Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, how much time remains?

Mr. GREGG. Mr. President, let me say that we expect to accept this amendment. The issue of energy and its cost in this country is a pretty complex issue. It is not simple. There is no magic wand to resolve it. Obviously, the things which the Senator mentioned--alternative-fuel cars, lowering consumption, renewables--these are all a big part of the energy resolution. But it is a complex matrix. One of the essences of it, which was not mentioned, is supply. The fact is that the world demand for energy has increased dramatically, especially as China and Southeast Asian countries have begun to have very robust economies. The demand for the supply is such that the price of oil has increased dramatically. We in this country are going to have to accept the fact that we are going to have to look for other sources of energy. I regret that in the past domestic supply has been curtailed. For example, the opportunity to get supply from the northwest slope of Alaska or the opportunity to search for potential supply States which are willing to accept having oil exploration off their coasts--all of these opportunities to get more supply are being resisted, especially from the other side of the aisle. Yet this has to be part of the equation of how we resolve the energy issue. There is more than one element to the formula of resolution. The bottom line is that we should do everything we can to get off of our dependance, as much as possible, on foreign sources of oil. We find ourselves purchasing oil from countries which have antipathy toward us and which create problems for us. It would be good if we could supply the oil domestically or at least within the Western Hemisphere and not have to go beyond the Western Hemisphere in the manner we do. Another proposal is to get ethanol brought to the east coast out of Brazil. There is a 24-percent tariff on that ethanol. The last time we tried to repeal that tariff, it was opposed, opposed on both sides of the aisle but especially from the other side of the aisle. So there are a lot of different elements to the matrix of how we resolve the energy problem. I certainly am able to support the Senator's motion, but I don't think the answer is simply one or two items. It is a long list of items. On the underlying bill, there is still this fundamental issue, which is going to be raised by three of the motions that were offered, of the effect on revenues and tax policy on the American wage earner of this budget. There has been a lot of representation, a lot of numbers thrown out. The bottom line is pretty simple. Beginning in the year 2010, a number of tax rates which benefit Americans who create jobs and take risks and especially benefit senior citizens who live on fixed incomes, benefit people who have gone out and been entrepreneurs and created jobs, benefit people who have fixed incomes because they are living off of dividends to a large degree and they are retired, a number of these rate structures are going to expire, and the cost to those people who benefit from that rate structure is going to go up dramatically. Of course, it is always characterized by the other side that this is just a benefit to the wealthy. It is not. More than 75 percent of those who claim dividend and capital gains income earn less than $100,000. Yet under this budget, their taxes will double on those dividends and capital gains income. Thirty percent of tax-paying seniors claim capital gains income, and more than 50 percent of tax-paying seniors claim dividends income. Almost all those seniors are living on a fixed income. They are not extremely wealthy. They just happen to be at a point in their life where they are cashing in their assets in order to live. They have capital gains as a result. They sell their home. They sell their stock. Yet under this budget, their taxes are going to double on those items. In fact, dividend income accounts for 11 percent of the total income of seniors who earn less than $30,000 and 14 percent of the earnings of those who earn $30 to $50,000. For moderate-income seniors, they are dependent on a dividend in many instances. That is not unusual. Our society encourages people to invest in the stock market. Even though we have heard about the gloomy economic situation in this country, while we have added 7.4 million jobs and have had 22 quarters of recovery and we have had tax revenues exceeding historic levels, the stock market is now at a historic high and continues to go up. Obviously, some people don't think it is all that gloomy. The fact is, a lot of seniors throughout their earning career invest, either through an IRA account or a pension account. They invest in assets which are now subject to the benefit of a capital gains and dividends rate, which is very helpful to them in making ends meet because it is a fair rate. Yet those people's taxes are going to go up under this budget. Fifteen million seniors would see their taxes increased if the current tax policy is not extended. This budget makes no room for the extension of the capital gains or dividend tax rate. That is an important point to remember. Equally important is the underlying philosophical difference. There is a belief on the other side that the Government should be able to take more money out of people's pockets and decide how to spend it. That is why the discretionary spending in this budget is significantly over the President's level, $18 billion in the first year of the budget. It is why there is no effort in this budget at all to discipline entitlement spending, which is clearly the most serious issue we face as an economy and as a society after the threat of Islamic terrorism, the problem of confronting the baby boom generation and the demands it will put on our society economically, to say nothing of the social change of having the largest retired population in the history of the country. There is no attempt at all to get into that issue of how we are going to handle this fiscal meltdown we are facing if we don't address the impending retirement of the baby boom generation. Those philosophical differences are very large. What we have tried to do through the motion to instruct is to highlight those differences, the fact that we believe these tax rates which benefit so many Americans should be extended, that we do not believe the spending should be increased well above the proposal of the President--and the President was rather generous, to say the least, in his increase in discretionary spending. We also believe there should be an effort made to address expansion of entitlement spending, which is going to be a function of the retirement of the baby boom generation, and the fact that will simply overwhelm our capacity to support those programs in their present form, and our children and our children's children will be put in a position of having to pay so much in increased costs for the burden of the Government that they will be unable to benefit from the good life we have benefited from. They will have trouble sending their children to college, buying their first home, doing the discretionary things people want to be able to do with discretionary money because most of that discretionary money will have to be used to support the entitlement programs to support the retired baby boom generation which will double the number of people retired in this country. None of that is addressed in this budget. We think that is a failure that is unfortunate. These are some of the concerns that remain at this time. However, I would be happy to ask unanimous consent that the motion of the Senator from Michigan be accepted and that the time remaining be divided between myself and the Senator from North Dakota so he can get some more time to respond to my comments which I am sure he will want to do.

Mr. GREGG. Did we also agree that the time between now and 7:30 would be equally divided.

Mr. GREGG. How much time do I have?

