with regard to seniors, and with the more liberal Republicans. They have been involved in this intimately for years. And here we have Democrats trashing the organization that has been one of their mainstays of support because all of a sudden the AARP is thinking for itself and doing what is right for seniors, and not keeping seniors under the thumb of Government regulation. So AARP has to be trashed here on the floor of the Senate by some of our friends on the other side.

I find it ironic that my friends on the other side of the aisle are criticizing the AARP for supporting legislation that will provide Americans access to drug coverage through Medicare. It is the first time this is going to happen, and they are trashing AARP?

What a difference a year makes. Last year, AARP could do no wrong as far as the Democrats were concerned. This year, it seems the AARP can do nothing right. That is because the more liberal Democrats, who are opposed to this bill because it is not socialized medicine, are up in arms that the AARP has finally decided to do what really is a bipartisan approach.

AARP made a courageous decision by endorsing our drug plan, a bill that I predict will soon be signed into law. And maybe my friends are just upset because they are on the losing side on this issue for a change, and they just do not want President Bush to get any credit for it.

Well, I also want to stress that the so-called slush fund I have heard mentioned on the other side, that my friend from Iowa raised, is no slush fund at all. This is a stabilization fund that is important for rural States such as Utah and Iowa. It is crucial to our States. Utah did not benefit from Medicare+Choice because it just did not work in my state. Health plans told me that the payments were too low.

So this stabilization fund provides assistance to those States, such as Iowa and Utah, that may not have regional PPOs, preferred provider organizations, or local plans that provide coverage they would offer to these beneficiaries living in rural areas.

Of course, look at what happened to Medicare+Choice. In Utah, the Medicare+Choice plans left the State, leaving my beneficiaries with nothing because Medicare+Choice plans could not survive in rural Utah. This bill will help to solve that problem. The stability fund will be used to encourage plans to enter rural States such as Utah and Iowa and stay there once and for all. It is not a slush fund.

This is a fund designed to help give rural beneficiaries choice and coverage through the HMOs, PPOs, and stand-alone drug plans. It helps seniors in rural areas. I find it disconcerting that someone from Iowa would criticize that aspect of this program. That shows he has not read the bill, does not understand the bill, has not listened to Senator Grassley, who has read the bill, does understand it, and helped to implement it, and who is probably rural America's strongest advocate in the Congress. This is no exception.

Let me tell you what this legislation does for my folks in Utah. I think you can extrapolate this into every State in the Union, but let me talk about my State because I want my folks in Utah to realize this is a good bill.

The bipartisan agreement provides all of my 219,973 beneficiaries in Utah with access to a Medicare prescription drug benefit for the first time in the history of the Medicare Program, beginning in January of 2006. Beginning in 2006, the bipartisan agreement will give 55,538 Medicare beneficiaries in Utah access to drug coverage they would not otherwise have and will improve coverage for many more.

Within 6 months after this bill is signed, Utah residents will be eligible for Medicare approved prescription drug discount cards which will provide them with savings of between 10 and 25 percent off the retail price of prescription drugs, of most drugs. That is something they do not have now but they will have.

Beneficiaries with incomes of less than $12,123 or $16,362 for couples who lack prescription drug coverage, including drug coverage under Medicaid, will get up to $600 in annual assistance to help them afford their medicines along with a discount card. That is a total of $53,619,525 in additional help for 44,638 Utah residents in the years 2004 and 2005.

Mr. President, beginning in 2006, all 219,973 Medicare beneficiaries living in

Utah will be eligible to get prescription drug coverage through a Medicare approved plan in exchange for a monthly premium of approximately $35. Seniors who are now paying the full retail price for prescription drugs will be able to cut drug costs roughly in half. In many cases, they will save more than 50 percent of what they pay for prescription medicines, and those at less than 150 percent of poverty basically will have their drugs for free.

Mr. President, 63,560 beneficiaries in Utah, who have limited savings and low incomes, generally below $12,123 for individuals and $16,232 for couples, will qualify for even more generous coverage, as I have said. They will pay no premium for prescription drug coverage, and they will be responsible only for a nominal copayment, no more than $2 for each generic drug or $5 for brand name drugs. Now, 17,613 additional low-income beneficiaries in Utah, with limited savings and incomes below $13,470 for individuals and $18,180 for couples, will qualify for reduced premiums, lower deductible, and coinsurance, and no gaps in coverage.

Additionally, Medicare, instead of Medicaid, will now assume the prescription drug costs of 17,739 Utah beneficiaries who are eligible for both Medicare and Medicaid. This will save Utah $51 million over 8 years on prescription drug coverage for its Medicaid population.

This is a bill that will help every State. I cite Utah just to show that in a State the size of mine, which is smaller in population than many other States but fairly substantial, there are substantial benefits that will come from this bill.

I want to make it clear that this is the last train out of town. We have been trying to do this for years and years. I listened to at least four of my colleagues on the other side who, in my opinion, were demagoguing this issue all day long. Frankly, they are wrong in most of their assertions, and they act as if all we have to do is take this back to committee and work it through again. If people had sat through those meetings we held in the conference committee, they would realize we went through every word, every aspect of this legislation. We had a heck of a time putting together a total bipartisan package such as this as it was. If you look at it, it barely passed the House--but it did pass the House. I hope it will pass the Senate because our seniors will be better off with the choices this bill gives them than with current law.

