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Controlled Substances Export Reform Act of 2004

Location: Washington, DC

CONTROLLED SUBSTANCES EXPORT REFORM ACT OF 2004 -- (Senate - November 20, 2004)


Mr. BIDEN. Will the Senator yield for a question?

Mr. HATCH. Yes.

Mr. BIDEN. Isn't it true that the disadvantage to U.S. businesses of requiring smaller, more frequent shipments to each country of use is substantial? When a foreign entity seeks to import a schedule I or II drug, or a schedule III or IV narcotic from the United States, they must first secure an import permit that is shared with the U.S. manufacturer and DEA. Our companies then have 60 days in which to obtain independent safety and quality testing on each separate product batch to be shipped. Upon completion of that testing, the manufacturer submits a highly detailed export permit application for DEA's approval. If DEA fails to issue the permit within 60 days, the entire process must be restarted. Because independent testing is expensive and the export process is highly paper intensive, it is not unusual for companies to struggle against the 60-day deadline only to have to begin again. Unfortunately, while we engage in this burdensome process, patients suffer without their drugs and foreign physicians seek out substitutes to unreliable U.S. supplies.

This process was put in place long before the adoption of our international drug control treaties and the anti-diversion protections they provide. It is now outdated and unnecessary.

Mr. HATCH. Yes, the Senator is correct. In addition to the burden imposed on U.S. manufacturing exporters, the advent of the European Union has created a situation that places our foreign distributors in violation of European law. Member countries of the EU are considered borderless in terms of trade. Products introduced into the European Union are required to be available for transport and shipment among and between all member countries under their law. However, because we don't recognize the European Union as a single entity and cross-border transfers are prohibited, our distributors are placed in the position of violating European law in being forced to deny inter-country distribution of U.S. drugs.

Mr. BIDEN. Will the Senator yield for another question?

Mr. HATCH. Yes.

Mr. BIDEN. While the Controlled Substances Act restrictions made sense when they were adopted over 30 years ago, would you agree that changes in the way international pharmaceutical markets work, and in the way controlled substances are tracked, and have since rendered the requirements unnecessary? Our legislation was developed in cooperation with the Drug Enforcement Administration to ensure that all necessary anti-diversion controls remain.

Under our bill, each country is required to have an established system of controls deemed adequate by the DEA. Only DEA permit or license holders in those countries may receive regulated products. Re-exports are limited to one single cross-border transfer. The DEA must be satisfied by substantial evidence that the exported substance will be used to meet an actual medical, scientific or other legitimate need and that the second country of receipt will hold or issue appropriate import licenses or permits. The exporter must notify the DEA in writing within 30 days of a re-export, and an export permit must have been issued by the DEA.

The legislation specifically retains the Drug Enforcement Administration's authority to deny a request to export or re-export a controlled substance. A company seeking to export a drug for subsequent transfer must provide the DEA with exhaustive information on both the country of initial export and the countries to which the controlled substances would ultimately be destined. In addition, DEA must be provided follow-up notification of any cross border shipment within 30 days of that transfer. The U.S. Government will know where all drugs are being shipped and for what purpose. Without that information, U.S. pharmaceuticals will never leave our soil.

Mr. HATCH. That it is correct. The purpose and intent of this legislation is to place U.S. pharmaceutical companies on equal footing with their international competitors. Moreover, this change is entirely consistent with the long-established regulatory scheme pursuant to the Federal Food, Drug and Cosmetic Act. Eliminating the need for multiple, small shipments and the associated wasteful, small batch testing, will save U.S. companies nearly 80 percent over current export distribution costs, savings that will result in more American jobs and stronger international markets for U.S. products.

As the Senator noted, the bill has been crafted with the assistance of the Drug Enforcement Administration to ensure all necessary controls will remain in place while creating a level playing field for American business. It is simply a commonsense update to an outdated law, and I urge its passage.


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