Mr. GREGG. Mr. President, of course, there is a lot of back and forth. So many numbers are thrown out, nobody can keep up. The $15 billion in Medicare savings is a nice number. The only problem is, it is coupled with about $30 billion of new spending in the SCHIP program and, as a result, it is a net loss. So the long-term savings are not there. In fact, they are a long-term cost. Of course, the health care proposals, if they score, that would be great, but they don't score. So when you throw out a number of $81 billion, you are throwing out a number that CBO won't support. If it did support it, we would immediately capture those funds and use them constructively to reduce the deficit or to give people a tax benefit. As a practical matter, they don't score so the number is not relevant. I want to speak quickly to the Senator's response to my motion. My motion says: These tax reductions which are very important, which address issues which are important to the American people and which are not covered by the proposal which we have before us, unfortunately, need to be continued. These tax reductions cover the $1,000 child credit, the marriage penalty, the 10-percent income tax bracket, all of which the Senator has said are going to be picked up by the Baucus amendment--maybe, maybe not--the lower marginal rates, definitely not. The earned-income tax credit relief for military families does not appear to be in here. The adoption tax credit is not in here. The dependent care tax credit is not in here. The college tuition deduction for student loan interest for $2,000, Coverdale IRA, and the 15-percent rate on capital gains and dividends, which as I just went through, is very critical to seniors and to the economy generally and has been a huge revenue windfall for us as a government, and adjusting the death tax so that it properly reflects fairness to small businessmen and farmers, those are not in here. All of those are not in the proposal of the Senator from North Dakota. In addition, there is the operative language of the Senator's proposal which essentially is the fig leaf or the Wizard of Oz approach which says we are going to get this money from somewhere--we really don't know where, the tax gap or some building in the Cayman Islands-- when, in fact, the practical effect is, you are going to have to raise taxes on the American people to accomplish what the Senator from North Dakota is proposing with his motion. That is why I will be opposing this. I suspect some of my colleagues will support it because obviously the Baucus language makes sense, although it doesn't go far enough. In light of that, I guess the time is probably used up, isn't it?

Mr. GREGG. Mr. President, how much time do I have remaining? I don't have 10 seconds? I could fit everything into it. Mr. President, I ask unanimous consent that the motions be voted in the following order and that the provisions relating to debate--I guess this is something you ask, I say to the Senator. It was just handed to me. You ask that.

Mr. GREGG. Mr. President, I ask unanimous consent that it be in order to ask for the yeas and nays on the Kyl motion and all the other motions.

Mr. GREGG. All three motions.

Mr. GREGG. Mr. President, I ask for the yeas and nays on all the motions.

Mr. GREGG. Mr. President, the Kyl motion is a bipartisan proposal, or at least it was. Actually, the original language came from the Senator from Louisiana. It basically sets a rate of 35 percent--the proposal of the Senator from North Dakota sets a top rate of 45 percent--it sets that rate on estates, and on small estates and small businesses it sets a lower rate. It exempts estates of $5 million or less. It is an extremely reasonable approach to the death tax. People should not be taxed because they die, to begin with. But if we are going to tax them, let's not put them out of business. Let's allow families with small businesses to survive. That is what the Kyl motion does.

Mr. GREGG. Mr. President, this amendment is essentially a cover amendment, and it is to cover up the fact that it is the Wizard of Oz at work on the Democratic budget, and it doesn't work. If you spread pixie dust over this by Tinker Bell, it still wouldn't fly. The fact is, you cannot produce these funds in the manner in which the Senator from North Dakota has suggested by some building in the Cayman Islands and other proposals. If you want to extend the tax cuts and you want to be concerned about the middle-income American who is benefiting from those tax cuts, you should vote for the next motion to instruct.

Mr. GREGG. Mr. President, this motion is the opportunity to speak out on behalf of seniors, working Americans, families, and children in this country. If you believe the tax rates should stay in place, which include the $1,000 child tax credit, marriage penalty relief, the 10- percent income tax bracket, the lower marginal rates for working American families and small businesses, the earned income tax credit for military families, the adoption tax credit, independent care tax credit, the college tuition deduction, the deduction for student loan and interest, the $2,000 Coverdell----

Mr. GREGG. Mr. President, the next two are important--the 15-percent capital gains dividend rate, which helps seniors and people on fixed income and gives our economy a boost, and revenues to the Federal Government a boost, and the death tax, structured along the lines of what Senator Kyl's motion put forward--if you believe in those proposals, you will want to vote for this motion to instruct the conferees.

Mr. GREGG

Mr. GREGG. Mr. President, I suggest the absence of a quorum.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to pay special tribute to U.S. Army Ranger CPT Jonathan David Grassbaugh of Hampstead, NH. Sadly on April 7, 2007, while supporting Operation Iraqi Freedom, this brave 25- year old leader and three of his fellow soldiers gave their lives for our Nation when an improvised explosive device detonated near their patrol in Zaganiyah, Iraq. Captain Grassbaugh was assigned to Headquarters and Headquarters Troop, 5th Squadron, 73rd Cavalry Regiment, 82nd Airborne Division, out of Fort Bragg, NC, and was protecting our country in his second deployment to Iraq. Jonathan, or Jon to family and friends, was born in Ohio, but his family moved to Hampstead, NH, when he was in the third grade. He attended Hampstead Central School, graduated from Hampstead Middle School, where his mother Patricia is principal, went on to Phillips Exeter Academy, where he was a 4 year honor student, and then to Johns Hopkins University, where he studied computer science, graduating in 2003. While at Johns Hopkins University he was a distinguished member of the Army ROTC program and Pershing Rifles, served as captain of the Ranger Challenge Team, commanded the ROTC Battalion during his senior year and won the National two-man duet drill team competition. Following completion of the arduous U.S. Army Ranger School in April 2004, Captain Grassbaugh was assigned to the 7th Cavalry in the Republic of South Korea. He was later assigned to the 3rd Battalion, 505th Parachute Infantry Regiment where he assumed another leadership position serving as an antitank platoon leader. Jon also served as an aide de camp for the 82nd Airborne deputy commanding general, scout platoon leader, and logistics officer for the 5th Squadron, 73rd Cavalry. In July of 2006, he was deployed for a second tour of duty in Iraq in support of Operation Iraqi Freedom. Friends say Jon was laser focused, never questioned his service or his need to be in Iraq, cared deeply for the soldiers in his command, and always put a 110 percent effort into everything. Captain Grassbaugh's awards and decorations serve as testimony to his stellar character and performance. They include the Bronze Star Medal, Purple Heart, Meritorious Service Medal, Army Commendation Medal, 4 Oak Leaf Clusters, Joint Service Achievement Medal, Army Achievement Medal, National Defense Service Medal, Iraq Campaign Medal, Global War on Terrorism Service Medal, Korean Defense Service Medal, Army Service Ribbon, Overseas Service Ribbon, Parachutist's Badge, Combat Action Badge, and the Ranger Tab. Patriots from the State of New Hampshire have served our Nation with honor and distinction from Bunker Hill to Zaganiyah, Iraq--and U.S. Army Ranger CPT Jonathan Grassbaugh served, led, and fought in that same fine tradition. My sympathy, condolences, and prayers go out to Jon's wife Jenna, his parents Mark and Patricia, brother Jason, and to his other family members and many friends who have suffered this most grievous loss. All will sorely miss Jon Grassbaugh, the caring husband, dedicated son, loyal brother, good friend, outstanding Ranger. Laid to rest at Arlington National Cemetery, Captain Grassbaugh joins his fellow heroes in eternal peace at our military's most sacred place. In the words of another son of New Hampshire, Daniel Webster may his remembrance be as long lasting as the land he honored. God bless Jonathan David Grassbaugh.

