January 3, 1991 CONGRESSIONAL RECORD-HOUSE

By any measure, the Orphan Drug Act has

been a tremendous success. A total of 49 new

drugs for rare diseases have been approved

under this program, and 370 others are in the

development stage. These drugs have provided lifesaving treatments for such terrible

disease as enzyme deficiency, which affects

adversely the immune system of about 40

children nationwide. Until the orphan drug was developed to treat these children, they

had to spend their entire lives in the protection of an isolation bubble. One of the first

orphan drugs is another example of a triumph. The most difficult form of leprosy affects only 4,000 people. A drug known for over 14 years to be effective in treating this

condition was not being marketed by any

drug company, because it was considered unprofitable--until the Orphan Drug Act provided the marketing incentive. In a similar

manner, orphan drugs provide treatment for

terrible diseases for which there is usually no alternative therapy.

I have serious concerns about the effect

the H.R. 4638 would have upon the incentive

of drug companies to develop orphan drugs. I

believe we must not endanger the success of

this program, which is due to large measure to the existence of the "market exclusivity"

provision in the Orphan Drug Act that allows

companies to have exclusive marketing

rights to an orphan drug for 7 years. Weakening the current 7-year exclusivity provision

would certainly discourage development of

desperately needed new orphan drugs.

Under current law, firms may apply to develop the same orphan drug, but only the

first firm to have its drug approved receives

market exclusivity. The certainty of this 7-

year period is the basis of the economic incentive to attract drug firms to invest in orphan drugs.

The bill would make two major changes to

the market exclusivity provisions of the Orphan Drug Act. First, the bill provides for

"shared exclusivity." Firms that can demonstrate that they have developed the or- phan drug simultaneously would be allowed

to -share the market with the firm initially

awarded the market exclusivity. Second, the

bill requires the Food and Drug Administration to withdraw the marketing exclusivity

as soon as the patient population exceeds a 200,000 patient limit. Both of these changes

have the effect of weakening the marketing

incentives provided by the Act. Under the

bill, the length of the market exclusivity period will depend on how quickly the patient

population grows and whether other firms

file claims for simultaneous development.

In addition, as currently constructed, the

200,000 patient population limit would be applied to orphan drugs approved prior to the

enactment of the bill as well as to those approved in the future. This retroactive rule

change would send a troublesome signal to

all those who might wish to develop orphan

drugs that the Federal Government may

change unilaterally the rules for firms that

made investment decisions based on the expectation of 7 years of market exclusivity.

I am aware that this bill was passed after a number of compromises among Members of

Congress. I am extremely concerned, however, that individuals with rare diseases may

suffer because of changes that this bill would

make in the incentives to develop new drug

treatment. Accordingly, I am withholding

my approval of H.R. 4638.

GEORGE BUSH.

THE WHITE HOUSE, November 8, 1990.

H.R. 4653-MEMORANDUM OF DISAPPROVAL

I am withholding my approval of H.R. 4653,

the "Omnibus Export Amendments Act of

1990." Although this legislation contains

constructive provisions, it would severely

constrain Presidential authority in carrying

out foreign policy.

I agree with the principal goals of this bill,

which include improved export controls for,

and sanctions against the use of, chemical

and biological weapons; sanctions on Iraq;

missile technology sanctions; and reauthorization of the Export Administration Act. Indeed, I have recently signed into law provisions on missile technology sanctions and

sanctions against Iraq comparable to those

contained in this bill. H.R. 4653, however,

contains elements that I be,leve would undermine these objectives and our ability to

act quickly, decisively, and multilaterally at

a time when we must be able t) do so. These

provisions unduly interfere wih the President's constitutional responsibilities for carrying out foreign policy. Rather than sigrirg

the bill, I am directing action under existing

authorities to accomplish the bill's principal

goals.

I am pleased that the Congress endorses

my goal of stemming the dangerous proliferation of chemical and biological weapons. The Administration has worked closely

with the Congress to design appropriate and

effective legislation to improve our ability

to impose sanctions on the nations that use

such weapons and any companies that contribute to their spread. Indeed, the Administration supported the House version of the

sanctions provision. Throughout discussions

with the Congress, my Administration insisted that any such legislation should not

harm cooperation with our partners and

should respect the President's constitutional

responsibilities. Unfortunately, as reported

from conference, H.R. 4653 does not safeguard

those responsibilities, nor does it meet our broader foreign policy goals.

