David Pryor

Mr. PRYOR

Mr. PRYOR. Mr. President, seeing no other Members of the Senate seeking recognition at this time, I would like to ask unanimous consent that I may be allowed to speak as in morning business, not to exceed 12 minutes.

Mr. PRYOR

Mr. PRYOR. Mr. President, when we in Congress voted on the GATT treaty recently, we all knew that we were breaking down trade barriers and leveling the playing field in international trade. Make no mistake, I believe that Americans will benefit from this agreement when it is implemented in June. But never, Mr. President, in our wildest dreams or imagination, would we have ever thought we were voting to give special treatment and a $6 billion windfall to the prescription drug industry on one hand and higher drug prices to American consumers on the other. Yet that is exactly what is happening. Mr. President, here is what has happened to bring us to this point today. Last year, the United States agreed under GATT to a new patent law, good for 20 years from filing. Our old patents were for 17 years, the effective date from their date of issue. We also agreed under GATT to give existing patents the longer of the two patent terms. This extension applies to all industries. At the same time, we knew that generic companies of all kinds all over America had already made significant investments based upon old patent expiration dates. These companies were prepared to introduce their competitively priced drug products just as the brand-name monopolies end. We did not want to jeopardize the jobs and the factories which were at stake. So we decided under GATT to adopt a formula under which these generic companies could proceed with the introduction of their products if they paid the patent holders ``equitable remuneration'' for the period of time left on their patents. Mr. President, here is where this story really begins. It just so happens that over 100 prescription drugs now protected by patents will be getting extra patent life under GATT. For example, Glaxo's patent for the world's best selling drug, Zantac, would have run out December 5, 1995, but will now last until 1997. Generic drug companies have already spent millions of dollars to prepare to market lower cost, equivalent drugs on that date, giving consumers of America a tremendous price break. But a small handful of brand-name pharmaceutical companies have objected. They are saying, ``Thank you for the extra patent life. We really appreciate that part of GATT. But you should know there is an obscure provision in U.S. drug law which we think protects us from the rest of the GATT treaty. We are sorry our generic competitors have invested heavily in their business, but they do not deserve the protections that are rightfully theirs under GATT. So we guess we will not have any competition for quite some time.'' Administration. The pharmaceutical manufacturers have even threatened litigation against the Food and Drug Administration. I am deeply concerned, Mr. President, because if they get their way at this time, they gain a multibillion dollar windfall--alone among the dozens of other industries and thousands of other companies complying rigidly with the GATT treaty. Even worse, consumers now are going to have to pay double for these drugs. They will have to pay twice, Mr. President, as consumers and as taxpayers. The Federal Government and the State governments are going to pay an extra $1.25 billion for prescription drugs for older Americans under Medicare, veterans, low-income families and children, as well as the active duty military. That will come out of our tax dollars. The American taxpayers will thus be paying more taxes so that a few brand-name drug companies can make more profits and block competition in the marketplace-- forcing the American consumer to continue paying the highest drug prices in the world today. Most important, I think, will be the effect on older Americans, Americans on fixed incomes, and Americans without adequate health insurance. They will feel the hurt of these soaring drug prices even more. Mr. President, this chart is fascinating because it demonstrates very clearly that two of our best-selling drugs on the market are about to run out of patent protection, and should have generic competition by the end of this year. Zantac, for example, is the leading drug for ulcers. It is manufactured by Glaxo. For a typical 2-month supply, the brand-name is $180. For a generic supply of 2 months, the cost is about $90. What we are going to see is, under GATT, an unintended consequence. Glaxo is going to receive a 19-month extension on their patent. This drug's price is not going to go down. There will be no generic competition with Zantac. We will see Zantac continue to soar in price. In fact, Glaxo is anticipating over a $1 billion windfall, because of this unintended consequence in GATT. Do you think this brand-name drug, Zantac, is going to go down in price? Last year, Zantac's price grew 1\1/2\ times faster than inflation. The price for Zantac since 1989, only 6 short years ago, has increased 40 percent. What do you suppose is going to happen to that price if Zantac gains more than a year and a half of additional uncontested market exclusivity? Mr. President, the intent of GATT, of course, was not to harm American consumers. The goal was to improve their standing in the world economy. The prescription drug marketplace today is one area where the American consumer has been particularly exploited as we have historically paid the highest price for drugs while subsidizing lower drug prices for consumers around the world. This is why five of my colleagues and I have written to the Food and Drug Administration, asking the Food and Drug Administration to make the right decision--and that right decision is to allow generic drugs to come to the marketplace, offering competition to brand-named drugs which are about to receive an enormous unexpected and undeserved windfall. This is a textbook case of a loophole resulting in an unwarranted windfall. No single industry deserves special treatment under GATT and today the pharmaceutical manufacturers of brand-name products are getting that special treatment at the expense of the American consumer. Should the Food and Drug Administration fail to provide the proper solution to this problem, I will immediately proceed with legislation to remedy this economic and this moral wrong. And I am hopeful my colleagues will join me. Mr. President, I ask unanimous consent that an article appearing in Business Week magazine dated May 15, 1995, be printed in the Record, as well as letters to Dr. David Kessler, Commissioner of the Food and Drug Administration, from consumer, patient, health care, and trade groups supporting our concerns. These groups include the National Organization for Rare Disorders; Families USA and the Gray Panthers; AmeriNet, of St. Louis, MO, and Premier Health Alliance, of Westchester, IL; the National Association of Chain Drug Stores and the National Pharmaceutical Alliance.

Mr. PRYOR

Mr. PRYOR. Mr. President, I thank the Chair for recognizing me and I thank the distinguished managers for allowing me to speak. Mr. President, this morning's Washington Post and many television and radio news programs throughout America and perhaps the world, reported on what I would like to call a portrait in courage, and the person standing tall in that portrait was none other than former President George Bush. Like many of my friends and family in Arkansas, former President Bush is a gun enthusiast. He is a long-time member of the National Rifle Association. But like many other NRA members, President Bush was deeply offended by a recent NRA fundraising letter signed by Mr. Wayne LaPierre, the NRA's executive vice president. The LaPierre letter referred to several law enforcement officials: ``Jack-booted thugs who harass, intimidate, even murder law-abiding citizens.'' The NRA referred to Federal agents ``wearing Nazi bucket helmets and black storm trooper uniforms to attack law-abiding citizens.'' This irresponsible, inflammatory NRA fundraising letter incited the former President of the United States to the point that he wrote NRA President Thomas Washington to resign his NRA membership. Former President Bush's letter reads as follows: Your broadside against Federal agents deeply offends my own sense of decency and honor and it offends my concept of service to our country. President Bush continues in his letter: It indirectly slurs a wide array of government law enforcement officials who are out there day and night, laying their lives on the line for all of us. Mr. President, I am asking unanimous consent that an excerpt from the story in the Washington Post about President Bush resigning his membership from the National Rifle Association be printed at this point in the Record.

