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Public Statements

Prescription Drug User Fee Amendments of 2007

Floor Speech

By:
Date:
Location: Washington, DC

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PRESCRIPTION DRUG USER FEE AMENDMENTS OF 2007 -- (Senate - May 02, 2007)

AMENDMENT NO. 1011

Ms. STABENOW. Mr. President, first, I ask unanimous consent that the pending amendment be temporarily set aside and call up amendment No. 1011 for the purposes of offering the amendment.

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Ms. STABENOW. First, Mr. President, I thank Senator Kennedy for his incredible leadership and work on this very important legislation, and Senator Enzi, as well, for his leadership and work and partnership with Senator Kennedy on this legislation. I also thank Senator Dodd for his years of advocacy for children. I join with him in opposing the Allard amendment, and believe Senator Dodd has given us the first step as to where we need to go in terms of more medicines being available for children. I thank him for all of his leadership.

Mr. President, I today am offering an amendment--a bipartisan amendment, with Senator Thune, as well as Senator Lott and Senator Brown; we also have Senator Kohl joining us--to close a loophole that the brandname pharmaceutical companies are using to prevent competition by delaying the entry of generic drugs.

Our amendment is based on the citizen petition provision that is included in a bill Senator Lott and I introduced last session and again this session, but it has been greatly improved by contributions from Senator Brown. I particularly thank him for his hard work and contributions to this amendment.

The citizen petition process is intended to allow citizens to raise legitimate issues regarding drug products, and it is very important we have that. However, the brandname pharmaceutical companies have increasingly used citizen petitions to delay access to safe, effective, and affordable generic drugs.

Simply put, citizen petitions have become PhRMA petitions to block consumers from having access to affordable medicines, unfortunately. The cost to employers, consumers, health insurance plans, and Government health plans, as a result of delayed entry of generics, amounts to hundreds of millions of dollars--and in some cases billions of dollars.

For that reason, our amendment has the support of a very broad range of consumer groups, business groups, labor, pharmacy, and other organizations, including the AARP, the chain drugstores, General Motors, Ford, DaimlerChrysler, the AFL-CIO, the Alliance for Retired Americans, CalPERS, the National Committee to Preserve Social Security and Medicare, Families USA, the Pharmaceutical Care Management Association, the UAW, and the Coalition for a Competitive Pharmaceutical Market, which is a broad coalition of our employers and insurers across the country.

What would our amendment do? Our amendment would, first, preserve the right to file citizen petitions and raise legitimate safety issues. This is very important. We do nothing to take away the citizen petition. It would reduce the filings, though, of frivolous citizen petitions, and it would stop frivolous petitions from delaying generic entry--and thus costing businesses, consumers, and taxpayers--by allowing needed competition to bring down prices in the pharmaceutical market.

It would do so by, first, requiring the generic approval process to move forward while a petition is considered, unless the petition has raised legitimate public health concerns about the drug.

Second, it would require that final action on a petition be taken within 6 months of the petition being received.

Third, it would require petitions to be signed and include a verification that the petitioner has taken reasonable steps to ensure all relevant information is included in the petition and whether any payments have been made in exchange for filing the petition. This is very important.

And, fourth, it would ensure transparency surrounding FDA's decisions on whether to delay generic drugs on the basis of a citizen petition.

Our amendment improves upon the language in the Stabenow-Lott bill in that it sets timelines for FDA to evaluate petitions and absolutely ensures that if it is a legitimate public safety issue, then medicines will not be approved unless and until the safety issues are resolved.

Why do we need this amendment? Any person or organization can file a citizen petition with the FDA raising concern. We certainly want people to be able to do that. However, the process right now is being used in ways that are unintended.

The Medicare Modernization Act closed a lot of loopholes that the brandname companies were using to delay generics from going into the marketplace. So, unfortunately, they have looked to another tool. They are now using these frivolous citizen petitions.

Between passage of the Medicare Modernization Act and April 30, 2006, brandname companies filed 45 citizen petitions requesting that the FDA delay approval of a competing generic drug. Of the 45 petitions, the FDA has ruled on 25 of them. Of the 25 petitions, 92 percent of them were denied.

The brandname companies often file these petitions right on the eve of the generic drug being approved, making it very clear that delay is the goal. These are ``11th hour'' petitions, as they have been called, and 12 of those ``11th hour'' petitions--12 of them--were denied in whole and 1 in part by the FDA.

What do the petitions ask for? Do they raise new and important issues? Unfortunately, the answer is no. Although the petitions are filed before or after a generic drug has received tentative approval from the FDA, they commonly simply request additional studies or additional data, based on mere speculation by the brand companies.