Yes, I wish we could have done more to reform Medicare; I wish we could have done more to put more private sector capability in this bill. I think over the long run that would really pay off. I wish we could have done more in a wide variety of areas that would have cost a lot more money. But I have to say, under the circumstances, the conference committee members really worked hard, and I think we did a good job.

So I rise to express my strong support for the final conference agreement on H.R. 1, the Medicare Prescription Drug Improvement and Modernization Act. Over the years, countless Medicare beneficiaries in Utah have written to me to express their desperation over the fact that Congress has not added a prescription drug benefit to the Medicare Program. Time after time, session after session, in Congress after Congress, we have tried to answer their pleas. Fifteen years ago, we almost made it. The plan was so flawed that it had to be repealed. Last year, I thought we might make it with the tripartisan initiative. I was one of the five tripartisan Senators, as was Senator Grassley who is sitting in the chair now, and Senators Snowe, Jeffords, and Breaux. The five of us have come up short each and every time we have tried--except this year. I think if we had not had Presidential support this year, we probably would have come up short again.

We cannot afford to fail America's seniors. We cannot afford to fail America's disabled. I am dismayed to hear many colleagues preparing for us to fail again. Not if this Senator can help it. To me, it is unconscionable to let this opportunity pass us by out of a concern that this is not a perfect bill. I spent years working on this issue. Unlike some on the other side, who have been complaining about the issue, I have worked on every health care program in the last 27 years, and a number of them have my name on them. I believe I know the issues as well as anybody in this body. I worked hard on the conference committee as well.

Let me tell you, in all the experience of 27 years, I can tell you something I know is categorically true: We cannot have a perfect bill.

The intersection of Medicare, Medicaid, and responsible public policy is about the most complex pathway Congress has ever negotiated. On the one hand, we want to provide as many seniors and disabled with as comprehensive and affordable coverage as possible. On the other hand, we want to minimize Government and its attendant bureaucracy and cost. The two are in inherent conflict. So we do the best we can--and we did.

Since Congress first enacted Medicare nearly 40 years ago, we have seen miraculous breakthroughs in medicines that have allowed for diseases, conditions, to be treated by innovative prescription drugs. As seniors and the disabled have gained access to many treatments, many are faced with the choice of splitting pills or missing meals in order to afford their vital prescription drugs.

This is simply unconscionable. Providing access to these vital treatments is the right thing to do for our seniors and the right thing to do for our children. It will make our society more healthy, and it will save countless medical expenses. Seniors will live longer, as they are doing now, because of these inroads we have made.

Is there anyone who doubts that greater access to preventive medicine will save our Medicare system in the long run perhaps by tens of billions of dollars?

My constituents have been waiting for close to 40 years for this day to come. The time is here; the time is now. We are about to pass historic legislation that will make the most significant changes to the Medicare Program since it was created in 1965.

I say to my colleagues, Monday will be a momentous day in the Senate, and I hope we will invoke cloture so we can proceed with this bill. If we invoke cloture, we will pass this bill and millions and millions--40 million--of our senior citizens in this country will benefit. The whole country will benefit. Medicare beneficiaries will finally be offered a prescription drug benefit plan.

Medicare will offer beneficiaries more choice in coverage, and Medicare's fiscal solvency will be preserved for our children and grandchildren.

This bill has countless extra benefits. We have made improvements in the way health care is delivered to rural America, as I mentioned. Beneficiaries, like so many in the State of Utah, will receive quality health care. Providers in these areas will be reimbursed appropriately and have incentives to give good care.

Overall, we cannot escape the conclusion that this is a good bill. Whenever I go back home to Utah, the Medicare Program is the one topic that comes up in almost every conversation I have with constituents. No matter where I go--Salt Lake City, St. George, Beaver, Ogden, Cedar City, you name it, from the north to south, from east to west, the question is still the same: When will drugs be covered by Medicare? I have looked forward to this day for a long time--the day when I will be able to answer: Now.

I would like to read a letter, one of many I have received, from a different kind of constituent. For the past several years, Medicare providers, especially those in rural Utah, have complained about their insufficient Medicare reimbursement in Utah. As a result, many have threatened to leave the State if Medicare payments are not increased. Let me give you a quote from Dr. Beth Hanlon, a Utah physician, who is complaining about unfair reimbursement rates. Here is what she had to say:

My patient population is 30 to 40 percent Medicare. I

cannot continue to see our senior patients if rates drop

further. My overhead costs continue to increase; I cannot

provide the same services I did a year ago because of lower

reimbursements. I will have to refer patients to consultants

and the emergency room for problems I could previously have

managed in my office. This is so distressing, as our

population ages and we see more doctors planning retirement.

Dr. Hanlon, we have good news for you. We took your concerns seriously, and this bill takes the necessary steps to increase your Medicare reimbursement rates.

Let me talk a little bit about the process and how we got to this historic place in the annals of the Senate. As I said, I was privileged to serve as a member of the House-Senate Medicare conference committee. I served on many conferences during my 27 years in the Senate, but this was probably the most complex and technical conference I have ever encountered, and it was a difficult conference to be on.

Every Senate and House conferee--especially conference Chairman Bill Thomas, chairman of the Ways and Means Committee, and Cochairman Billy Tauzin of the Energy and Commerce Committee, and conference Vice Chairman Chuck Grassley, chairman of the Finance Committee--did a great job, a fine job of guiding members to this final agreement. It was no easy task, and it took several months and many long hours to complete our work.