Mr. PRYOR

Mr. PRYOR. Mr. President, I rise today to discuss a matter that receives far too little attention here in Washington, but is of vital importance to all of our States. I am speaking about the surplus property donated by the Federal Government to various entities. As my colleagues know, once a Federal agency has decided that a desk or a computer or some other item of personal property has been declared ``excess'' to that agency, that piece of property is then offered to other Federal agencies for their use. If no other Federal agency has a need for that property, then the surplus property can be donated to the States or other entities for their use. In 1992, 603 million dollars worth of surplus property was sent to the States. Mr. President, the surplus property that goes to our States is very important to local jurisdictions throughout the country. For example, the State of Arkansas has received high quality equipment that enables local jurisdictions to fight forest fires, carry out rescue operations, and repair State and county highways. In each and every State, this surplus property, from trucks to air compressors, provides critical equipment to help jurisdictions to carry out their programs. Furthermore, the local jurisdictions receive this equipment at a vastly reduced rate which provides some much-needed financial relief to their budgets. However, as a result of years of legislation amending the property disposal program, States are being denied some useful and desirable surplus property. While these legislative initiatives were well- intended, they changed the priorities and placed other entities at the front of the line, limiting the property available to States. For example, in 1986, the Defense authorization bill contained a provision that permitted the Pentagon to make some of its excess supplies available for humanitarian relief. Originally, this program was designed to assist the refugee and resistance groups in Afghanistan. While this program had a very modest beginning, and involved only 4 million dollars worth of property the first year, which was mainly clothing, this program has grown rapidly. Some 25,802 items, worth $227 million, were shipped in 1993. Today, our States are concerned that they are losing opportunities to bid on Federal surplus property. While none of our States object to shipping surplus blankets and food items to needy people, this program has expanded and now includes heavy construction equipment as well. These road graders, front loaders, and pick-up trucks were bought and paid for by U.S. taxpayers, but our States did not even get to look at them. This is the type of surplus property that the States would very much like to receive. Mr. President, I share the concern of our States about this program. While I am glad that our Nation can assist refugees around the world with blankets and surplus food, I think the time has come to examine this donation program. A program that began by shipping clothes to one or two countries now involves hundreds of millions of dollars worth of items going to 117 countries. We already have a number of foreign-aid programs and I do not think we should operate yet another one out of the Pentagon. Furthermore, Mr. President, I have heard of sketchy reports that quite often this excess equipment is not being used by the recipient country. There are basically two ways that this well-intended program may be abused. First of all, this equipment can be sold immediately by the recipient nation. Instead of being put to good use, this valuable equipment can be sold and the money spent on anything the recipient nation wants. Second, there have been reports that some of this heavy construction equipment is sitting idle due to the lack of skilled mechanics and the resources to repair it. I have been disappointed to discover that despite these reports, there has been no comprehensive review of the final end-use of this equipment. Today I am writing to the Inspector General at the Pentagon to ask her to fully investigate this program to determine if these reports are factual. Another provision of my legislation addresses another program that has caused concern in many of our States. In 1990, the Congress passed a provision that permitted DOD to make available to certain African countries property for use in the preservation of wildlife. While everyone wants to help preserve elephants, the States have a legitimate question as to why does this program receive a higher priority than the interests of U.S. taxpayers? The simple solution is to put the States first. My legislation would allow the States to take a first look at this surplus property to see if they can use any of it. Then, and only then, it could be shipped to help preserve African wildlife. Mr. President, the legislation I am introducing today returns to the basic principal of the fair and equitable distribution of surplus Government personal property. While there are many worthy entities interested in this property, I think it is time to again put our States first in line. My bill puts States at the head of the list before the Humanitarian Assistance program at the Department of Defense and the Foreign environmental protection program; ensures the State agencies for surplus property are part of the process in the Small Business donation program; repeals the authority for the Department of Energy to dispose of personal property outside of the regular process involving the State agencies; allows DOD to continue to donate surplus small arms and ammunition to local law enforcement agencies while excluding surplus motor vehicles from the program; and requires the General Services Administration to review the entire range of surplus personal property programs to determine how effective these programs are, the amount of property donated through these programs, and to suggest any legislative recommendations to improve the process and ensure the States participation in this process. GSA, in the course of its review, will not be able to limit the access of local communities impacted by the closure of a military base. Mr. President, I think it is time to put our States first in line when it comes to receiving surplus property. My bill does just that and I urge my colleagues to support it. I ask unanimous consent that the bill and a summary be printed in the Record. I also have a letter from Mr. Gerald Marlin, manager of Federal surplus property in Arkansas that I ask unanimous consent be printed in the Record.