The FDA typically will not approve a generic drug until all the underlying issues of a citizen petition have been addressed. As a result, although the FDA regulators provide that citizen petitions should be addressed within 6 months--and that is what our amendment says--the average review time is 10 months. And 10 months means lots of lost dollars. It leaves consumers paying more, businesses paying more, and insurers paying more.

The fact is the vast majority of petitions filed by brand companies have nothing to do with science and everything to do with delaying generic drugs, stopping the competition. Consumers lose as a result of that.

In December 2005, Merrill Lynch released a report analyzing brand company use of the FDA citizen petition processes. The analysis involved a review of citizen petitions filed by brand companies since 2001. They said there was a ``sharp uptick'' in the number of citizen petitions filed by brand companies in 2004 and 2005 and, in many instances, the filing of [these citizen petitions] by branded companies coincided with the expiration of a product's patent (or other marketing exclusivity) effectively delaying generic competition for months and sometimes years.

Why is this important? Well, I want to give you a few examples.

Flonase is a drug that is used to treat nasal symptoms and allergies. It is a very commonly used drug. In this case, the brand company filed multiple citizen petitions in an effort to delay the generic competition, a lower priced drug, from going on the market. All three citizen petitions were denied.

According to the FDA:

[The brand company] has not articulated sound public policy grounds for supporting a stay. In addition, [the brand name company] has not demonstrated that the delay resulting from the stay is not outweighed by public health and other public interests.

In other words, no sound public policy, but, unfortunately, the delay took months to resolve.

The following quote from Gary Buehler, Director of the Office of Generic Drugs at FDA, was reported in the New York Times on February 23, 2006:

The agency was required to consider the petitions and to write responses. That took time and delayed the approval [process].

So what happened? Even though all of these petitions were denied by the FDA, it took so much time, and generic entry was delayed by 656 days, and the brand company was able to get $1.65 billion more in sales.

We see with all of these drugs shown on this chart delays that have, in fact, allowed the brandname company to be able to continue sales. Unfortunately, these higher costs are paid by our seniors, consumers, and businesses that offer medication, as well as by insurers themselves.

We have not only large delays, but even in the case of 5 days, $17 million more in sales. So there is great incentive to use delaying tactics in order to be able to continue this process.

Mr. President, I see my time is up. Let me say this amendment was carefully constructed to allow citizen petitions to continue. The overwhelming evidence from the Federal Trade Commission, the Office of Inspector General, as well as the FDA, and others--the overwhelming evidence is we are seeing this as a new loophole that is being used to delay effective competition and lower cost medicine from going into the marketplace. We can fix that and keep the citizen petition for legitimate issues. We certainly want that. We certainly are concerned about safety, as is the FDA. But it is time to close this loophole.

I thank my colleagues who are cosponsoring this amendment and urge support for the amendment.

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Ms. STABENOW. Mr. President, I rise to support the amendment we have put together, led by the Senator from North Dakota. I thank him for his passionate leadership and advocacy and the way he is able to speak in very commonsense terms about what this is all about. What we are talking about is common sense. We are talking about whether we have the most competition that will allow the best price for people related to their medicine. I also am looking around for Senator Brown, who is also here to speak. I thank him publicly for his help on another amendment that relates to competition and closing patent loopholes relating to generic drugs. I thank him again. Senator Brown has been a wonderful advocate on these issues.

I find it so interesting whenever we hear that we cannot lower the price of prescription drugs without losing research. Let me comment on that first. Here is what is happening today as it relates to the development of new medicine. We all want that. We all want that, those of us who supported overwhelmingly, the 63 Members of the Senate who voted for stem cell research to provide new lifesaving research and tools for our researchers. We came together and said, yes, we want new lifesaving research.

That is not what this debate is about. The debate is about whether there is going to be a closed market to folks who get to set the price without competition or whether there will be competition so people can afford to buy medicine. The reality is that our structure is such right now, as it relates to the way we bring drugs to market, that you start with basic research, of which last year $29 billion was paid for by the American taxpayer--$29 billion. Now, the industry then added another $39 billion, according to the PhARMA Web site. They are allowed to write off their research as a business expense, or take an additional amount--the R&D tax credit on top of that to write off their research. So the taxpayers are paying, it is fair to say, the majority of what it costs in basic research right now for new lifesaving medicine.