Other conference members made significant contributions to this historic conference report, and I would like to take the opportunity to recognize all of these members for their diligence and commitment to the process.

They certainly include Senate majority leader, Bill Frist; Senate minority leader, Tom Daschle; Senate Finance Committee ranking member, Max Baucus; Senator Don Nickles; Senator Jay Rockefeller; Senator Jon Kyl; and Senator John Breaux; House majority leader, Tom DeLay; the Speaker of the House, Denny Hastert; Ways and Means Committee ranking member, Charlie Rangel; Energy and Commerce Committee ranking member, John Dingell; Ways and Means Health Subcommittee chairwoman, Nancy Johnson; and Energy and Commerce Health Subcommittee chairman, Mike Bilirakis.

These are all the people who were concerned about this bill. Most of them worked to try to work out the differences between the House and Senate bills. Some of them did not, and some of them are complaining to this day.

I also wish to take this opportunity to recognize the staff who worked literally around the clock on this conference agreement for several months. They are: Dr. Mark Carlson, who was my legislative fellow this year; Colin Rosky; Leah Kegler; Jennifer Bell; Ted Totman; Alicia Ziemiecki; Liz Fowler; Bill Dauster; Russ Sullivan; Judy Miller; Jon Blum; Pat Bousliman; Andy Cohen; Danial Stein; Diana Birkett; Joelle Oishi; Jenny Wolff; Allison Giles; Julie Hasler; Patrick Morrisey; Chuck Clapton; Patrick Rowan; Jeremy Allen; Dean Rosen; Liz Scanlon; Eric Ueland; Sarah Walter; Michelle Easton; Paige Jennings; Lauren Fuller; Stacey Hughes; Don Dempsey; Diane Major; Lisa Wolski; Jane Lowenstein; Kate Leone; Susan Christianson; Bridgett Taylor; Amy Hall; John Ford; Cybele Bjorklund; and Terry Shaw.

Mr. President, I would like, though, to recognize the hard work of our Senate Finance Committee staff, especially Linda Fishman, Mark Hayes, Liz Fowler, and Jon Blum; and the staff of the Ways and Means Committee, John McManus, Deb Williams, Madeleine Smith, and Joel White; and staff of the House Energy and Commerce Committee, especially Patrick Morrissey and Chuck Clapton.

I also wish to acknowledge the work of my own staff: Pattie DeLoatche, Trish Knight, Bruce Artim, and others who worked very hard in this area.

I wish to acknowledge the work of the Senate and House legislative counsel staff, Jim Scott, John Goetcheus, Ruth Ernst, Ed Grossman, Pierre Poisson, and Pete Goodloe.

They have been the unsung heroes in this process and have given up significant time with their family in order to draft this legislation.

Another organization that deserves special recognition is the Congressional Budget Office. The staff of Steve Lieberman worked tirelessly for us, and it was a continuous process.

Finally, the Department of Health and Human Services, especially the Centers for Medicare & Medicaid Services staff, led by Administrator Tom Scully and Rob Foreman, worked around the clock to provide us with detailed information on questions we had about the Medicare legislation.

I thank all of these fine people for a job well done.

I have been involved in this issue for more than a decade, as I mentioned--actually for most of my Senate career. I worked closely with my Finance Committee colleagues to get this bill through the Finance Committee and the Senate earlier this year. I was also one of the authors of the Senate tripartisan Medicare bill which was considered last Congress and shot down because of nothing more than politics, something that appears to be rearing its ugly head right now.

In addition, I was lead sponsor with our colleague, Senator Bill Roth, of the legislation establishing the Bipartisan Medicare Commission, which was included in the Balanced Budget Act of 1997.

Both the Medicare tripartisan bill and the Bipartisan Medicare Commission, which was chaired by my friend and colleague, John Breaux, laid the groundwork for the agreement we are currently considering.

We have learned from those efforts, and that has only improved the legislative effort that is before us today. That is why this bill presents the best opportunity that we will ever have to provide our seniors with the drugs they need so desperately.

Of course, the bill is not perfect. No compromise ever is to any one person. But after all these years, considering all the policy differences and all the differing views on entitlement programs and how a drug benefits should be delivered, we now have a bill that can pass.

With all of those differences, we finally have a bill that represents the best possible compromise. There will most certainly never be another opportunity like we have when we vote this Monday.

There is a lot of misunderstanding about what is in this bill. There is a lot of misinformation. I have mentioned some of it in my earlier remarks, but I would like to take a few more moments to clear up some of this.

First, I would like to explain one of the most important components of this legislation to my colleagues at this time, which is the drug benefit. Many Utahns are under the mistaken impression that they will be forced to participate in this new drug program, and that is simply not true. So I want all of you out there who are listening and watching and those who will read comments in the papers to note these comments by some of my colleagues, such as ``you don't have any choice,'' are wrong. You have a choice whether you want to be in this program or not. No one will be forced into the new drug plan. No one is going to be forced into an HMO. No one will be forced to leave traditional Medicare on which they have come to depend.

I simply cannot stress enough that this is a voluntary benefit. If Medicare beneficiaries do not want drug coverage, they do not have to participate. I hope that point is clear to everyone across the country listening to this debate, especially senior citizens.