Mr. PRYOR

Mr. PRYOR. Mr. President, recently I announced that I was not going to be seeking another term in the Senate. It has been a wonderful opportunity these last 16\1/2\ years to serve in this great body, to be serving with all of my great colleagues and friends from all the 50 States, and all the wonderful staff people that make this place run. I just want to thank all of them so much for their many kindnesses shown to me. Mr. President, I was cleaning out my desk a while ago and just looking through something I have had in my desk for some time that was prepared by some of the individuals, I think, in the Historian's office. That is not the proper name for those who prepared this. But I thought while there were interested parties involved, I might read a few pages of some of the history of the desks in this Chamber. This is a brief history. When British troops burned the U.S. Capitol in 1814 during the War of 1812, they severely damaged the Senate Chamber and destroyed the original furnishings. The rebuilt Chamber was completed in 1819 and the Senate ordered 48 new desks at a cost of $34 each from Thomas Constantine. A New York cabinetmaker, he also constructed desks for the House of Representatives. Many of these early desks remain in use in the Senate Chamber today. As new states have entered the Union over the years, additional desks of identical design have been built and placed in use. Throughout most of the 19th century a senator's only office was his desk on the Senate floor, We did not have, I might say, the Senate office buildings. This was our office, the desk that was on the Senate floor. but gradually separate rooms were assigned. The earliest offices were Committee rooms occupied by their chairmen; additional space later became available under the Olmsted Terraces on the West Front of the Capitol. Finally, with the completion of the first Senate office building [the Russell Building] in 1909, all senators were able to occupy suitable offices on Capitol Hill. Over the years, modifications have been made to the Chamber desks to provide more room for books and papers. Beginning in the writing boxes were added to each desk. The writing boxes were not installed all at one time, but periodically over the next 40 years, usually at the request of a desk's occupant. Senate vouchers record payments to carpenter R. B. Griffin for altering nine mahogany desks in 1860, shortly after the Senate moved to its present Chamber. Not every senator preferred the modification, but today only one desk--``the Webster--lacks a writing box. Senator Daniel Webster reputedly refused to have his desk added to on the grounds that if his predecessor had managed without the extra space, so could he. No succeeding occupant of Webster's desk has seen fit to abandon that opinion. In order to bring the height of the Webster desk into visual line with others in the Chamber, a raised base has been added. Although he was born in New Hampshire, Webster represented Massachusetts in the Senate, and the desk has continued to be associated with Webster's birth state. New Hampshire Senators Styles Bridges and Norris Cotton, for example, occupied the desk for long periods. In 1974, just before Cotton retired from the Senate, he secured the adoption of Senate Resolution 467 (93rd Cong., 2nd sess.), specifying that the Webster desk would henceforth always be assigned to the senior senator from New Hampshire. Other early Senate desks bear design characteristics that allow their differentiation. The oldest desks incorporate wooden inlays of circular and rectangular banding at the sides, crotch veneer mahogany across the fronts, and narrow reeding on the feet. These features were incorporated in desks newly-made throughout the third quarter of the last century and may today be found in more than seventy of the present number. The difference in shape and dimension among the desks is due to the original semicircular arrangement in the Old Senate Chamber. Not this Senate Chamber, but the Old Senate Chamber. A desk's shape conformed to its position in the room: if on the aisle it was narrow and angled, if near the center it tended to be wider and more square. If the oldest desks could be rearranged to the original configuration, it is believed they would form a perfect semicircle. During the mid-19th century, mahogany shelves were added near the bases of the desks. At the turn of the 20th century, the feet were enclosed with a metal grille and connected to a plenum chamber below the floor which provided ventilation. That, Mr. President, was the air-conditioning system. We have a much better air-conditioning system now than they had then. Inkwells and sanders atop the desks have also undergone change. Original inkwells were composed of clear cut glass, covered with square, flat tops that moved horizontally. In 1933, the remaining original inkwells were replaced by containers having hinged covers, because the earlier design was no longer manufactured. Over the years the desks have been periodically rearranged, as new states sent senators and as party representation increased and diminished. When additional desks were required, these were generally made by private cabinetmakers, although the four newest desks--those constructed for Alaska (1959) and Hawaii (1960)--were built in the Senate's own cabinet shop. Seven distinct numbering systems have been employed over the years to track the expanding group of desks and their locations. These numbers--both Roman and Arabic--are still visible below and inside the desks in various places. The current system, instituted in 1957, consists of Roman numerals burned into the right-hand corner of the principal crosspiece beneath the desks. The desks are not arranged on the Senate floor in numerical order. The easiest method of tracing the heritage of each desk is to read the names carved inside desk drawers. Now, in earlier years, the Members of the Senate carved their names in the desk drawers. I hate to say that in modern times I have looked in my desk drawer and some of the occupants of this desk even wrote their name, it appears, with a ball point pen. That is not quite as classy as carving. It appears that such inscriptions are a 20th-century tradition, for the earliest recorded names date back only to the first decade of this century. Possibly some 19th-century senators inscribed their names in the desks, but these names have been lost when drawers were refinished. Not all names in drawers were personally inscribed by the senators. Many reveal an identical hand, suggesting either that older drawer bottoms were replaced and the names recopied, or that staff members, rather than senators, took responsibility for chronicling certain holders. In recent decades, senators have adhered more closely to a tradition of personally inscribing desks. One difficulty in verifying the desks' 19th-century assignees is the fact that for many years Senate doorkeepers closely guarded such privileged information. Isaac Bassett, Senate page and doorkeeper from 1831 through 1895, feared that souvenir hunters might damage the historic furniture if it was widely known which pieces were used by the famous Senators Clay, Calhoun, or Senator Webster. Bassett the page and the doorkeeper had reasonable cause for alarm. In April 1861, when the Sixth Massachusetts Regiment was bivouacked temporarily in the Senate Chamber, literally living in the Senate Chamber, Bassett entered the room just in time to hear the sound of splitting wood on the Democratic side. Rushing to investigate, he found a Union soldier bayonetting the desk recently vacated by Jefferson Davis, then president of the Confederacy. ``Stop! Stop! What are you doing?,'' Bassett shouted. ``That is not Jeff Davis' desk--it belongs to the government of the United States. You were sent here to protect government property, not to destroy it.'' Today, a small block of wood inlay on the left side of the desk marks the spot where the bayonet once struck the desk of Jefferson Davis. Traditions associated with Senate desks continue to evolve. A recent example is the so-called `Candy Desk''. Each member of the Senate knows which desk is the candy desk. Senator George Murphy (R-CA) originated the practice of keeping a supply of candy in his desk for the enjoyment of fellow senators. This desk was subsequently passed on to other members for use, but the tradition of keeping candy in the desk that occupies that particular place in the back row of the Chamber continues today. The custom of dividing the arrangement of Senate desks by party is almost as old as the parties themselves. Democrats traditionally sit on the presiding officer's right; Republicans on his left. But the division has not always been definitive as it is today. In the Old Senate Chamber, an equal number of desks was placed on each side of the aisle, without regard to party size. When one party elected more than half the senators, some majority party members had to find space on the minority side. When the Senate moved to the modern Chamber in 1859, the practice of dividing the desks equally continued for several years. But during the Civil War many Southern Democrats withdrew from the Senate and Republicans took their places on the Democratic side, even though empty desks were available on ``their own'' side. The new Chamber was large enough to permit a somewhat flexible seating arrangement and in 1877 the practice began of moving desks back and forth across the center aisle to permit all majority members to sit together on the appropriate side of the aisle. From time to time since then, one party has elected such an overwhelming majority that it has become necessary to again have majority members sit on the minority side. For instance, during the 60th Congress (1907-1909) ten Republicans sat on the Democratic side, while during the 75th Congress (1937-1939) thirteen Democrats sat on the Republican side. Such seating became known as the ``Cherokee Strip,'' meaning that the overflow of majority party senators were ``off their reservation'' [the Cherokee Strip in Oklahoma was land belonging neither to the Indian Territory nor to the United States]. By then it had become the practice for senior senators to take front row, center aisle seats; junior majority party members who filled the ``Cherokee Strip'' were assigned either rear row or end seats on the minority side of the chamber. Senators independent of either party have traditionally chosen on which side of the aisle they preferred to sit. Once, during the 1950s, when Senator Wayne Morse of Oregon had left the Republican party but not yet joined the Democrats, he placed his chair temporarily in the middle of the center aisle in order to demonstrate his independence. The seating of the majority and minority leaders at the front row desks on either side of the center aisle is a relatively recent Senate tradition, dating back only to 1927 for the Democrats and 1937 for the Republicans. In the 19th century, party leadership was not yet institutionalized. Certain senators were recognized as leaders for reasons of personal popularity and political skill, not elected to an official post by their parties. For example, Henry Clay always occupied a rear seat near the Chamber entrance. From that position he was able to signal party members as they came in before a vote, while vigorously denying the role of party floor leader. Not until the 1890s did party caucus chairmen emerge as floor leaders and for the most part such leaders retain regular seats. Front row desks went to senior senators in the party. For many years, the front seat on the Republican side was held by Senator Robert La Follotte, Sr., an insurgent who was frequently at odds with his party's majority. Two earlier Democratic leaders, John T. Morgan, in 1902, and Oscar W. Underwood, in 1921, took front row desks, each retaining that position after his service as leader had end. Not until Underwood left the Senate did Democratic minority leader Joseph Robinson move to the front row desk, which he continued to hold as majority leader. Following Robinson's death, the desk went to his successor majority leader, Alben Barkley. The desk has been used by Democratic leaders ever since. On the Republican side, the front row desk was held by senior senators until 1937, when minority leader Charles McNary moved there, setting a precedent that continues today. Mr. President, the actual office that prepared this report, and it was done in February 1995, was the Office of Senate Curator. I want to thank the Senate Curator for preparing this report. Also, in the back of this report, it gives a history of desk No. 39. This is Senators who have occupied this particular desk. I just want to name a few of these. Some of these names may stand out. John Bankhead from Alabama occupied this particular desk. John Bankhead lived over on 19th Street, right off of Dupont Circle. John Bankhead was the father of Tallulah Bankhead. Tallulah Bankhead was one of the grand actresses during that period of time, and they lived on 19th Street, where I used to live. Now, also, Patrick McCarran of Nevada occupied this particular desk, No. 39. He was the author, I assume, of the McCarran-Ferguson Act, which many people will recognize. Theodore Francis Green, of Rhode Island, occupied desk No. 39. Theodore Francis Green may have been--I do not know, that record may have been broken--but at one time he was the oldest Member to ever serve in the Senate. That may have been surpassed. I need to check and correct it. But he was the chairman of the Foreign Relations Committee immediately preceding the chairmanship of Senator J. William Fulbright of the State of Arkansas. Another very illustrious individual who has occupied desk 39 is Estes Kefauver, from Tennessee, known for his coonskin cap and all his grand campaigning as he ran for President and as he ran for Vice President. He really was a major force in the 1950's in the Democratic Party and in American politics. Another great Senator who has occupied desk No. 39 is Henry M. ``Scoop'' Jackson, of course from Washington State, who passed away just a few years ago. He truly was one of the giants of the Senate. He occupied desk 39. Frank J. Lausche, from the State of Ohio, occupied this desk, desk No. 39. For some of you who may not know, Frank J. Lausche, to the best of my recollection, served more terms as Governor than any other Governor elected in the history of America. I think he was Governor of his State for--it seems like well over a decade and perhaps even close to 2 decades, in the State of Ohio. Mr. President, some of this may not seem too important to a lot of people, but there may be some students around who someday would want to know more about the Senate Chamber and about the desks in the Chamber. As Senator Rockefeller and Senator Coats and myself take our constituents through the Capitol and sometimes sit with them in the galleries, sometimes people ask us about the aisle, where do the Republicans sit and where do the Democrats sit? And so we thought it might be a good time to put a little statement in the Record giving a little, brief history about this Chamber and some of the desks that make up this wonderful U.S. Senate Chamber. Mr. President, I see no other Senator seeking recognition. I yield the floor and suggest the absence of a quorum.