The major flaw in H.R. 4653 is not the requirement of sanctions, but the rigid way in

which they are imposed. The mandatory imposition of unilateral sanctions as provided

in this bill would harm U.S. economic interests and provoke friendly countries who are

essential to our efforts to resist Iraqi aggression. If there is one lesson we have all

learned in Operation Desert Shield, it is that

multilateral support enhances the effectiveness of sanctions.

Because of my deep concern about the serious threat posed by chemical and biological

weapons, I have signed an Executive order

directing the imposition of the sanctions

contained i;, this bill and implementing new

chemical and biological weapon export controls. This Executive order goes beyond H.R.

4653 in some respects. It sets forth a clear set

of stringent sanctions, while encouraging negotiations with our friends and allies. It Imposes an economic penalty on companies

that contribute to the spread of these weapons and on countries that actually use such

weapons or are making preparations to do

so. At the same time, it allows the President

necessary flexibility in implementing these

sanctions and penalties. Furthermore, the

Executive order reaffirms my determination

to achieve early conclusion of a verifiable

global convention to prevent the production

and use of chemical weapons.

The Executive order also directs the establishment of enhanced proliferation controls,

carefully targeted on exports, projects, and

countries of concern. On this issue, as with

other important export control matters, my

goal is to pursue effective, multilateral export controls that send the clear message

that the United States will not tolerate violations of international law.

I am also concerned that other features of

H.R. 4653 would hamper our efforts to improve the effectiveness of export controls. In

the rapidly changing situation in Eastern

Europe, and in bilateral relationships with

the Soviet Union, we have demonstrated the

ability to adjust, in cooperation with our allies, export controls on high technology to

reflect the new strategic relationships. Last

May I asked our allies to liberalize dramatically our multilateral export controls. Negotiations designed to liberalize trade to encourage democratic institutions and open

market economies will continue. Our multilateral export controls have contributed significantly to the positive changes brought

about in West-East relations. The

micromanagement of export controls mandated by H.R. 4653 can only damage these on- going effortu.

In other areas, H.R. 4653 would be harmful

to closely linked U.S. economic and foreign

policy interests. For example, under section

128 of the bill there would be extraterritorial

application of U.S. law that could force foreign subsidiaries of U.S. firms to choose between violating U.S. or host country laws.

Other sections of H.R. 4653 contain useful

provisions that will be implemented as soon as possible. However, additional legal au- thority is not required to make our export

control system reflect the economic and na- tional security realities of today's world, In

response to recent world events, I am directing Executive departments and agencies to

implement the following changes:

-By June 1, 1991, the United States will

eliminate all dual-use export licenses

under section 5 of the Export Administration Act to members of the export

control group known as CoCom, consistent with multilateral arrangements. In

addition, all re-export licenses under sec- tion 5 to and from CoCom will be eliminated, consisent with multilateral arrangements.

-By June 1, 1991, the United States will re- move from the U.S. munitions list all

items contained on the CoCom dual-use

list unless significant U.S. national secu- rity interests would be jeopardized.

-By January 1, 1991, U.S. review of export

licenses subject to CoCom Favorable

Consideration and National Discretion

procedures will be reduced to 30 and 15

days, respectively.

-By January 1, 1991, new interagency procedures will be instituted to make dual- use export license decisions more predictable and timely.

-By January 1, 1991, the Secretary of

State will initiate negotiations to ensure that supercomputer export controls are multilateral in nature and not undermined by the policies of other supplier

countries.

-By June 1, 1991, in consultation with industry, we will devise and publish a method to index supercomputer license

conditions to reflect rapid advances in

the industry and changes in strategic concerns. -By January 1, 1991, we will significantly

increase the threshold for Distribution

Licenses to free world destinations and ensure that at least annually these

thresholds are adjusted to reflect

changes in technology and are consistent

with international relationships, including changing requirements to stem the

proliferation of missile technology and

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CONGRESSIONAL RECORD-HOUSE January 3, 1991

nuclear, chemical and biological weapons.