Second, in one word, this bill provides choice. Seniors will be able to choose the drug benefit that best suits their needs rather than be forced into a one-size-fits-all Government handout.

(Mr. ALLARD assumed the Chair.)

Everyone will be offered a Medicare-endorsed drug discount card in April 2004. This will cost no more than $30 per year.

These drug discount cards will immediately provide our seniors with drug savings ranging from 10 to 25 percent. Right off, that's a benefit you don't have now.

In addition, this is a fair bill and a fair provision.

We have targeted the lion's share of this benefit to those seniors who have the greatest need. Those under 135 percent of the federal poverty level will receive $600 per year to buy their prescription drugs and will not be required to pay enrollment fees. That's a total of $53.6 million in additional help for 45,000 Utah residents in 2004 and 2005.These low-income beneficiaries would only be required to pay coinsurance between 5 and 10 percent for each prescription drug. That is a tremendous change from today.

The prescription drug card program concludes when the larger benefit kicks in on January 1, 2006.

Beginning in 2006, 220,000 Medicare beneficiaries will be offered access to the new standard prescription drug program. Standard coverage includes a $35 monthly premium, a $250 annual deductible, beneficiary coinsurance of 25 percent up to $2,250, and protections against high drug cost once out-of-pocket spending reaches $3,600.

While individual drug plan sponsors may change some of the specifications, every beneficiary who participates will be guaranteed a drug benefit that is at least equal in value to the standard benefit.

Those wishing to remain in traditional Medicare will have access to a stand-alone prescription drug plan.

Beneficiaries who want private, integrated health coverage may receive their drug benefits through local or regional Medicare Advantage plans. No one--not one senior or person with a disability-- would be forced to give up the coverage that they receive from traditional Medicare. And this bill will provide 56,000 Medicare beneficiaries in Utah with access to drug coverage that they would not otherwise have.

This bill also has additional coverage for 63,000 Utahns with low- incomes.

For the dual-eligibles 18,000 in Utah--who are below 100 percent of the Federal poverty level, there would be no monthly premium, annual deductible, or gap in coverage. These individuals will merely have copayments of $1 for generic drugs and $3 for brand name drugs. Once the catastrophic limit is reached, there would be no beneficiary coinsurance for these individuals.

But there's even more help for our low-income beneficiaries. Those below 135 percent of poverty, there will be no monthly premium, annual deductible or gap in coverage. These individuals would have copayments of $2 for generic drugs and $5 for brand name drugs. Once the catastrophic limit is reached, there will be no beneficiary coinsurance for these individuals.

For those below 150 percent of poverty, there will be a sliding scale for monthly premiums, a $50 annual deductible, and up to 15 percent beneficiary coinsurance on the out-of-pocket spending. Once the catastrophic spending limit is reached, there will be beneficiary copayments of $2 for generic drugs and $5 for brand name drugs.

Let me illustrate how this would work.

Evelyn, a widow from Sandy, Utah makes $35,000 annually. She has diabetes, high blood pressure and arthritis and her annual drug expenditures are close to $5000. Evelyn decides to join the Medicare prescription drug plan. It's her choice.

Under the bipartisan Medicare agreement, her out-of-pocket spending on drugs will be reduced from $4800 per year to approximately $2400 cutting her prescription drug expenditures significantly. Factoring in her monthly premiums, she will save almost $2000 per year.

I continue to hear arguments on the floor about seniors being in worse shape if this bill becomes law.

Would Evelyn think saving $2000 puts her in worse shape? Not on your life.

This conference agreement provides additional assistance to the poorest and the sickest beneficiaries--that has always been my goal--to provide assistance to those beneficiaries who need the most help.

Who can argue against that?

It gives beneficiaries something that they have wanted for 40 years-- prescription drug coverage--and it is strictly voluntary.

H.R. 1 also improves the traditional Medicare program by enhancing preventive services offered to beneficiaries.

The conference agreement includes a Welcome to Medicare preventive physical examination, cardiovascular and diabetes screening, and improved payments for mammography.

The new benefits will be used to screen Medicare beneficiaries for many illnesses, and in most cases, if these illnesses are caught early they may be treated. Conditions like diabetes, heart disease and asthma will be treated far more effectively due to this one-time physical examination. Would patients think they are worse off because their conditions are detected earlier and treated more effectively? Not on your life.

This conference agreement also establishes Health Savings Accounts, better known as HSAs. HSAs are tax-advantaged savings accounts which may be used to pay for medical expenses, and they have worked in numerous other forms in the private sector. They are open to everyone with a high deductible health insurance plan; however, the annual deductible must be at least $1,000 for individual coverage and at least $2,000 for family coverage, and the out-of-pocket expense limit must be no more than $5,000 for individual coverage and $10,000 for family coverage.

Employee HSA contributions are not included in the individual's taxable income. In addition, contributions by an individual are tax deductible. Also, the accounts are allowed to grow tax free and there is no tax on withdrawals for qualified medical expenses. Boy, does that make sense. But that is sticking in the craw of a number of those who want Government to pay for everything and don't want people to have to save for their own health care. I mean, that is in my view.

HSAs are portable, like an individual retirement account (IRA), the HSA is owned by the individual, not the employer. If the individual changes jobs, the HSA travels with them. In addition, individuals over age 55 may make extra contributions to their accounts and still enjoy the same tax advantages. In 2004, an additional $500 can be added to the HSA. By 2009, an additional $1,000 can be added to the HSA.

