Mr. Chairman: We have always worked well together on patent, copyright, broadcast and other high technology issues.

It was not that long ago Mr Chairman, when you and I, and the Committee hit a hi-tech home run with passage of three major bills of enormous importance to consumers.

In one fell swoop we provided consumers with local-into-local satellite television, protected important patent rights and terms, and enhanced electronic commerce and trademark protection. In light of the testimony we will hear today, I hope that we can work together and quickly report out a bill which I introduced last Congress, and reintroduced this year (S. 754) called the "Drug Competition Act."

My bill – Senators Kohl, Schumer, Durbin and Feingold are cosponsors – will put a stop to secret agreements made between drug companies which hurt our senior citizens and American families, cheat healthcare providers and inflate Medicaid and Medicare costs.

I am pleased that the Attorney General from Utah is here to talk about this harm to families in his and other states – and the legal action brought by him and 14 other states including Vermont. I note that General Shurtleff’s prepared testimony says that "I think a much more reasoned approach of requiring notice . . . along the line proposed in S. 754 is worthy of close consideration."

I want to thank the General and I also want to thank the Federal Trade Commission – they deserve a lot of credit for exposing this problem.

Under my bill there will be no more secret deals to keep generic drugs off the market – because any agreements have to be immediately provided to the law enforcers: the FTC and the Justice Department.

My bill represents a huge deterrent to making illegal deals in the first place. Any such deal will be subject to immediate investigation and action by the Federal Trade Commission, or the Justice Department.

This solves the most difficult problem faced by federal investigators – finding out about any improper deals.

This bill does not change the so-called Hatch-Waxman Act, it does not amend FDA law, and it does not slow down the drug approval process. It allows existing antitrust laws to be enforced because the enforcement agencies have information they need.

A New York Times editorial published last July, "Driving Up Drug Prices," mentioned that the FTC "is taking aggressive action to curb the practice. It needs help from Congress to close loopholes in federal law."

My bill provides that help by slamming the door shut on would-be violators by exposing the deals to our competition enforcement agencies.

Congress should make sure that the FTC and Justice look at every single deal that could lead to abuse so that only the deals that are consistent with the intent of the law will be allowed to stand. Mr. Chairman, I hope you and everyone on this Committee can support this effort so that we can try to pass this bill without objection.

Under current law, manufacturers of generic drugs are encouraged to challenge weak or invalid patents on brand-name drugs so that consumers can enjoy lower generic drug prices.

Current law grants these generic companies a temporary protection from competition to the first manufacturer that gets permission to sell a generic drug before the patent on the brand-name drug expires.

This approach then gives the generic company a 180-day headstart on other generic companies.

That was a good idea – the unfortunate loophole exploited by a few is that secret deals can be made that allow the manufacturer of the generic drug to claim the 180-day grace period – to block other generic drugs from entering the market – while, at the same time, getting paid by the brand-name manufacturer to not sell the generic drug.

The bill will close this loophole for companies who want to cheat the public, but keeps the system the same for companies engaged in true competition with each other. This bill would give the FTC or the Justice Department the information it needs to take quick and decisive action against companies driven more by greed than by good sense.

I think it is important for Congress not to overreact in this case and throw out the good with the bad. Most generic companies want to take advantage of this 180-day provision and deliver quality generic drugs at much lower costs for consumers. We should not eliminate the incentive for them.

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