In summary, H.R. 4653 contains serious and

unacceptable flaws that would hamper our

efforts to prevent the proliferation of weapons of mass destruction and to ease restrictions on the legitimate sale of dual-use goods

to acceptable users. Rather than sign this

bill. I have chosen to take a series of steps

under existing authorities to ensure that

mutually shared objectives are met in a

timely and effective manner. I will work

with the Congress, upon its return, to enact

an appropriate extension of the Export Administration Act.

GEORGE BUSH.

THE WHITE HOUSE, November 16, 1990.

H.R. 3134-MEMORANDUM Or DISAPPROVAL

In the closing days of the 101st Congress,

two bills were passed providing for somewhat

different benefits for the surviving spouses of

assassinated Federal judges. These survivors

have suffered profound and tragic losses, and

they have our deepest sympathies. I am

pleased that the Congress has passed legislation allowing these individuals to receive additional benefits.

One bill-H.R. 5316, the "Judicial Improvements Act of 1990"-has not yet been presented to me for approval. Upon its presentation to me, I plan to approve H.R. 5316,

which contains provisions that would increase the benefits, subject to certain limits,

for surviving spouses of all assassinated Federal judges on an equitable basis.

My approval of H.R. 5316 makes the approval of another bill-H.R. 3134-unnecessary. Therefore, I am withholding my approval of H.R. 3134, a bill which would have

provided somewhat different benefits for

Mrs. Joan R. Daronco. This action, in conJunction with my planned approval of H.R.

5316, will ensure that Mrs. Daronco and all

such surviving spouses receive their benefits

in an equitable manner.

GEORGE BUSH.

THE WHITE HOUSE, November 16, 1990.

S. 321-MEMORANDUM OF DISAPPROVAL

I am withholding my approval of S. 321, the

"Indian Preference Act of 1990." S. 321 would

establish, among other things, a program to

provide preferences to qualifying Indian enterprises in the award of Federal grants or

contracts using funds appropriated for the

benefit of Indians. The bill would impose

new, expensive, and often duplicative program responsibilities on the Secretary of the

Interior that would be difficult to implement. It would also likely result in Federal

agencies assuming new, unfunded liabilities

related to Indian preference enterprises.

My Administration strongly supports the

goals of S. 321 and is committed to helping

alleviate the widespread unemployment and

underemployment on Indian reservations.

Moreover, the Administration supports efforts to prevent companies from misusing

Federal Indian preference programs. Accordingly, amendments are needed to the "Buy

Indian Act" to increase Indian economic

self-sufficiency and employment opportunities and to prevent utilization of preference

provisions by non-qualifying companies.

However, S. 321 is seriously flawed and would

create more problems than it would solve.

I am withholding my approval of S. 321 to

allow further review of the issues in the

102nd Congress. Many of the issues raised by

S. 321 are complex and deserve a full airing

in both Houses of Congress. The House

passed S. 321 in the final days of the 101st

Congress without sufficient consideration of

these complex issues.

In the interim, I am directing the Secretary of the Interior to take the necessary

steps to address the contracting problems

identified in the November 1989 report of the

Special Committee on Investigations of the

Senate Select Committee on Indian Affairs.

In particular, I am directing the Secretary

to issue guidelines that set forth specific

procedures to govern Bureau of Indian Affairs field contracting officers in conducting

pre-award reviews of grants and contracts. I

am also directing the Secretary to develop

and submit proposed regulations to implement the "Buy Indian Act" for Executive review within 90 days.

GEORGE BUSH.

THE WHITE HOUSE, November 16, 1990.

S. 2834-MEMORANDUM OF DISAPPROVAL

I have withheld my signature from S. 2834,

the proposed "Intelligence Authorization

Act, Fiscal Year 1991," thereby preventing it

from becoming law. I am compelled to take

this action due to the bill's treatment of one

highly sensitive and important issue that directly affects the Nation's security, although

there also are several objectionable elements

of the bill that trouble me.

I cannot accept the broad language that

was added in Conference to the definition of

covert action. Section 602 of the bill defines

"covert action" to include any "request" by

the United States to a foreign government or

a private citizen to conduct a covert action

on behalf of the United States. This provision purports to regulate diplomacy by the

President and other members of the executive branch by forbidding the expression of

certain views to foreign governments and

private citizens absent compliance with

specified procedures; this could require, in

most instances, prior reporting to the Congress of the intent to express those views.