The inclusion of these new accounts is a significant part of the agreement that made this conference report possible. Yet some on the other side, because it is giving people a choice to save on their own, tax free, and pay for their own health care tax free, don't want this. It is easy to see why, if what you want is socialized medicine. The inclusion of these new accounts is a significant part of the agreement that made this conference report possible. Allowing individuals to take charge of their own savings for future health care expenses is an important and necessary change in the direction of our health care policy, and is one I support strongly.

In my opinion, the conference agreement made great strides in perfecting the Senate-passed language sponsored by Senators Gregg, Schumer, and Kennedy pertaining to the Drug Price Competition and Patent Term Restoration Act of 1984, better known as the Hatch-Waxman Act.

The intent of the 1994 law is to provide incentives to develop valuable new drug treatments through patent and exclusivity protection, and also to facilitate access to generic versions of the drug after the innovator's patent or exclusivity expires. The CBO estimated that the Hatch-Waxman Act saves consumers $8 billion to $10 billion each year. I was pleased to be the prime sponsor and to work out every word in that Act.

In recent years, however, access to generic drugs has sometimes been delayed by litigation. The Judiciary Committee, which I chair, highlighted these problems in a hearing held in May of 2001 and two hearings this year.

The HELP Committee reported legislation on these matters both last year and this year. The Senate adopted these amendments by wide margins both last year and this year.

Although I opposed the specific provisions in these bills, I recognize the sustained efforts of Senators McCain, Schumer, Kennedy, Collins, Edwards, and Frist. I want to especially commend Senator Gregg for his leadership in bringing this year's vehicle more in line with the policies that I have long advocated.

I also want to commend the leadership of President Bush who took regulatory action earlier this year to close a significant loophole in the 1984 law, which will save all Americans an estimated $35 billion over 10 years. Secretary Thompson and the Commissioner of Food and Drugs, Dr. Mark McClennan, deserve a lot of credit for completing this important rulemaking in less than one year. The expert advice given by the Chief Counsel for Food and Drugs, Dan Troy, must also be acknowldged.

Medicare legislation that passed the House and Senate earlier this year included the codification of the new FDA rule modifying the 30- month-stay provisions of Hatch-Waxman. Enactment of these provisions as part of the bipartisan agreement will lower prescription drug costs for millions of Americans by improving access to generic drugs, which are safe and effective and can be much less costly alternatives to brand- name prescription drugs.

A key component of the bipartisan agreement codify the recent regulation that limits drug manufacturers to one and only one 30-month automatic stay

in patent infringement litigation involving a generic drug application. This is the policy that I advocated in May 2002 testimony before the HELP Committee and on the Senate floor during the debate of 2002.

Although the McCain-Schumer bill in the 107th Congress, S. 812, contained a very different provision with respect to the 30-month stay, in time the wisdom of my position on the 30-month stay took hold.

Last July, the Federal Trade Commission issued a report that recommended the policy I advocated and became a central feature of the FDA rule and the legislation contained in the conference report.

I want to commend the sustained effort and considerable expertise of FTC Chairman Muris in this area.

As well, I would be remiss not to single out such dedicated and thoughtful public servants as Mike Wroblenski at FTC and Jarilyn DuPont, Amit Sachdev, and Liz Dickinson at FDA, and many others.

One of the key provisions of the Greater Access to Affordable Pharmaceutical Act amendments are those pertaining to declaratory judgments. It was this provision that was discussed at our two most recent Judiciary Committee hearings on this legislation in June and August of this year. The Department of Justice, ably represented by a fellow Utahn, Deputy Assistant Attorney General Sheldon Bradshaw, understandably took the position that the Senate declaratory judgment provision was unconstitutional.

I am pleased that the conferees fixed the constitutional defect in the Gregg-Schumer-Kennedy language that passed the Senate.

The problem with the language, adopted by the Senate by, as I recall, a 94-1 margin, is that it tried to legislate directly counter to the ``case or controversy'' requirement of Article III of the Constitution.

Before reaching the merits of a case, including declaratory judgment actions, a Federal judge must first determine that there exists an actual dispute between the parties. Courts are not permitted by our Constitution to hear hypothetical cases or cases in which there is only a possibility of future litigation.

As both of the hearings of the Judiciary Committee documented, the law is settled with respect to the standards that must be met before a declaratory judgment may be heard in patent litigation. A court may only take a declaratory judgment case if and only if it finds that a ``reasonable apprehension'' of being sued by the patentee is present at the time the action is brought.

This is only common sense because it would be imprudent to allow the courts to be flooded with speculative, time consuming and costly patent suits. As the erudite statements of Mr. Boyden Gray fully documented, the Senate-passed language essentially stood the Constitution on its head by defining the absence of a lawsuit as a statutory basis for satisfying the ``case or controversy'' requirement.

I certainly enjoyed reading the several intriguing missives written on this topic by my former Judiciary Committee General Counsel, Professor John Yoo.

But neither his statements nor his surprise visit and testimony at our committee hearing have convinced me of either the constitutionality or policy wisdom of the declaratory judgment provisions contained in S.1. If we only knew Professor Yoo was coming to testify, we would have given Mr. Gray equal time.

In any event, in the provision the Senate considers today, the settled case law of the ``reasonable apprehension'' test remains undisturbed and the Constitutional requirements are observed.