Mr. PRYOR

Mr. PRYOR. Mr. President, I am sorry I have to do this, but in behalf of another Senator who could not be here at this time, I do object.

Mr. PRYOR

Mr. PRYOR. Mr. President, first I would like to thank my very good friend, my long-time friend and distinguished colleague from Utah, Senator Hatch. Senator Hatch and I have worked on this proposal for a long time and we are very proud today to be able to introduce it as a bill and to also announce our 23 cosponsors from each side of the aisle in support of the S Corporation Reform Act of 1995. Senator Hatch has been, certainly, a teacher for me in this whole process. I thank him. He has been a great ally. Truly, serving on the Finance Committee together, working with this legislation and working with a number of colleagues that we have in support, and also the number of organizations that I will list in a moment, we think truly in 1995 we can make this reform of S corporation law become a reality. This legislation is truly the culmination of the efforts of many, many individuals and groups. It is a bipartisan effort, and certainly represents, I think, a step that Congress can and should take in order to capitalize on one of our country's most valuable resources, small business, as Senator Hatch has just so eloquently stated. I want to thank all of the businessmen and women, attorneys, accountants, and small business organizations who have worked with me and my staff to help us to understand the unique problems of subchapter S corporations. They have helped us arrive at solutions that we think are easily administered and targeted to encourage economic growth. The interest and enthusiasm for this effort is of special mention. At this date, the bill is endorsed by the : Members of the S Corp Subcommittee of the American Bar Association's tax section; the U.S. Chamber of Commerce; National Federation of Independent Businesses Small Business Legislative Council; American Institute of Certified Public Accountants; American Vintners Association; American Consulting Engineers Council; and Contractors; Associated Equipment Distributors; National Association of Life Underwriters; National Association of Realtors; National Association of Wholesale-Distributors; National Business Owners Association; National Society of Public Accountants; and the S Corp Reform Project. Mr. President, these fine organizations we think represent hundreds of thousands of businesses across this country that will be impacted in a good way across our country. It is quite a team, and a team that I think is very rarely put together. It is quite a team that has worked thoughtfully and diligently, and I must say, patiently, through this system to help produce a bill that Congress can pass and we should pass overwhelmingly. Mr. President, I would like to point out to my colleagues that I introduced similar legislation in the last session of Congress. On November 19, 1993, S. 1690 was introduced with our former colleague, Senator John Danforth, who retired from the U.S. Senate. Working together, we were joined by a strongly bipartisan group of 40 of our colleagues who cosponsored that bill at that time. Today, once again, I am so proud to be able to join my friend and colleague, Senator Hatch, with whom I very much look forward to working in order that we might take the next step and move this bill into law. The S Corporation Reform Act of 1995 contains 27 provisions designed to usher sub-S corporations into the financial environment of the 1990's. Subchapter S was first enacted in 1958. In fact, I think it might have been about the year that the distinguished occupant of our chair was born. On that particular date that subchapter S was passed into law, it was enacted to remove tax considerations from small business owners' decisions to incorporate. This tax treatment has proved helpful to small business over the years, especially to startup businesses, to new businesses. But subchapter S, as originally enacted in 1958, was very limiting and contained a large number of pitfalls. Today, hundreds of thousands of U.S. businesses are S corporations. These businesses are still subject to many of the oppressive restraints which date back to its original enactment in 1958. Mr. President, it goes without saying that times have changed a great deal since that year. The financial environment is far more complex than the 1950's. Sub S limitations restrict growth opportunities, and frankly sub S needs an overhaul, and it needs an overhaul now. This legislation we think is the overhaul we need. It is an overhaul that is doable. It is an overhaul that can give a boost to our economic recovery by creating more opportunities for capital growth and jobs throughout every segment of American economic activity. Mr. President, these objectives are met by this legislation in ways that have been carefully thought through. There may well be other ways to encourage these goals that Senator Hatch and I share this afternoon. But I hope and expect my colleagues respectfully will come forward with their ideas should they see areas where we might improve upon this proposal. I look forward to this dialog. I urge my colleagues to examine this bill closely and to join with Senator Hatch and myself in this effort. Mr. President, I ask unanimous consent that a copy of a summary description of the major provisions of this bill be printed in the Record.