Mr. GREGG

Mr. GREGG. Mr. President, last week, the FDA just sent out a warning to American consumers regarding purchasing medications from certain Internet sites because the FDA cannot verify that the drugs purchased over those sites are going to be safe or that they won't be counterfeit. We need to give the FDA the authority and the resources to address the issue of unsafe Internet pharmacies and the Gregg Internet pharmacy amendment does just that. It creates a comprehensive framework to assure consumers that they can shop with confidence, knowing that the drugs they purchase online will be safe and effective. Hopefully, we will address this important and timely drug safety issue, if not now, at least before this bill completes the whole process and comes back from the conference committee

Mr. GREGG

Mr. GREGG. Madam President, I appreciate the Senator from Ohio who was going to move to morning business by giving me a little respite and let me speak. I rise relative to the amendment I have offered on this bill, which is the effort to try to protect people who purchase pharmaceuticals from Internet pharmacies. This is a major concern today. In fact, just last week I entered into the Record that the FDA reported they had identified 24 different Internet pharmaceutical sites that appeared to be selling adulterated drugs to people. At least in three instances they were selling adulterated drugs which came in packages that had a lot number on them, they had an expiration number on them, and they looked exactly like the drugs the individual would have bought had they bought them through a pharmacy in the United States. But it turned out those drugs, when they were opened by the FDA and tested by the producer of these pharmaceutical products, were adulterated, and in some instances the adulterated drugs could have caused severe harm to the person had they taken those drugs. In other instances, the drugs were simply sugar. They had no chemical compound in them. We have had a lot of instances of this occurring. The FDA has literally hundreds of instances of people purchasing drugs over the Internet sites which come in from international locations, which the FDA has no jurisdiction over. When the person received those drugs, they took them and they were harmed. In several instances, death has actually occurred as a result. So what I think is important is that we create a system where, when somebody uses the Internet--because everybody uses the Internet today, or just about everyone uses the Internet--to purchase the pharmaceutical product, that they be able to be fairly confident, in fact very confident, in fact assured that product is FDA approved. This is doable. This is not an impossible exercise. This capacity to make Internet pharmaceutical sites subject to FDA oversight and give consumers the information they need in order to ensure that the pharmaceutical site is FDA approved is a very doable event. That is what my amendment creates. Essentially what it will say is that the FDA will receive the resources necessary to be able to inspect and review and manage and overview Internet pharmaceutical sites after they have put an Internet pharmaceutical site through the system of testing and make sure that site first has responsibility in the United States, so that they are not in Russia or Albania or Pakistan or someplace and can't be reached if they do harm by selling an adulterated drug to an American citizen, that that site has a bonded individual in the United States who is responsible for actions taken by that site in selling products in the United States. Second, that the products that are sold through that site are FDA approved and have a review process which assures that they have been FDA approved. At that point the FDA will put a tamperproof recognition symbol on that site so that a person who goes on the Internet and looks up a pharmaceutical site will immediately see this tamperproof identification that it has been FDA approved, sort of like in the old days when you used to have the Good Housekeeping seal of approval on a product. That is what this will do so that an American citizen buying through an Internet site will know that the product coming through that site is FDA approved, that it is what they say it is, what the pharmaceutical site says it is. This is a step which needs to be taken, obviously, in order to assure that American consumers are safe. As we see, American consumers are more and more going to the Internet for purposes of buying their products. Now, regrettably, some fairly large pharmaceutical--not pharmaceutical companies but some fairly large drug retail companies which run Internet sites in most instances have reservations about this language because they are concerned about the fee system which is set up to pay for it. I can understand that. I am willing to look at ways of addressing that so that we can alleviate, to some degree, their concern. But the simple fact is, you have to come up with a system which assures that resources are available for the FDA to be able to go out and monitor these sites. It should be a consumer-producer retail sales- fee system so that the people who are taking advantage of this site and the people who are benefiting from the site, both economically and through purchasing the product, are essentially bearing the cost of making sure the FDA has the resources necessary to monitor the site. That is a reasonable approach. It is something we do on most issues of this type. So there is a fee system in this proposal which would basically pay for the resources necessary and give the FDA the support it needs financially so that it can expand its review process to cover these pharmaceutical products which are being sold over the Internet. This is a step we have to take. This is not something where we can sort of bury our heads in the sand and say, well, we are just going to let this happen. We are going to let these sites continue to function, and we are going to ignore their existence because more and more Americans are moving to this process of purchasing drugs. You cannot have, in the United States, two different streams of supply of pharmaceuticals for American citizens: one which is absolutely safe and when American citizens are purchasing that product they are sure that it is not going to harm them; and, two, where they are basically rolling the dice, playing Russian roulette with what they purchase when they use an Internet site but thinking they are actually purchasing something that is claimed to be the medication they need. You cannot do that and claim we have a safe and efficient system, a safe system which has efficacy in the quality of the drugs and have those drugs be safe when they are delivered to the consumer. We cannot have two different systems and still make that claim. We are basically undermining one of our great strengths as a culture, which is that we have a very strong system for protecting the food that Americans eat and the drugs America uses. So it is critical that we face up to this very significant problem we have, which is that the Internet pharmacy situation is basically a ``wild west'' of supply. Nobody knows what they are getting. Well, they think they know what they are getting, but nobody actually knows what they are getting. They can be harmed as a result. So I believe this proposal is a reasoned proposal. It is one I hope we will take a hard look at as a Congress because I believe it is our responsibility. This is an area where the Federal Government has chosen to legislate and has done quite well over the years, FDA proposals dealing with the safety of drugs and food in our country and in our supply chain. We have a lot of history. We can take considerable pride in it. But the market has changed. We need to change the process by which we review the quality of the drugs as they come through this new market structure, which is called the Internet. This is not a partisan or political issue. This is just a question of how we substantially improve FDA's capacity on oversight of the delivery of drugs to the American citizen. So it should, I hope, be accepted at some point. I understand it is going to be opposed, regrettably, by the other side of the aisle. This makes no sense to me. I think it has something to do with the fee system that is in place and the fact that the large drug delivery companies in this country are opposed to this type of system. But as I stated, this is negotiable. There should be some way to deal with that. But, in any event, at some point I hope we face up to the reality of needing this type of an amendment and giving the FDA this type of authority. At this point I am not going to ask for a vote on the amendment. I may before we move to final passage. But I am also considering other approaches to getting this type of language considered. I will review the situation as we go down the road. But I did want to speak tonight to outline again the need for this type of protection. As I said, just last week the FDA sent out a warning, actual warning to American consumers, that said: Do not use these 24 Internet sites because we cannot tell you that the drugs you purchase over these sites are going to be safe, that they are going to be what they say they are. In fact, we can tell you in these three incidents that they were not. That means people were put at risk by purchasing drugs from these sites. So we need to give the FDA this authority, and hopefully we will. If not now, at least before this bill completes the whole process and comes back from the conference committee. I yield the floor.