In adopting this language it is important to note that the presence of the two factors referred to in the statute, the filing of an ANDA application with a Paragraph IV patent challenge certification and the absence of a suit filed by the patent-holding innovator firm, do not alone satisfy the reasonable apprehension test.

Certainly courts should, and in fact, must under the new language consider these two important factors but that should neither be the start nor the end of the inquiry.

For example, the result in the case of Dr. Reddy v. Pfizer, commented upon by many, including my friend from New York, Senator Schumer, does not appear to be affected by the language in this bill. In that case, which involved a challenge to patents set to expire three and one-half years later, the court found that the reasonable apprehension test was not satisfied.

Refiling the suit more proximate to the patent expiration date may yield a different result. That will be a matter for the courts to decide applying the new statute and the existing standards of the ``reasonable apprehension'' test.

I also want to make explicit, the implicit--that nothing in this new language pertaining to pharmaceutical patent-related declaratory judgments creates a new cause of action separate from the existing authority under title 28.

On balance, I believe that the conferees arrived at a fair resolution on the declaratory judgment provision that is a marked improvement over the Senate language.

I want to commend my colleagues in the Senate for recognizing the serious flaws in the language of S.1. I want to commend my colleagues in the House for recognizing the importance of retaining a strong declaratory judgment provision so that generic drug firms will be able to determine the status of their patent challenge in an appropriate fashion.

I plan to monitor closely the history of litigation of these new rules pertaining to pharmaceutical patent litigation and hope that the FTC and other governmental agencies and outside groups will also provide us with their analysis of how well the new provisions work in practice.

We need to be vigilant in assessing whether we have the proper balance between the interests of patent holders and patent challengers. I will expect and request an FTC report, similar to the agency's extremely helpful 2002 study, at an appropriate time.

There are also additional important provisions in this bill that affect Hatch-Waxman, but I would like to reserve my comments for this coming Monday.

One other important issue that we have addressed in this legislation is the preservation of retiree health coverage. My office has been flooded with calls from seniors worried about losing their retiree benefits.

And we have seen published reports indicating that rising drug and health care costs are pushing more and more employers and unions to drop their retiree health coverage.

We took these concerns very seriously as we negotiated this conference agreement.

That is why we have dedicated nearly one-quarter of the spending in this bill to protect retiree health benefits.

For the first time, Medicare will provide funding and incentives so employers and union officials will continue retiree health coverage. Under this bill, no beneficiary will be forced to drop retiree health coverage and participate in the new prescription drug program.

However, if employers drop health coverage in the future, those losing coverage will be allowed to enroll in the Medicare drug program without being penalized.

In addition, this legislation contains a 28 percent non-taxable employer subsidy for each retiree's annual drug spending between $250 and $5000--as high as $1,330 per beneficiary. To qualify, employer coverage must be as generous as, or more generous than, the Medicare Part D drug benefit.

We have made a lot of progress on this provision--protecting retiree health benefits was one of the primary goals of the Medicare conference committee. Let me tell you how much progress we have made--when we considered S.1 in the Senate this summer, CBO told us that the employer drop-out rate was 37 percent. The last CBO estimate on the conference report's employer drop-out rate is below 20 percent. This is a remarkable achievement.

The conference agreement is good for rural America. We want to ensure that Medicare beneficiaries will have access to quality health care--no matter where they live--and especially that rural providers, who provide these important health services to beneficiaries, will be properly reimbursed for their services.

Si Hutt, the CEO of Ashley Valley Medical Center in Vernal, Utah wrote to me asking:

Please vote for the Prescription Drug Bill that came out of

the conference committee. It not only assists Medicare

beneficiaries with escalating drug costs, but it has key

provisions which are important to rural hospitals and

physicians.

The last data that I looked at actually showed a negative

margin for our Medicare business. At the same time, over 50

percent of our patients are Medicare, Medicaid, or self-pay.

As you know, Medicare payment is very complicated and has

some inequities that are improved with this bill. The bill

stops a reduction of physicians' reimbursements--which is

crucial in today's horrible malpractice premium situation and

rising costs.

It also gives a full market basket increase to hospitals

for the next couple of years if hospitals participate in the

American Health Association's (AHA's) national quality

effort. We were among the first to sign up for this

initiative.

Please vote yes for this bill. Thank you.

Hospitals across America will receive a full market-basket update as long as they submit appropriate quality data to CMS. Medicare payments to hospitals providing services to a disproportionate share of low- income and uninsured patients, typically rural and small urban hospitals, were increased from 5.25 percent to 12 percent. It was an increase that was overdue.

There also is an increase in Medicaid DSH payments.

In addition, the legislation redistributes unused hospital residency positions and rural hospitals will be given top priority for receiving these redistributed resident positions.

The conference report does several things to assist critical access hospitals: namely, it increases payments for these hospitals and eases several burdensome requirements that have been imposed upon them.

Rural physicians benefit greatly under this conference report. We included legislation I helped develop that relieves Medicare providers from burdensome regulations and requirements.

Physicians will no longer be subjected to a 4.5 percent reduction; instead they will be receiving a slight increase in Medicare reimbursement for the next two years. We also modify the geographic adjustment for physician Medicare payments, which is extremely important to my Utah physicians back home.

And we reward physicians who are willing to provide care to Medicare beneficiaries who live in scarcity areas--areas that have medical shortages.