Mr. PRYOR

Mr. PRYOR. Mr. President, I see no other Senator seeking recognition at this time. Therefore, I yield the floor. I suggest the absence of a quorum.

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

Mr. PRYOR

Mr. PRYOR. Mr. President, I can remember about 35 years ago when I was first elected to a position of State representative of Ouachita County. During my first term in office, I first heard of the National Rifle Association. I would like to tell you about it, if I might. Over one weekend during that first term of my first session, a young child, 5 or 6 years of age, in a grocery store parking lot saw a gun rack in a truck in the next vehicle, got out of his parents' car while they were in the store, got into the truck, took the rifle from the gun rack and killed himself accidentally. The town became very upset, and they asked me to see if there was anything we could do about it. I introduced the next week, at the behest of the Arkansas Game and Fish Commission, with the support of law enforcement officials throughout the State, a very simple proposal that said something like this: That no automobile--truck or car--in the incorporated city limits of any community in our State of Arkansas shall be able to carry a loaded shotgun or a rifle. Pretty simple. It passed 99-0 in the house of representatives. It went to the State senate and, Mr. President, that is when I first heard of the National Rifle Association. All of a sudden, throughout America, there was a bulletin that Representative Pryor is trying to take your guns away in the State of Arkansas, and if this happens, it is going to happen all across the country and we need to stop it now. Needless to say, Mr. President, my bill did not become law. It died in the State senate of Arkansas. I remember still getting hundreds of telegrams and letters from all over our country protesting this legislation. But there is one I especially recall, one specific letter I received during that battle. It was from a former college roommate I had from the University of Arkansas, and it went something like this: Dear David, I never knew all that time that I was your friend and roommate at the university that you were a Communist. Well, Mr. President, that is what we have today--the selling of fear. It is continuing and it must stop. I am hopeful, Mr. President, that the membership of the National Rifle Association will question some of the positions of its leadership in attempting to sell fear at this most incendiary time in our Nation's history. Mr. President, I ask unanimous consent that the letter from Mr. LaPierre be printed in the Record.

Mr. PRYOR. If I might say, I appreciate the Senator's remarks.

Mr. PRYOR. When President Clinton recently issued a warning against intemperate speech, Mr. President, a lot of people took those remarks as an attack on radio talk show hosts. But I would like to point out that the talk show hosts by no means have a corner on that market, and that we should all focus our attention on the rhetoric that is used by certain public interest groups and ourselves alike when we try to raise money through the coffers of public interest groups for our political campaigns. I would particularly, Mr. President, like to call your attention to a recent letter issued by the National Rifle Association under the signature of its executive vice president, Wayne LaPierre. This 5-page poison-pen letter is a revolting example of hateful, incendiary, irresponsible speech. It seeks to whip the readers into a frenzy against the Federal Bureau of Alcohol, Tobacco and Firearms. Mr. President, this letter is obscene. While the ostensible purpose of this letter is to raise money for the National Rifle Association, it may well have the unintended and unfortunate side effect of stoking the fires of militant groups across this country of whom our citizens now have cause to fear. In his letter, Mr. LaPierre says that the Federal ban on semiautomatic weapons ``gives jack-booted Government thugs more power to take our constitutional rights away, break in our doors, seize our guns, destroy our property, and even injure or kill us.'' Mr. LaPierre further continues in his letter: In Clinton's administration, if you have a badge, you have the Government's go-ahead to harass, intimidate, even murder law-abiding citizens. Randy Weaver at Ruby Ridge . . . Waco and the Branch Davidians . . . Not too long ago, it was unthinkable for Federal agents wearing Nazi bucket helmets and black storm trooper uniforms to attack law-abiding citizens. Not today, not with Clinton. In another part of the letter, Mr. LaPierre warns that what he sees as the attack on the second amendment to the Constitution ``is only the first in a long campaign to destroy the freedoms at the core of American life.'' The letter continues: You can see it when jack-booted Government thugs, wearing black, armed to the teeth, break down a door, open fire with an automatic weapon, and kill or maim law-abiding citizens. Mr. LaPierre calls for a ``major show of force'' by America's 80 million gun owners. Mr. LaPierre concludes: This, the battle we're fighting today, is a battle to retake the most precious, the most sacred ground on Earth. This is a battle for freedom. Well, Mr. President, these are very stirring words indeed, and I am sure it has been quite a success for the national fundraising activities of the National Rifle Association. It has been a great fundraising tool. I noticed yesterday that Mr. LaPierre told a reporter, and I quote, ``the last thing the NRA wants is a fight with the ATF.'' Mr. President, I would be hard pressed to conclude that, based upon the incendiary, obscene nature of this letter that Mr. LaPierre sent across our country. Let me make it very clear that I am not today blaming the National Rifle Association for the explosion in Oklahoma City, but I am suggesting that I think that any reasonable person would conclude that the words Wayne LaPierre has been using, the images he has been conjuring up has played directly into the fears that exist in the types of groups that apparently are responsible for the bombing and other terrorist attacks. In that regard, the paid lobbyists and the chief fundraiser for the National Rifle Association have been tossing kerosene onto the fire. The leaders of the National Rifle Association must realize that these words have consequences and rights are accompanied by responsibilities. A loose tongue, Mr. President, can be just as dangerous as an unholstered gun when either is employed by an irresponsible person. The National Rifle Association takes great pride in touting its programs to train responsible gun owners. I hope that its leadership today will now realize the need to teach and practice itself the responsible use of free speech. Before the folks at the National Rifle Association start accusing this Senator of trying to take away their first amendment rights, as well as their second amendment rights, let me make it very plain that I have no intention of taking action to forcibly muzzle any of them through any action by the Congress of the United States. I am not questioning the right of the NRA to say what it wishes in its fundraising letters. But I do believe, Mr. President, that Wayne LaPierre should be absolutely ashamed of what he has written in this letter to his members of the National Rifle Association. Just because in our society one might have the right to do something or to say something does not mean that he should say it. Just because one has the protection of the first amendment in our Constitution is no reason amendment. Politicians and lobbyists, unfortunately, have relied much too heavily on the language of hyperbole to claim its share of the marketplace of ideas. This letter, written by the executive vice president of the National Rifle Association, is certainly not the only instance of hyperbole and the National Rifle Association is certainly far from its only practitioner. Mr. President, I today am not attacking the members of the National Rifle Association, but I cannot believe--knowing many good members of that organization--I cannot believe that the National Rifle Association members support their organization, their leadership demonizing a Federal law enforcement official or an agency. Mr. President, how much time do I have, I might ask?