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. Mr. President, I wanted to speak briefly, partially in response to statements made on the other side of the aisle, specifically by the Senator from Vermont whom I had the good fortune to listen to and whom I always enjoy listening to--the junior Senator from Vermont. Although I always enjoy listening to him, the junior Senator, I enjoy listening to the senior Senator, too, but in this case it was the junior Senator, a very eloquent individual and a neighbor. I did want to make a couple of points. He said, or implied--in fact, he said--that the Cochran amendment was essentially a poison pill to the efforts of Senator Dorgan to generate reimportation language which would be effective in allowing Americans to purchase drugs from Canada, or over the Internet for that matter. Then he said this was a result of the fact that the Bush administration was basically a tool--those are my words, but I think that is a characterization that is fairly accurate--a tool of the pharmaceutical industry, and the Cochran language was a reflection of that sort of attitude. I think it is important to understand what the genesis of the Cochran language is. The Cochran language did not come from the Bush administration. The Cochran language actually came from the Clinton administration. I was here when it was originally proposed, and it was supported by President Clinton and by his Secretary of Health and Human Services--I believe it was Donna Shalala--because they felt very strongly, as does the Bush administration, that the FDA should not have two standards of safety. It should not have a standard of safety that says the products that are sold in the United States have to be subject to FDA review to make sure they are safe, but for products which somebody goes out of the country and buys and brings back to the United States, the FDA will be forced to turn a blind eye and will not review that product's safety. The language is simple. It says if the Secretary of Health and Human Services cannot assure, through the FDA, a product coming into the country is safe and effective, then the product cannot be brought into the country. That is pretty reasonable language. That is what we asked the FDA to do. That is why the FDA was created, to protect American citizens who are purchasing pharmaceutical products or medicines. What this language which Senator Cochran is proposing would do is simply extend that language, should the Dorgan amendment pass, to products which are purchased outside of the United States and brought into the United States the same way, the exact same way, the FDA is required to review the safety and efficacy of a product which is purchased in the United States. That is all the language does. Yes, it will have a significant impact on the Dorgan language because, yes, both under the Clinton administration and under the Bush administration the Secretaries of Health and Human Services have said it is going to be extremely difficult, with the resources they have, with the authorities they presently have, to assure the safety and efficacy of drugs that are being reimported into this country. But it is truly an inaccurate representation to say this is a Bush initiative, the purposes of which are to protect the pharmaceutical industry. It is just the opposite, in fact. This was an initiative created by President Clinton and his administration to protect the American consumer from purchasing drugs which the FDA doesn't have the wherewithal to determine whether or not they are adulterated. Now, the response to this, of course, the substantive response versus the pejorative response, which is that it is just a pharmaceutical stalking horse--the substantive response to this from the Senator from North Dakota is, we are not suggesting anything that gets purchased isn't FDA approved. It has to be an FDA-approved drug. That is what the language in his amendment says. Yes, that is true; that is what the language of his amendment says. But the practical way it works is the FDA can't assure you, the American customer, my constituents, they can't assure that customer who goes to Canada the product they purchase in Canada is FDA approved, is the FDA-approved drug it says it is because the FDA has no ability to monitor that drug in Canada. In the United States, it can absolutely guarantee if you buy--the Senator from North Dakota has been using the example of Lipitor--if you buy a bottle of Lipitor, that it is going to be Lipitor. But if you buy that bottle and you cross the border and bring it back into the United States, the FDA has no way of knowing or being able to manage the question of whether that is the drug that is supposed to be in that bottle. That bottle can be bottled in a way that puts a drug that has been adulterated into the bottle and then claim to be FDA approved. That is not a projection. In fact, that is exactly what is happening today. Yesterday, for example, the FDA put out a press release citing the fact that there are 24 pharmacies that are online today people use in America that are not American pharmacies, that are international, and they now have absolutely firm evidence those pharmacies, or the group of pharmacies, the group that manages those pharmacies, is selling drugs representing that they are one type of drug but actually what is being delivered is something entirely different. In some cases it was just starch. It wasn't a drug at all. Even though it was claimed to be an FDA-approved drug, with the certification on it, with the batch number on it, with the expiration number on the package, it turned out it was starch. In another instance it turned out it was an entirely different component than the drug which was allegedly being sold, which could do significant harm to you if you took it. In fact, we have innumerable anecdotal examples of people being harmed by purchasing drugs both over the Internet and by crossing the border because those drugs turned out to be fabrications. They turned out to be counterfeit. They turned out to be basically fraud on that consumer. So the purpose of the FDA is to ensure that doesn't happen. What this language says very simply is, the FDA will assure that doesn't happen by giving the authority to the Secretary to make the decision--the same authority asked for by President Clinton and his Secretary of Health and Human Services--to make the determination as to whether a drug coming into this country through reimportation is safe and effective. That is what we charge the FDA to do. To claim it is some sort of an attempt to undermine the purpose of keeping consumers safe is just the exact opposite of what it is. The purpose of this amendment is to make sure American consumers, when they buy a pharmaceutical, whether they buy it in the United States or whether they go over the border and buy it and bring it back into the United States, can be confident that pharmaceutical is safe and effective as determined by the FDA. So it is extremely reasonable language. It is not language that was proposed, as was represented by the Senator from Vermont, by the Bush administration as a stalking horse for the drug industry. It is, in fact, language which was proposed by President Clinton, President Clinton's Secretary of Health and Human Services, supported by them. They asked for the authority, and it is now the same position which has been taken by this administration, the Bush administration. Mr. President, the Senator from Georgia has been very courteous in allowing me to go forward and taking this time before he and the Senator from Arkansas were to speak. So at this time I will reserve my comments and yield the floor so the Senator from Georgia can take his time.