Home health care, skilled nursing facilities and hospice facilities in rural areas also receive an increase in Medicare payment. In addition, there are no home health care co-payments for beneficiaries.

As one of the authors of the home health care bill many years ago, I am proud to be able to say we were able to get that done in this bill. Finally, ambulance services in rural areas will be rewarded through increased payments.

Another issue that is extremely important to me is the reimportation of prescription drugs. I mentioned I would talk about this for a few minutes. My Utah constituents are deeply concerned about the high price of pharmaceutical products. But allowing drugs to be reimported from other countries is not the solution. In fact, it makes the problem worse because the safety of these drugs cannot be guaranteed by the Department of Health and Human Services. The recent Government sting operation in one U.S. port discovered that 85 percent of the reimported drugs seized were found to be counterfeit, outdated, or improperly packaged, knock-off packages.

This is very disturbing to me and an example of why I simply cannot support the reimportation of prescription drugs. The possibility of mistake and deception is just plain too great. People could die. Already the FDA has documented many cases of what appeared to be FDA- approved imported drugs that were, in fact, contaminated or counterfeit, contained the wrong product or incorrect dose, were accompanied by inadequate distributions, or had outlived their expiration date. These drugs would be, at a minimum, ineffective and would actually be harmful, if not fatal.

Those safety concerns are real and those in Congress who advocate reimportation ignore them not at their own risk but at the risk of the lives of millions of Americans. If we truly care about our seniors and others who depend on prescription drugs, we should not expose them to what amounts to pharmaceutical Russian roulette.

I might add that I will come up with an amendment that will give tort liability for local and State governments that encourage reimportation.

In addition to these safety concerns, reimported drugs are a threat to the innovation that Americans and the rest of the world have come to expect from our pharmaceutical industry. I am author of the FDA Revitalization Act that now is providing for, after 10 years, finally building the White Oak FDA Central Laboratories with the finest equipment and facilities in the world. It will take us another 10 years to do it. It should have been done 10 years ago. That should move this drug price problem forward because it would, hopefully, give them the facilities to acquire even better people to work there, tough scientists, whom they have not been able to attract for years, who basically will move these drugs through in a more safe and expeditious fashion, thus saving costs to those who develop the drugs, and thus bring prices down.

Canada and other countries with lower drug prices generally import superior American products but they impose price controls to keep costs down. However, it can cost up to $1 billion, as I have said, to produce a new drug, test it, win FDA approval, educate doctors, and make the drug available to patients. No pharmaceutical company could go through this without a chance to recover some of its costs, which will not be possible if we impose in America, however indirectly, Canadian-style price controls. They do not have a pharmaceutical industry in Canada anymore because they basically have thrown their business right out of the country. I don't want to see that happen in our country where we have the greatest pharmaceutical companies in the world. We should be proud.

I do not believe sacrificing the safety supply of our drugs by reimportation is the right answer to the high cost of prescription drugs. The conference committee reimportation provision is similar to what we passed earlier this year. The Secretary of HHS is directed to establish a program that would allow for the reimportation of drugs from Canada by pharmacists, wholesalers, and individuals. However, the Secretary has the authority to suspend such a program if public safety is compromised.

The conference agreement directs the Secretary to conduct an extensive study that identifies the barriers for implementing a drug reimportation program and the potential problems associated with it. I believe it is imperative that such a study be conducted by implementing a program that can pose such a serious public health risk.

Before I close, I take this opportunity to refute some of the arguments I have heard from the other side of the aisle. In fact, I will repeat some of the things I have said before but, hopefully, make them more clear.

My colleagues have said that 25 percent of seniors will be worse off when this bill passes than they are today. That is simply not true. It is false. And it is wrong for them to make these statements. This conference agreement provides Medicare beneficiaries with the benefit they have been demanding for close to 40 years, prescription drug coverage and quality health coverage. This week, we are finally going to give them what they want. We spend almost $400 billion in new money to accomplish that goal.

I also heard some say that this is catastrophic all over again and we will be back a year later repealing this legislation just like we repealed the Medicare Catastrophic Coverage Act of 1988. There is one fundamental difference between the current Medicare conference agreement and the Medicare Catastrophic Coverage Act of 1988--although there are other differences as well. Our Medicare benefit is voluntary. The Medicare catastrophic coverage law was mandatory. That is a major difference. No one is forced to participate in this program. But I think virtually everyone will want to.

In addition, this legislation offers drug coverage to the 33 percent of Medicare beneficiaries who do not have coverage today. I have mentioned how that benefits folks in my State. The Hatch-Waxman reforms on generic system drugs get less expensive drugs to the market faster, providing everyone with less expensive drugs.

This bill makes significant health care improvements for Medicare beneficiaries in rural America and the health care workers who care for these beneficiaries.

Before I close, I make an observation about the endorsement of this legislation from the AARP. Regarding the American Association of Retired People, I have not always been in agreement throughout the years, but I have a new regard for that organization because it made a courageous decision by putting seniors first. I respect the AARP for taking such a positive stand on this legislation. I personally resent some of the irresponsible attacks that have been made against them. If we are going to attack AARP, make sure we are right in doing so and do not use phony arguments because you are losing in the Senate.