Mr. PRYOR

Mr. PRYOR. Mr. President, I thank the Chair for recognizing me.

Mr. PRYOR

Mr. PRYOR. I cannot figure out for the life of me who over here is slowing down the defense supplemental appropriations bill. Could you name anyone who is slowing down that particular bill over here?

Mr. PRYOR. Does the Senator from Mississippi yield for a question?

Mr. PRYOR. We have been overly anxious to get that bill out and get it sent to the President. We are anxious to get this bill acted upon. All last week, we were involved basically with an amendment offered by a Republican Senator, our friend Senator D'Amato, from New York, relative to Mexican aid. We have been trying our very best to start voting on some amendments offered on this side, and we have yet to have been afforded that opportunity.

Mr. PRYOR. Mr. President, I thank the Chair. (The remarks of Mr. Pryor pertaining to the introduction of S. 687 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. PRYOR. Mr. President, I ask unanimous consent that I may speak as in morning business.

Mr. PRYOR

Mr. PRYOR. Mr. President, I rise today to introduce the Child Support Enforcement Act of 1995. This bill is modeled after the bipartisan approaches contained in child support enforcement legislative proposals of last year. The problems that we currently face in this area have been well researched and analyzed in a recently released report, written at my request, by the General Accounting Office [GAO]. One of the most telling facts in the GAO report is that the national child support enforcement caseload grew 180 percent between 1980 and 1992. This statistic speaks volumes. In 1994, the 15 million support cases nationwide represent a significant portion of our neediest families. If the estimated $34 billion that is owed these families could be collected, the taxpayers would receive some much needed relief as a result of the corresponding reductions that would be possible in many welfare programs. Mr. President, I held a hearing on child support enforcement last July to try to better understand why this money is not being collected. This hearing lead me to conclude that until we improve the way the system works at the local, State, and Federal levels we will never be able to ensure that children receive the financial support from their respective families to which they are entitled. There were many issues raised in the hearing that are worthy of attention, but one I wish to especially highlight is the caseload of most of the State workers who are trying to help custodial parents collect their payments. One witness, a caseworker from Virginia, testified that she could only spend about 12 minutes a month with any one client. Mr. President, 12 minutes a month is simply not enough time to effectively deal with all of the complex issues involved in these cases. Another witness was Ms. Judy Jones Jordan, the administrator of the Child Support Enforcement Program in Arkansas. My State is indeed fortunate to have an outstanding administrator of such a critical program. She testified that the system had bogged down. Rather than having a clear mission, the State programs are subject to so much Federal oversight that getting the job done has become almost impossible. She said: The program has changed from one designed to assist families and reduce the cost of public assistance programs to one focused on passing audits and avoiding Federal penalties. Mr. President, the legislation I am introducing today is an attempt to address the problem identified by Ms. Jordan. In a country where the default rate on used car loans is 3 percent and the default rate on child support orders is nearly 50 percent, we need to greatly improve the way that the partnership between the Federal Government and the States works. This legislation that I am introducing addresses the key issues that I think will make a significant difference in the operation of the child support system. First, the Federal audit requirements will be revised so that they become a far less onerous burden on the States. In fact, I believe the new procedures will transform this process into a helpful and necessary evaluation that will provide the States with useful information on the effectiveness of their program while ensuring accountability of Federal dollars. The second thing that my legislation would do, is the funding system will be modified to address the GAO's finding that the present system does not provide incentives to States for improving the performance of the program. Third, the legislation will require States to suspend drivers licenses and other licenses, both professional and recreational, of parents who are delinquent in their child support payments. My State of Arkansas has found that this program is very effective in encouraging noncustodial parents to promptly pay their child support obligations. Finally, the legislation attempts to address the difficult issue of the overburdened case workers in of the State child support offices. The Department of Health and Human Services and the States will sit down together and determine the level of staffing necessary for each State to effectively carry out its child support program. It is my hope that with the benefit of this joint effort, the State programs will then be able to at least partially address this critical area. Mr. President, while personal responsibility is the key to taking care of children, it is my belief the Government has a limited but important role to ensure that it is easy for noncustodial parents to fulfill their duties, and difficult for them to avoid it. Mr. President, I ask unanimous consent that additional material be printed in the Record.

Mr. PRYOR

Mr. PRYOR. As I said at an Agriculture Committee hearing, I am also very troubled by the House efforts to cut child nutrition programs. The worst aspect of their bill relates to efforts to give these drug companies the opportunity to increase their profits at a high cost to poor pregnant women and children. The Senate reports show the efforts drug companies have exerted over the years to sell formula at a high cost to WIC. Since WIC is 100 percent federally funded, the Federal Government should insist that it get the best return on each dollar spent. Competitive bidding, which is used by the Federal Government for much of its procurement, should be required as under current law. Clever efforts to hide profiteering under the cloak of weakened, so-called cost-containment measures, will hurt the WIC program in my State, and throughout the Nation. I know the drug companies may already be celebrating, but the Senate took the lead in the past in standing up to these corporate interests. I believe that despite all the money spent by the drug companies to influence opinion, the Senate will do the right thing.

Mr. PRYOR. Mr. President, I rise today in support of restoring $104.2 million to the Department of Defense accounts that are used to fund the cleanup and redevelop of closing military bases. These funds were authorized and appropriated by Congress last year and they now are subject to a possible rescission. Mr. President, less than a month ago the Secretary of Defense announced the 1995 hit list of military base closings. This list recommended closing 25 major bases. Communities with bases on this list are currently working to convince the independent Base Closure Commission to remove their hometown bases from the list and to spare them the economic trauma of a base closing. Unfortunately, many of these communities will be unsuccessful in their efforts to save the base. In the first three base closure rounds, in 1988, 1991, and 1993, the Commission approved the closing of approximately 85 percent of the recommended bases. These first three base closure rounds produced the closing of 75 major military installations and over 200 smaller installations nationwide. Each of these communities are now focusing on beating swords into plowshares. And to its credit, the U.S. military is trying to do its part to quickly cleanup these bases and prepare them for civilian use. Mr. President, many have argued in the past that the federal government should not help beat swords into plowshares--that we do not have a responsibility to help the workers and communities that proudly supported our bases for decades. However, we can not and must not turn a cold shoulder to those who helped us win the cold war. To be certain, base closings hurt. Communities that lose a base lose much more than just the daily sights and sounds of the military's presence. They lose the heart and soul of their local economy. In many cases, the military is the largest employer in the region. As my colleagues know, closing military bases causes an immediate economic trauma in these communities. But some good news is beginning to arise in a few of the towns that lost bases in the early rounds. Lost military jobs are slowly being replaced by civilian employment. The private sector is moving in and jobs are being created at many old bases. The local communities that are experiencing an economic revival have told us that their successful efforts to beat swords to plowshares were made possible only because the federal government, specifically the U.S. military, decided to become a partner in this worthy effort. In helping communities rebound, the military services are focused on quickly cleaning up contaminated portions of the closing bases so private sector businesses can move in and begin creating jobs. In order to quickly prepare closing bases for redevelopment, the DOD's base closure accounts, or BRAC accounts, must be fully funded. It would be shortsighted to rescind funds for closing bases, especially given that the Base Closure Commission is currently preparing to add more bases to the closure list. Cutting funds from the DOD base closure account will slow down the process of returning these bases back to the communities. By doing so, we would substantially damage the economic development efforts of base closure communities nationwide. on the Senate Appropriations Committee, to restore $104.2 million to the DOD BRAC accounts. amendment no. 577

Mr. PRYOR

Mr. PRYOR. Mr. President, I ask unanimous consent that I may speak as if in morning business.