Mr. GREGG

Mr. GREGG. Mr. President, I join with the ranking member of the HELP Committee--the Health, Education, Labor, and Pensions Committee--in raising the concerns and agreeing with the concerns he has raised about the reimportation proposal which has come forward from the Senator from North Dakota, which has been debated on this floor a number of times. The issue, of course, is the safety and efficacy of products which Americans buy. The FDA has been given the responsibility and has executed that responsibility extraordinarily well to make sure when an American citizen buys a pharmaceutical product or a medication, it is what it says it is and it does what the doctor prescribes. If you start buying medications internationally, you are in the position where you have no capacity for the FDA to monitor that purchase. So the drug may be represented to be an FDA-approved drug, but it could easily not be. In fact, case after case has been discovered of adulterated and changed medication coming into this country under the representation the medication which is being purchased is medication which has been approved by the FDA. So you are basically opening up a massive loophole in the area of safety for the American citizenry. Now, the demand for this comes from the cost of the drugs. People want to be able to go across the border to Canada, which is obviously a very sophisticated nation, and buy a pharmaceutical product there, which costs significantly less than the same pharmaceutical product may cost in the United States. That is a natural instinct of the market economy and of people. But critical to this exercise, of course, is the ability to get a safe drug. If you go across the border, and you buy a pharmaceutical product which is alleged to be one thing, and it turns out to be another thing, the damage it causes you is going to be economically much more significant than the savings which you may have accomplished by purchasing that drug across the border. Also, it should be noted that with the Part D pharmaceutical program which we now have relative to Medicare, the pressure--because pharmaceutical products are now insured and people receive them under the insurance plan as created under the Part D program, which has been an extraordinary success to supplying pharmaceuticals, though its cost remains extraordinarily expensive for the next generation of Americans--but pharmaceutical products are now available under an insurance program to most American seniors, and, as a result, if you are a senior, one of the people most likely to use a large number of drugs, and most often are on a fixed income and have problems purchasing drugs as a result of the fixed income situation--those issues were addressed by Part D to a large degree relative to the senior purchasing drugs; and it did create the ancillary problem of creating a huge cost which has to be borne by the next generation--but relative to the supplying of drugs, the pressure which was forcing people to take the chance of purchasing a drug internationally has been relieved to some degree, significantly in the area of senior citizens. I proposed language which would create a safe pharmaceutical approach, where you would create an Internet pharmacy approach, where you would create a regime under the FDA where people could go on the Internet and buy pharmaceutical products knowing they have been approved by the FDA. Today, unfortunately, that is not the case. If you go on the Internet, and you purchase something through a pharmaceutical firm off the Internet, you do not know whether that product--even though it may be represented to be FDA-approved--is FDA-approved because there is no way to certify the site you are purchasing from is an FDA-approved supplier. So this reimportation bill is essentially going to create an atmosphere where those Internet pharmacies are going to become basically the ``wild west'' of supplying drugs in this country, and you are going to see people going on to these Internet pharmacy sites and purchasing drugs they think are being represented as an American- approved drug that has been reimported--and is at a lower price--but may actually be a totally adulterated drug which will do significant harm to you. We have seen instances of that already--dramatic instances. Case after case has been reported of people being significantly harmed and in some instances dying as a result of buying pharmaceuticals off the Internet that turned out not to be what they were represented to be from international sites. So at a minimum, this reimportation proposal, which has received significant support in the past because it has a motherhood name on it--even though it might be actually creating significant problems for children and for other people in this country as a result of the risk it puts people at--at a minimum, this proposal should be subject to creating some sort of a regime where FDA has the ability to monitor and to approve and to make available to the public the knowledge that Internet pharmaceutical sites have been approved by the FDA. That is what my amendment does. It tries to address that. So we should not move forward precipitously in the way that is proposed by the Senator from North Dakota. We should not be supporting this simply because it has a nice name on it and because he can hold up two bottles which are the same drug but costs differently in a managed economy in Canada and a market economy here in the United States. We should, rather, set up a structure where FDA can be sure that when you buy that pharmaceutical product through an Internet site that is international or from a Canadian pharmacy, that you are getting what they claim you are getting, so when you take that drug, you benefit from it and are not harmed by it. This all, however, gets to a bigger issue. Probably, there is not time right now to go into it in depth. But the bigger issue is, where do pharmaceutical products come from? Where do all these amazing products, the biologic products that are saving lives in this country and are creating such a much better lifestyle come from? Remember, they do not come from trees, and they are not grown in North Dakota in the sugar beet fields. They are developed through processes which involve years--years of investigation and research. The average pharmaceutical product in this country takes 12 years and $800 million to bring to the market. Think about that: 12 years and $800 million before you can produce a product Americans can take. That is a pharmaceutical product. If you are getting in the biologics area, which is a much more complicated area, it takes even longer. It is even more complex, and in many instances it is even more expensive. It is these products that are changing the life expectancy of people and making the quality of life of people so much better. We have basically gone from a medical regime in this Nation where invasive action was always the first call, was always the first event, where you basically went under the surgical knife, to a regime where you are given pharmaceuticals or biologics to try to address a very serious illness. It is a huge step, an exponential step in the direction of better health care and a better lifestyle for Americans and for the world. Where are these products developed? Well, they are developed here in the United States. Why are they developed here in the United States? Why are almost all the major pharmaceutical breakthroughs and all the biologic breakthroughs coming in the United States? Because we have a market system which allows people to take the risks to develop those products. We do not fix prices, as they do in Canada or in England, at a rate that is so low that nobody would be willing to invest in developing that product because the return on that investment is too low. We allow people who make the investment, who take the risk, who put the 12 years in, who invest $800 million, to get a reasonable return on their investment and on their effort. As a result, we have the explosion in advances in technology, in medical technology, in biologics, and in pharmaceuticals. It is a result of the fact that people who want to take that risk, and who have the ability to pursue that type of opportunity to make life better for people by creating these pharmaceutical products and these biologic products, have the capacity to get resources to do it. It is called capital markets. Now, capital does not flow for goodwill. People do not invest in things because it makes them feel good, in most instances. People invest where they are going to get the best return on the dollars they invest, or a reasonable return on the dollars they invest. So we have to