Personally, I am willing to do that because I think it is incredibly important. It is in our public interest. Having all of us together as taxpayers invest in the National Institutes of Health and other lifesaving research makes sense to me. After we do that, we allow the companies to take that information and research and begin to develop medicine. That is fine, too. We then allow up to a 20-year patent, so that the company that does this development can recoup their costs without the same kind of competition from a generic company, another kind of company. So we give them a privileged status. We cover their costs, after we as taxpayers have helped them or may have fully funded the research done in the beginning. So we go through all this, and all that I ask on behalf of the people of Michigan and all I think we are asking for is, when they get done with the patent, people be able to afford to buy the medicine and that we have the kind of competition that allows that to happen.

One piece is to make sure patents are not extended beyond 20 years unfairly by manipulation. I will have an amendment that deals with closing some loopholes. The other is to make sure we open our borders to allow our pharmacies, our hospitals, our medical schools, all those who are providing prescription drugs to consumers, to be able to purchase those and get the best price.

In Michigan, it may be from Michigan or it may be from Ohio or Wisconsin, but it may be 5 minutes across the bridge in Canada. In fact, Mr. President, that is what we find 5 minutes across the bridge. I have had a lot of opportunities to put seniors on buses to go to a pharmacy in Canada to see the fact that you are looking at 30-, Ð40-, 50-percent cheaper prices. I think of my sister-in-law when I say this. She was diagnosed with breast cancer, and thank God is doing well and has recovered. But when I look at the drug Tamoxifen that many breast cancer patients are required to take, or are asked to take, in Michigan, the last time I looked, it was about $360 a month for that medicine. Five minutes across the bridge, it is $60. That is a huge difference. That is a huge difference in somebody's ability to get the treatment they need for breast cancer. That can be replayed over and over again as it relates to medicine.

Now, what is also interesting is that prescription drugs are being brought across the border every day legally by the companies themselves. Lipitor, which was developed in Michigan--and I am proud of that--is manufactured in Ireland. They bring it back. There is no argument about safety when they are bringing it back. We have, right now, around the world, from Slovakia to China to India, medications that are being brought into this country by the companies themselves, under safe conditions.

Our legislation puts into place safety requirements that will allow the same thing to happen if it is a wholesaler, a pharmacy doing business with another pharmacy. There is no rocket science here. The very same safety provisions can be put into place. We also know that, in doing that, it is important to put that language directly into this bill. It is important. We have put in there a chain-of-custody requirement to ensure that drugs are handled not only by authorized persons but shipments must use anticounterfeiting technology to assure the products' integrity.

We do a number of things that relate to registering with the FDA and agreeing to strict requirements to ensure safety. But those requirements are not all in the bill. Why is that? Because we know that in the past we have seen--we see again now--a second-degree amendment to say that citizens cannot get the best price, and pharmacies cannot do business with pharmacies across the border, unless the Secretary certifies safety.

And we know that for whatever political reasons, that has not happened over the years. That is actually current law.

To get beyond the politics of this, we have worked on a bipartisan basis, with wonderful bipartisan support, to actually put the safety provisions that are required into the bill so the certification by the Secretary is not necessary.

We have had legislation passed by the Senate with wonderful bipartisan support in the last few years on related issues that involve reimportation. Last July, 68 Senators voted for an amendment to prohibit U.S. Customs and Border Protection from stopping individuals from importing FDA-approved drugs--individual reimportation.

I thank Senator Vitter for his leadership. I have been pleased to work with him on this issue of individuals being able to import medicines for themselves. Senator Vitter and I also worked together to make sure trade agreements cannot be used as a backdoor way to stop reimportation of cheaper prescription drugs into this country.

We are already on record as supporting this effort to lower prescription drug prices and create competition. It is my hope that, once again, in this bill we will reaffirm that we support the FDA creating safety regimens--we know they exist--to be able to bring medicine safely into the United States from other countries, and we will no longer allow a group--it is the only group I know that is able to stop trade at the border. Everyone talks about free and open trade, and yet in Michigan you can bring auto supplies back and forth every day, you can bring all kinds of agricultural products, you can bring anything back and forth across the border except medicine, except prescription drugs, unless you are a drug company. Drug companies can, but if you are somebody trying to make sure you get the lowest possible prices to consumers through a pharmacy, a hospital, medical school, or other businesses, you are not allowed to do it. It doesn't make any sense.

I believe we need to take off this protectionism which has been in place for years which has put consumers and businesspeople, frankly, into a situation where they are paying higher prices for medicine than they should.

This is not about research. I conclude by saying that according to SEC filings, 2 1/2 times more is spent on marketing and advertising brand-name prescription drugs in the United States than is spent on research. This is not about research. We as taxpayers are leading the way on funding research, and we all support doing that. This is about competition versus protectionism and whether consumers will get the very best price for lifesaving medicine.

I urge the adoption of our amendment.


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