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

Mr. PRYOR

Mr. PRYOR. Mr. President, a year ago we were in the midst of a momentous debate in this institution over the reform of our Nation's health care system. At that time, one of my concerns was that dramatic changes were taking place in the prescription drug marketplace. A number of prescription drug manufacturers had begun to experience competitive pressures arising from the growth of generic drugs and managed care. But disturbingly, one of their strategies was to coopt or, if possible, eliminate the sources of that competitive pressure. In the days that have followed, we have seen some extraordinary changes in the drug marketplace. There has been a wave of multibillion dollar mergers and acquisitions which, according to a recent issue in the Wall Street Journal, ``promises to create industry giants.'' This remarkable consolidation has profound consequences for American consumers. A few days ago, in fact it was April fool's day to be exact, the Associated Press reported that corporate merger activity broke all records last year and extended its frenetic pace into the first quarter of 1995--with the drug industry leading the way. Mr. President, in the past 3 months alone, the drug industry by itself has carried out some $23 billion in mergers and buying out their competition worldwide. We read just the other day, for example, about Glaxo's $14 billion hostile takeover of Burroughs Wellcome, both major drug giants. This deal will create the world's largest pharmaceutical company, in the wake of other giant deals like Hoechst's anticipated $7.1 billion purchase of Marion Merrill Dow, American Home Products' $9.7 billion buyout of American Cyanamid and Hoffmann-La Roche's $5.3 billion acquisition of Syntex. Brand name companies have also been investing heavily in biotechnology, generic and over-the-counter drug companies. Ciba purchased a $2 billion stake in Chiron, and SmithKline Beecham recently just bought Sterling for $3 billion. Hoechst spent a paltry half a billion dollars on a generic company called Copley. These are remarkable figures, Mr. President. And if we simply add up the cost of just a sampling of some of these recent mergers and acquisitions, we will find that they total $54 billion. In the last 15 months, $54 billion has been spent by giant pharmaceutical companies buying up and acquiring their competition. That is an interesting figure when we compare it to the research and development that is planned by the entire prescription drug industry for the year 1995: $14.9 billion major pharmaceutical companies in acquiring their competition since the beginning of last year. That is three and a half times what the entire industry is going to spend in research in 1995. This is an extraordinary difference. One would think that such large deals would leave these companies either in debt or strapped for cash. Mr. President, that is not so. These companies are so profitable and their pockets are so deep, Wall Street's Standard & Poor's concluded just a few days ago that the industry's ability to ``generate cash in excess of ongoing needs is likely to continue.'' And their generating that cash is going to continue because the consumer in the United States is going to continue paying the highest drug prices of any major country in the world today. This is a far cry from the recent past. We may recall that just a year ago the industry was sounding the alarm about declining profits and research cutbacks. These companies claimed that they were under siege and out of favor with investors. A year and a half ago, these same companies warned that research would be choked off by health reform. This is a statement by Merck in 1993: ``R&D will fall at least $2 to $3 billion over the next 5 years.'' Well, today, Mr. President, we are hearing a different story. This year, Bear Stearns says earnings growth will be ``the best we have seen in years'' for the drug industry. They are out spending $54 billion on mergers and we have to wonder how serious the threat to research ever was. Well, Mr. President, why are they spending all of this money to buy their competition? Why are these mergers taking place? Let us look a little deeper. Last month, the CEO of Glaxo put it quite simply. His company is trying to do ``nothing more than to wrench market power back from the administrators and the distributors who now hold the health care purse- strings.'' His company is responding to competitive pressures by focusing on its research portfolio. But what if the brand name companies owned those administrators? What if the brand name companies owned those distributors? What if they not only wrench that market power back--they buy it outright? Who will hold the health care purse-strings at that time? This is exactly what we are facing today in the United States. The drug industry's acquisitions have not been restricted to brand name or biotechnology companies. They have also included the country's largest pharmacy benefits management companies. We call these companies, PBM's. We are going to hear a lot in the future about PBM's. What is a PBM? A PBM is hired by HMO's, by health plans, by major corporations, and by self-insured companies to administer their prescription drug programs. PBM's act as a buying agent in negotiating with the drug manufacturers, seeking deep discounts for their clients and in developing cost-saving formulas for their covered patients. They may also deliver medicine to patients through selected pharmacies or through mail-order. In rapid succession, these PBM's have been snapped up by some of the biggest drug companies in the world. Only 2 years ago, April 1993, the PBM market was completely independent of the pharmaceutical manufacturers. Only 24 months later, in April 1995, SmithKline Beecham- Diversified, Merck-Medco, and now Eli Lilly-PCS would dominate 80 percent of the PBM market. This is vertical integration, as clear a case as I have ever seen. Merck paid $6 billion for Medco Containment Services, one of the largest PBM's and distributors of drugs. SmithKline Beecham bought Diversified Pharmaceutical Services for $2.3 billion. Today, Eli Lilly is, as we speak, ready to close on acquiring a company called PCS, the Nation's largest PBM company, for $4.1 billion. The prescription drug marketplace is being revolutionized. Before too long, there may only be a handful of major drug companies left. The major manufacturers of prescription drugs in this country are soon, Mr. President, going to have a lot less competition. This kind of vertical integration between large manufacturers and distributors, however, is unprecedented. We can see what has happened in the last 24 months. It has had very different implications for consumers than the horizontal mergers and acquisitions so prevalent in today's headlines. If Lilly is permitted to purchase PCS, the three largest PBM companies will belong to brand name drug companies that research, manufacture, and distribute drugs. These three PBM companies serve 94 million covered lives--80 percent of the total PBM market. A handful of drug companies will wield tremendous influence over which drugs are used by millions of American citizens. They will have the raw power-- and they will use that power--to restrict access to needed medicines. They will possess a large share of the mail order drug business. They will exercise decisive leverage over their competitors' access to the marketplace. This is why, Mr. President, these PBM's are being bought by the major manufacturing firms. They provide market power to a select few companies, precisely when the market has shifted beneath their feet. Owning a PBM can switch sales to your own drugs. Owning a PBM can counteract the bargaining power of managed care. Owning a PBM can determine which generics you sell: your own or your competitors'. Mr. President, in short, ownership of PBMs by brandname manufacturers destroys all competition. The brand name companies now admit it. In 1993, Merck said it expected to sell more drugs to Medco after it bought out the PBM. Merck's CEO at that particular time felt the company had to be in a position where ``We can be sure that we control the flow of our own drugs.'' In fact, at one point last year, Lilly and PCS had agreed to make PCS's previous owner, McKesson, the sole distributor of Lilly drugs. This is growing evidence that these manufacturer-owned PBM's are doing what one would expect. They may no longer act as honest brokers. They may now be acting in the interests of their parent companies, not their clients. They may be favoring their parent companies by switching patients from one drug to another without explicit regard to their health. Mr. President, these charges have been filed with the Federal Trade Commission. The FTC has heard from a wide spectrum of citizens, consumer groups, trade associations, manufacturers, distributors, Federal agencies, and Congress on this issue. The FTC has even heard these concerns from the brand-name companies who do not own PBM's or who are not about to own PBM's. As a result, the Federal Trade Commission is still reviewing the Lilly-PCS proposed acquisition and has reopened its investigation of the Merck-Medco and SmithKline- Diversified deals. I have written on two occasions to the Federal Trade Commission about these concerns. On the first occasion, I was joined by my former colleague, the distinguished Senator from Ohio, Senator Howard Metzenbaum, who then chaired the Antitrust Subcommittee of the Senate Judiciary Committee. Our feeling at that time was that the Lilly-PCS merger would lay the capstone of an uncompetitive marketplace. There were already indications that the other two deals had eroded competition. In November, the FTC confirmed our suspicions and proposed a consent order which established strict conditions over the Lilly-PCS deal. In the next several weeks, the FTC will either approve the consent order, revise the consent order, or seek an injunction blocking the acquisition. The FTC is not alone in its scrutiny of these manufacturer-PBM deals. It is the Food and Drug Administration's responsibility to ensure that prescription drug marketing is fair and accurate. When the Lilly-PCS deal was the subject of public comment, the Food and Drug Administration at that time expressed grave concerns over the potential for new forms of violative marketing and promotion. In fact, I recently read in the New York Times that the Food and Drug Administration has now had to warn Merck, SmithKline Beecham, and Eli Lilly ``not to put pressure on doctors to prescribe their drugs disclosures regarding the risks of adverse side effects.'' What does this mean? It means that if you are one of the millions of Americans covered by these PBM's, your doctor may no longer be receiving impartial advice about which drugs to prescribe to you. Let me raise another example of how improper marketing can degenerate into inappropriate care. Two months ago, Eli Lilly & Co. participated in a depression awareness program at a local high school. This story was published in February by the Washington Post. While sponsoring educational programs might be a laudable endeavor, the students in this particular school and the teachers were furious with the company for ``turning an educational program into an extended commercial.'' What was the particular drug that the drug company was pushing on the students? Mr. President, 1,300 students listened to company representatives pitch their drug, and then they received pens, pads, and brochures embossed with the product name. The product that we speak of is, of course, Prozac. Afterward, the principal felt that Eli Lilly ``shouldn't be pushing their drug program, especially not to children.'' One of the students explained, ``I was upset that I had to sit in an assembly for 45 minutes and listen to a plug for Prozac.'' Her mother added, ``The message my daughter came away with was pop a pill and everything is going to be all right.'' Let me say that Eli Lilly & Co. did apologize. They admitted their conduct was inappropriate. But imagine, if you can, the potential for such abuses when a manufacturer not only makes a drug, but they also market that drug, they advertise that drug, they influence HMO's to buy that drug, they collude with their PBM subsidiary to win contracts, and--if they have not gotten your business yet--they encourage the doctors with incomplete information to switch you, the patient, to their product. To add insult to injury, the consumer may also have to pay more for their prescription drugs. In our market economy, we all know that if there is no competition, we pay higher prices. Competition brings down prices. Competition is good for the consumer. Today, the major drug companies of America are buying up their competition and the consumer is going to foot the bill. If the PBM's have a vested interest in their owner's products, they will not necessarily be negotiating the best deal for their patients-- and this is taking place in the midst of the industry's best pricing environment in years. Look at what Wall Street is thinking. Analysts expect drug price increases to be ``faster in 1995 than in the preceding 4 years.'' I am deeply concerned about the impact of these acquisitions. There is growing evidence that the PBM companies no longer act as independent or honest brokers for their clients. They are going to be acting as brokers for their parent companies who pay the bills. This can only lead to inappropriate health care and to higher prices for consumers, who are already paying some of the highest prescription drug prices in the world. The FTC has now demonstrated due diligence in investigating the Lilly-PCS deal. The FDA has also signaled its concern over these marketing abuses. Consumers will undoubtedly benefit from this vigilance. In a textbook-perfect market, competition prevails and the consumer benefits without such scrutiny. But in the real world's imperfect markets, we must sometimes intervene. That intervention is necessary now to guarantee that true competition takes place. It is my hope that we can prevent the anticompetitive practices which I have just described this afternoon. Mr. President, I hope that we realize what is happening in the drug marketplace in the spring of 1995, and I only hope that we are not going to act too late. Mr. President, I see another colleague seeking the floor. I thank the Chair for recognizing me. I thank the Senator from Pennsylvania for his patience. I yield the floor.