maintain an atmosphere in this country where people are willing to put money--cash, capital resources--into the investment and research and development of pharmaceutical and biological and device products. But if you listen to the other side of the aisle, almost every proposal they come forward with seems to be of the view that these products are grown in some wheatfield in North Dakota, that they do not take any effort, that they do not require any capital, they do not require any expertise, research, or time. All they require is to be price fixed, to be limited in their ability to be distributed relative to the price that is charged. Time and again, the other side of the aisle has come forward with proposals which basically undermine the incentive for capital to flow into these research areas. Believe me, if capital is disincentivized from going into these areas because they do not get a reasonable return, they will go somewhere else--they will go into developing software, into gaming, into whatever it is that happens to give them a reasonable return, into investing in some other country's activities in some area. Capital does not flow out of goodwill into pharmaceutical production, into biologic production, into device production. It flows into those accounts because they expect a reasonable return. Now, sure, the countries of Canada, England, and the European common market, to some degree, are living off of the fact that we give people a reasonable return on our pharmaceuticals and biologics in this country. That is absolutely true, and it is reasonably disgraceful. In fact, in Canada, they threaten to take people's patents away if they don't--they basically capture American patents if they don't sell these drugs at a price which nobody would have invested in them in the first place to produce them were the price fixed at that level. But that is their policy. Now, we could subscribe to that policy, which is what the other side of the aisle wants us to do. They proposed it in Medicare negotiations, they proposed it now and passed it here in the child drug review. They proposed it in this reimportation, and they proposed it in the negotiated language relative to Medicare, and in biologic generics. In all of these areas they are basically saying: Well, drugs must appear in the marketplace. We don't have to be concerned with the fact of getting capital into the investment exercise. We don't have to be concerned with the fact that it takes years and years to research these products and hundreds of millions of dollars to bring them to the market, they just appear. We can basically, for lack of a better term, kill the goose that is laying the drug or the biologic or the pharmaceutical or the device that is saving people and not worry about it. Well, that is not true. If you were to follow all of the proposals from the other side of the aisle, or even a significant amount of them, we would see investment in this area start to dry up. We would see a contraction of the production of pharmaceuticals that save lives, of biologics that save lives, of devices that save lives. We would see fewer and fewer of those coming to the American people and to the world because people wouldn't invest in that activity any longer, or the investments would be significantly curtailed because money would flow in other directions. This concept of the marketplace totally escapes the other side of the aisle. This concept that drugs have to actually have some flow of capital behind them to be produced because it takes so long to get them to the market, and it takes so much money to actually research them-- and that is especially true in biologics and equally true in devices. It totally escapes the other side of the aisle. Their idea is, we have a good line, we have a motherhood statement, let's let people go buy the drugs somewhere else at a price that is fixed at which nobody would have ever produced the drug in the first place if that was the price. Let's negotiate so we have a regime of price setting at the Federal level, which basically eliminates the capacity for that drug to be competitive. Let's create a biologic generic which basically wipes out the capacity of the true biologic to actually come to the market and be successful. Let's create an atmosphere where testing on children of the drugs will basically not have a fiscal return which will make it worthwhile to test them on children. Let's do all of those things in the name of the motherhood language of getting a better price for drugs for Americans, ignoring the fact that what you are actually going to end up doing is dramatically limiting the number of drugs coming to the market for Americans, and therefore significantly impacting the quality of life of Americans and our ability to advance the dramatic and revolutionary activity that we are seeing in bringing biologics to the marketplace, which are basically curing and have the potential to cure diseases which have been extraordinarily threatening to the American population for so long. It makes no sense, if you look at the substance of the issue, what they are proposing. It is totally inconsistent. They are saying they are doing this to help people. What they are actually ending up doing is harming not only the people of today who won't be able to get the drugs because they won't be produced but people in the future because the drugs won't be brought to the market. There is a blindness to the fact that market forces are at work. I guess it is just a function of the fact that you want to get out a good press release, so you are going to send it out. Of course, anybody who takes the position I just outlined is immediately demagogued, and the pejorative tool of the drug industry is thrown out there. Well, I am hardly that, since I was one of the few people in this Chamber who actually aggressively opposed and tried to stop the Medicare Part D Program, which was the biggest windfall the drug industry ever got and which was voted for by many of my colleagues on the other side of the aisle and which ended up putting an $8 trillion bill which is unpaid for onto our children's future. More importantly, the reason I take the position I take is because I believe very strongly that America should not give up its lead in one of the industries where it is at the cutting edge and where it is producing jobs and where it is producing the intellectual capital that is going to keep us a vibrant, strong economy. In addition, we should not give up an industry or undermine an industry and geniuses and creative individuals who are producing products which are saving lives and are giving people a better livelihood. So I am not going to sign on to these various jingoistic proposals which are brought to the floor for the purposes of putting out good press releases about how I did this or that for motherhood at the expense of undermining the quality of care for future generations by basically limiting dramatically the ability of people to get capital who want to be creative, who want to invest, and who want to do research in the area of producing biologic products, pharmaceutical products, and medical devices. That is why I take the position I take, to say nothing of the fact that if you start haphazardly importing products from the Internet and from countries such as Canada, as strong as Canada is, without any FDA oversight or approval of those products, you are going to harm a lot of people at the end of the day. A lot of people are going to be hurt, and some people are going to die as a result of buying products which have not gone through FDA approval and which are not subject to FDA oversight because they are bought from a pharmacy or a provider in Canada, and that product may have come out of India or it may have come out of Afghanistan. It may have come out of Pakistan. It may be adulterated, and it may kill. The same can be said by a factor of 10 relative to purchasing on Internet pharmacies. So there are some big issues at play. There are big issues at play relative to the future of the health of Americans on the issue of importation, on the issue of negotiation and Medicare, on the issue of biologic generics, and on the issue of making sure that children are adequately tested relative to the application of drugs which are brought to the market. There are big issues relative to safety and big issues relative to whether this country remains on the cutting edge of producing products that help people and give them a better lifestyle with a biological, pharmaceutical, or medical device. We shouldn't just pass these proposals willy-nilly for the sake of putting out a nice press release. Mr. President, I yield the floor.