I am particularly concerned that the

vagueness of this provision could seriously

impair the effective conduct of our Nation's

foreign relations. It is unclear exactly what

sort of discussions with foreign governments

would constitute reportable "requests"

under this provision, and the very possibility

of a broad construction of this term could

have a chilling effect on the ability of our

diplomats to conduct highly sensitive discussions concerning projects that are vital to

our national security. Furthermore, the

mere existence of this provision could deter

foreign governments from discussing certain

topics with the United States at all. Such a

provision could result in frequent and divisive disputes on whether an activity is covered by the definition and whether individuals in the executive branch have complied

with a statutory requirement.

My objections to this provision should not

be misinterpreted to mean that executive

branch officials can somehow conduct activities otherwise prohibited by law or Executive order. Quite the contrary. It remains

Administration policy that our intelligence

services will not ask third parties to carry

out activities that they are themselves forbidden to undertake under Executive Order

No. 12333 on U.S. intelligence activities. I

have also directed that the notice to the

Congress of covert actions indicate whether

a foreign government will participate significantly.

Beyond this issue, I am also concerned by

the treatment in the Joint Explanatory

Statement accompanying the Conference Report of notification to the Congress of covert

actions. I reached an accommodation with

the Intelligence Committees on the issues of

notifying the Congress of covert actions "in

a timely fashion," as required by current

law, and hr.va provided letters to the Intelligence Committees outlining bow I intend

to provide such notice. I was consequently

dismayed by the fact that language was insorted in the Joint Explanatory Statement

accompanying the Conference Report that

could be conistrued to undercut the agreement reached with the Committees. This

language asserts that prior notice may be

withheld only in "exigent circumstances"

and that notice "in a timely fashion" should

now be interpreted to mean "within a few

days" without exception. Such as interpretation would unconstitutionally infringe on

the authority of the President and impair

any Administration's effective implementation of covert action programs. I deeply regret this action.

Additionally, I am concerned that there

are several legislatively direted policy determinations restricting programs of vital

importance to the United States that I do

not believe are helpful to U.S. foreign policy.

This bill, like its predecessor last year, also

contains language that purports to condition

specified actions on the Prosident's obtaining the prior approval of committees of the

Congress. This language is ,3learly unconstitutional under the Presentment clause of the

Constitution and the Supreme Court's decision in INS v. Chadha, 462 U.S. 919 (1983). 1

again urge the Congress to cease including

such unconstitutional provisions in bills presented to me for signature.

This Administration hat, had a good relationship with the Intelligence Committees. I

am willing to work with the Congress to address the primary issue *;hat has prompted

my veto as well as other ciffieulties with the

bill. I will also continue to work with the

Congress to ensure there is no change in our

shared understanding of what constitutes a

covert action, particularly with respect to

the historic missions of the armed forces. I

am confident that these issues can be resolved quickly in the next Congress through

mutual trust and a good-faith effort on the

part of the Administrat on and the Congress.

GEORGE BUSH.

THE WHITE HOUSE. November 30, 1990.

MESSAGES AND COMMUNICATIONS

RECEIVED FOLLOWING THE SINE

DIE ADJOURNMENT OF THE

101ST CONGRESS AND FOLLOWING THE PUBLICATION OF THE

FINAL ADDITION OF THE CONGRESSIONAL RECORD OF THE

101ST CONGRESS

COMMUNICATION FROM THE CLERK OF THE

HOUSE

The text of the communication from

the Clerk of the House of Representatives dated November 2, 1990, is as follows:

WASHINGTON, DC,

November 2, 1990.

Hon. THOMAS S. FOLEY,

The Speaker, House of Representatives, Washington, DC.

DEAR MR. SPEAKER: Pursuant to the permission granted in Clause 5 of Rule III of the

Rules of the U.S. Hcase of Representatives,

the Clerk received the following messages

from the Secretary of the Senate:

1. Received at 1:17 a.m. on Sunday, October

28, 1990: That the Senate passed without

amendment, H.J. Res. 687;

118