Mr. PRYOR

Mr. PRYOR. Mr. President, I, too, would like to join my senior colleague, Senator Bumpers, in praising the great University of Arkansas team and also in congratulating the UCLA team for a magnificent job in winning the national championship. Mr. President, it has not been too long ago since basketball really come to the forefront in the Arkansas Razorbacks' territory. In fact, when I was a student in Fayetteville at the University of Arkansas, they almost had to force us to go over to the field house to watch the Razorbacks play basketball. Usually, those basketball games were on a Friday or a Saturday afternoon. But then along came some great coaches and ultimately some great teams, and finally the great support of the people of our State, equaling the support now, I think, of the Razorback football team; in fact, in some cases, even surpassing it. Last year, the Razorbacks, of course, Mr. President, were the national champions. This year, we were almost the national champions. We lost to a great team. Last night, throughout that game, I sat and watched as the momentum shifted back and forth between UCLA and Arkansas, and between UCLA and Arkansas again. I thought of the many thousands of hours of practice, commitment, that each of those players had committed to the splendid sport in this wonderful country of ours. Finally, Mr. President, I was taken not only by the fine comments of the coaches of both of those basketball teams--those glorious teams, I might add--I was also taken by the sportsmanship exemplified by all of the members of those basketball teams as they faced each other in a moment of true contest, in a moment of true testing of who was going to become the championship team of the United States of America. UCLA prevailed. We congratulate them. We say to the Razorbacks, thank you for a splendid season and thank you for making us a proud people. I yield the floor, Mr. President. Mr. KENNEDY addressed the Chair.