Mr. GREGG. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GREGG. I understand the Senator from Oklahoma wants to go into morning business to make a statement. I ask unanimous consent that after he has completed his statement, that I be recognized for purposes of offering my Internet pharmacy protection and safety bill to the underlying bill.

Mr. GREGG. Madam President, I understand that I may go forward. I appreciate the courtesy of the Senator from Massachusetts. Amendment No. 993 (Purpose: To provide for the regulation of Internet pharmacies) Madam President, today we have been discussing, at some depth, and appropriately so, how to protect American citizens who purchase drugs overseas--from overseas pharmacies or from Canadian pharmacies--or purchase drugs on the Internet. This is a very significant issue for Americans, especially as more and more Americans use the Internet for the purposes of buying all sorts of items, including pharmaceuticals. So we need to be sure this extraordinary regime we have set up in this country stays intact that allows a person, when he or she goes into an American drugstore or goes into an American supermarket, to be fairly confident the product they buy is not adulterated and the product they buy is what it says it is and that in the instance of a pharmaceutical or a medication, it is going to be what the doctor told them to take. That has been one of the great successes of American Government. It is because the Food and Drug Administration is overseeing this effort to protect the food supply and the pharmaceutical supply. Whether the Food and Drug Administration has the wherewithal, the legal ability, and the technical and physical ability to protect an American who buys an overseas product, a medicine, and imports it into the United States is very much an issue. The FDA is very concerned about their capacity to police effectively drugs coming into this country, especially over the Internet. So I have an amendment to this bill which basically is the Safe Internet Pharmaceutical Act, the purpose of which is to give the FDA the authority necessary to protect people who are buying pharmaceutical products over the Internet. This is, in my opinion, very important. The importance of this has only been further stressed and exemplified by a warning that came out today, fortuitously, from the FDA on the issue of Internet pharmacies. I want to read extensively from this warning because it goes to the essence of the debate we have heard on the floor, especially from Senators supporting the proposal from the Senator from North Dakota relative to reimportation and safety and their representation that it is safe to buy over the Internet and that their amendment will make it legal to buy drugs from outside the United States over the Internet through their reimportation language. This warning from the FDA states as follows: ``FDA Warns Consumers about Counterfeit Drugs from Multiple Internet Sellers.'' I am going to read quite a bit of the text because I think, first, it is so on point and it is so important: The Food and Drug Administration (FDA) is cautioning U.S. consumers about dangers associated with buying prescription drugs over the internet. This alert is being issued based on information the agency received showing that 24 apparently related Web sites may be involved in the distribution of counterfeit prescription drugs. On three occasions during recent months, FDA received information that counterfeit versions of-- I may not get all these medical terms correct, but I hope I do. On three occasions during recent months, FDA received information that counterfeit versions of Xenical 120 mg capsules, a drug manufactured by Hoffmann-LaRoche Inc. (Roche), were obtained by three consumers from two different Web sites. Xenical is an FDA-approved drug used to help obese individuals who meet certain weight and height requirements lose weight and maintain weight loss. None of the capsules ordered off the Web sites contained orlistat, the active ingredient in authentic Xenical. In fact, laboratory analysis conducted by Roche and submitted to the FDA confirmed that one capsule contained sibutramine, which is the active ingredient in Meridia, an FDA-approved prescription drug manufactured by Abbott Laboratories. While this product is also used to help people lose weight and maintain that loss, it should not be used in certain patient populations and therefore is not a substitute for other weight loss products. In addition the drug interactions profile is different between Xenical and sibutramine, as is the dosing frequency; sibutramine is administered once daily while Xenical is dosed three times a day. Other samples of drug product obtained from two of the Internet orders were composed of only talc and starch. According to Roche, these two samples displayed a valid Roche lot number of B2306 and were labeled with an expiration date of April 2007. The correct expiration date for this lot number is actually March 2005. Pictures of the counterfeit Xenical capsules can be seen on the Web site at FDA. I would note they look exactly like the Xenical that is legitimate. We had a Senator here earlier holding up two prescription bottles of, I think it was Lipitor, saying: These two bottles are exactly the same, and one could be bought in Canada for about a third of what it costs in the United States. Well, you can buy this Xenical over the Internet for probably about a third of what it costs in the United States. The only problem is it might kill you. I am going to read further: Roche identified the two Web sites involved in this incident as brandpills.com and pillspharm.com. Further investigation by FDA disclosed that these Web sites are two of 24 Web sites that appear on the pharmacycall365.com home page under the ``Our Websites'' heading. Four of these Web sites previously have been identified by FDA's Office of Criminal Investigations as being associated with the distribution of counterfeit Tamiflu and counterfeit Cialis. At this point, it appears that these Web sites are operated from outside of the United States. Consumers should be wary, if there is no way to contact the Web site pharmacy by phone, if prices are dramatically lower than the competition, or if no prescription from your doctor is required. As a result, FDA strongly cautions consumers about purchasing drugs from any of these Web sites which may be involved in the distribution of counterfeit drugs and reiterates previous public warnings about buying prescription drugs online. Then it lists the 24 Web sites, and some of them have very seductive names: ``Pharmacea.org,'' ``MensHealthDrugs.net,'' ``MediClub.md''-- very seductive names, in order to draw people into purchasing drugs on these sites. Madam President, I ask unanimous consent that this press release from the FDA be printed in the Record.