In conclusion, passage of this Medicare conference agreement is the right thing to do for our seniors, especially those who currently do not have prescription drug coverage because they cannot afford it. I am pleased I have had an opportunity to play an important role in making this dream a reality for 41 million Medicare beneficiaries across the country. I am pleased I was able to work with such fine members of the conference committee, every one of them. Every one of them worked well. Every one of them deserves credit. Every one of them played a specific role. There were hardrock conservatives who made this bill passable in the House. There were those who were more liberal who made this bill acceptable to many in the Senate, if not the vast majority. There were many in the middle who were trying to make sure we got this thing done right and did the very best we could to do achieve that goal.

Again, I have mentioned the people who basically deserve most of the credit for working on this bill. Everyone on those conference committees worked long, hard hours.

So I resent some of the comments that were made by those who did not participate or, if they would have participated, would have done nothing but complain throughout the process and would have stalled the process. They are complaining because they did not have their way and we will not go towards a socialized medicine approach. They want Government to handle all these problems. We think Government can do a good job if it has some competitive aspects with the private sector as well. The vast majority of this is government, but in a reformed way, with new programs that do a lot of good for every senior citizen who wants to participate in them. It will be a sea change advantage to all as we go forward.

I hope my colleagues will pass this bill. This is a historic opportunity for to us do what is in the best interests of our senior citizens in this country. It is the only opportunity that has been brought to both floors of Congress and the only opportunity for us to pass legislation. This bill is important. This bill should not be subject to petty partisan politics, a superabundance of which I have seen through this process, but particularly yesterday and today. I hope all of our colleagues will vote for this bill.

I yield the floor.

Mrs. BOXER addressed the Chair.

Mr. President, could I do just a little bit of wrap-up?

I thank my colleague from California. I thank her for her graciousness throughout this process with regard to my speech.

Mr. President, I ask unanimous consent that the Judiciary Committee be discharged from further consideration of S. Con. Res. 82 and that the Senate proceed to its immediate consideration.

Mr. President, I ask unanimous consent that the concurrent resolution be agreed to, the preamble be agreed to, and the motion to reconsider be laid upon the table, with no intervening action or debate, and that any statements relating to this concurrent resolution be printed in the Record.

Mr. President, I ask unanimous consent that the Judiciary Committee be discharged from further consideration of H. Con. Res. 69 and that the Senate proceed to its immediate consideration.

Mr. President, I ask unanimous consent that the concurrent resolution be agreed to, the preamble be agreed to, and the motion to reconsider be laid upon the table, with no intervening action or debate, and that any statements relating to this concurrent resolution be printed in the Record.

Mr. President, I ask unanimous consent that the Judiciary Committee be discharged from further consideration of H. Con. Res. 71 and that the Senate proceed to its immediate consideration.

Mr. President, I ask unanimous consent that the concurrent resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid upon the table, with no intervening action or debate, and that any statements relating to this concurrent resolution be printed in the Record.

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 375, S. Con. Res. 77.

Mr. President, I ask unanimous consent that the concurrent resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table en bloc, and that any statements relating to the concurrent resolution be printed in the Record.

Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of the conference report to accompany H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003.

Mr. President, I ask unanimous consent that the conference report be agreed to, the motion to reconsider be laid upon the table, and any statements relating to the conference report be printed in the Record.

Mr. President, I rise to introduce the Enhancing Federal Obscenity Reporting and Copyright Enforcement Act of 2003, the EnFORCE Act. This bill makes three sets of narrow, but important, changes that will build greater flexibility and accountability into our system of intellectual property laws.

First the EnFORCE Act will expand an existing antitrust exemption to conform the law to market realities. Today, an antitrust exemption in the Copyright Act gives record companies and music publishers the flexibility they need to negotiate mechanical royalty rates in the rapidly evolving market for legal music downloading. These parties now need the same flexibility to ensure that they can negotiate royalties associated with innovative forms of physical phonorecords, like enhanced compact disks and DVD audio disks.

The music industry has sometimes been criticized for being too slow to

adopt its business models to new technologies. The industry is now responding to such concerns by developing new products and new distribution channels. The EnFORCE Act will ensure that Federal law allows the music industry to provide consumers with these innovative products and services.

Second, the EnFORCE Act will also resolve two narrow issues relating to statutory damages in copyright infringement litigation. Some accused infringers have tried to avoid liability for statutory damages by challenging the accuracy of the information in copyright registrations; this bill clarifies that courts should resolve such challenges by applying the existing judicial doctrine of fraud-on-the-Copyright- Office. In other cases, disputes have arisen about how many ``works'' have been infringed for purposes of computing statutory damages. These disputes are important for the music industry, which has received inconsistent adjudications about whether an album consisting of ten songs counts as one or ten works for statutory-damages computation. The bill gives courts discretion to conform the law of statutory damages to changing market realities.

Third, and finally, the EnFORCE Act will also enhance both the enforcement and oversight of federal intellectual property law. The bill authorizes appropriations to ensure that all Department of Justice units that investigate intellectual property crimes have the support of at least one agent specifically trained in the investigation of such crimes. The bill also requires the Department of Justice to report to Congress detailed information about the scope of its efforts to investigate and prosecute crimes involving the sexual exploitation of minors or intellectual property.

For the above reasons, I urge my colleagues to support the Enhancing Federal Obscenity Reporting and Copyright Enforcement Act of 2003. I look forward to working with my colleagues in the Senate and the affected public to ensure that this bill achieves its important objectives.