Mr. GREGG. It is, of course, ironic that in the middle of this debate over how you make safe drugs that Americans are purchasing, and assure that the FDA has the proper oversight, that the FDA would be issuing this warning. It is a coincidence. The FDA did not do it because we are in the middle of this debate. They did it because they had received the necessary information to fairly well substantiate that at least in three incidents the medication that was purchased was not the medication that was approved by the FDA, even though it was represented as that medication, even though it came in a bottle that looked exactly like that medication, even though it had a tamperproof seal, and it had a label and a date as to when that medication would expire and a lot number. So it certainly looked legitimate. So this just confirms the concern which many of us have that we have to set up a regime where the FDA can properly review what is happening relative to drugs that are being purchased over the Internet, especially. It is not impossible to do that. In fact, it is very doable. That is why I will offer this amendment. The amendment I will offer basically sets up a system whereby the FDA will require that pharmaceutical products sold over the Internet be subject to the jurisdiction of the United States and that they get an FDA seal of approval which is tamper-proof. So if a citizen wants to use a pharmaceutical site, he or she can go on line and call up a pharmaceutical site, such as drugs.com or whatever--that may actually be a site, so I probably shouldn't use that term--but a site where you think you can purchase drugs at a better price than what you are going to have to pay for them somewhere else, they will see on that Web site a seal like the Good Housekeeping Seal of Approval, only it will be a tamper-proof seal which will reflect the fact that the FDA monitors that site, monitors that pharmacy. Also, the pharmacy has subjected itself to American jurisdiction, so that if there is an illegal act, they can be prosecuted, or if there are issues of liability, they can be sued; also, that there is contact information which is based in America relative to that and that there is a searchable database where you can go in and find out what that pharmacy has done in the past relative to its prescription-filling activity. This would all be supported by a fee system which gives the FDA the resources to accomplish this type of monitoring. It really seems like the most logical thing to do. There is no way you can stop the imagination and desire of the American people to get the best price. That is part of the essence of our character. So it is reasonable that Americans are going to use online pharmacies, but we have to make sure we have a system where we do not have one approval process for legitimate purchasing of drugs through pharmaceutical activity at your local pharmacy and then another process for purchasing drugs which has absolutely no oversight from the FDA if you purchase on the Internet. We have to make sure that if you are using an Internet site, the site has been subject to the same review as the local pharmacy down at the corner is subject to, relative to the quality and management of that pharmaceutical product they are selling. That is what this amendment does. I hope no one will object to it, but I know other people will. But they shouldn't because this is really something whose time has come. So I am going to offer this amendment tonight. It is timely, of course, in light of this FDA warning which says there are potentially 24 Web sites they have identified, at least 3 of which are selling adulterated drugs, that they know of, which could seriously harm and possibly, if taken in the wrong dosage, since they aren't the proper drug, actually do more than just harm you, they could permanently injure you. In light of that warning which came out today, it is totally reasonable and appropriate that the Congress should certainly, if it is going to do a drug safety bill relative to the FDA, include in it an Internet pharmacy safety regime which will give the American people some confidence that when they go on line to purchase a drug on line, the site, the portal they are purchasing it through, is subject to FDA review and the drug they are purchasing is an FDA-approved drug, which is made clear by having this tamper-proof seal of approval. It would also reflect the fact that the FDA actually has physical oversight over that pharmacy, that online pharmacy, and gives the FDA the resources to do that oversight. You can't just say: Go and do it, if they don't have the money to do it; you have to give them the resources to do it. In addition, it sets up a one-stop shopping site at the FDA where people can go on line to the FDA site, check out that Internet pharmacy, if they wish, and make sure the Internet pharmacy does qualify and does carry FDA-approved drugs. I think it is a very proper approach. It is something, as I mentioned, which is clearly timely in light of this FDA warning. Madam President, at this time, I ask unanimous consent that the pending amendment be set aside and that I may call up amendment No. 993 and ask for its immediate consideration.

Mr. GREGG. I ask unanimous consent that the reading of the amendment be dispensed with.