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On Jan. 1, the administration of vaccines (in addition to the cost of the vaccine itself) is included in the coverage of Medicare Part D drugs.

In June, House Democrats announce plans to introduce legislation preventing FDA regulation from trumping medical device patients’ ability to seek damages under state law.


On Jan. 3, Speaker of the House Nancy Pelosi and House Democrats release their agenda for the first 100 hours of the legislative session, planning to enact a bill that will allow the Secretary of Health and Human Services to negotiate directly with pharmaceutical companies to negotiate lower prescription drug prices for Medicare beneficiaries. The Senate has not acted on the measure.

In mid-January, a bipartisan Congressional contingent announces plans for legislation to allow importation of prescription drugs from Canada and other foreign countries, estimating that consumers could save $50 billion over the next ten years if the measure is passed.

In April, patent reform legislation is introduced in the Senate to improve the U.S. patent system. Despite support from high-tech and communications companies, the measure is opposed by the pharmaceutical industry because of the possibility that it would weaken patent protections by reducing infringement penalties. The bill was reported out of committee but has not made it to the Senate floor.

In May, a drug-import plan that would have eased the process of importing cheaper prescription drugs into the country from Canada and other foreign countries is defeated during Senate debate on a bill designed to strengthen the FDA.

In late September, President George W. Bush signs into law the Food and Drug Administration Amendments Act (FDAAA) of 2007. The bill revises and extends the user-fee programs for prescription drugs and medical devices, enhances the postmarket authorities of the FDA with respect to the safety of drugs, requires clinical trials and research for pediatric medications, and reauthorizes multiple bills, including the Orphan Drug Act relating to medications for rare diseases, the Best Pharmaceuticals for Children Act, and the Public Health Service Act.

In November, legislation that would have prevented reverse payment, or the practice of brand-name drug companies paying generic drug manufacturers to delay market entry of generic medications, stalls in Congress.

On Dec. 21, President George W. Bush signs into law an extension of the State Children’s Health Insurance Program (SCHIP) to provide funds to states to grant health insurance to children in families with incomes that are modest but too high to qualify for Medicaid. Amidst a bitter partisan battle between Congress and the White House, the bill extends funding for eighteen months so that a compromise can be reached.


On Jan. 1, the Medicare Modernization Act of 2003 goes into effect. It gets off to a shaky start, with many consumers unable to utilize the benefit because of administrative problems. Within the first month at least half the states are forced to bypass the system, pay the bills themselves and seek federal reimbursement later.

The FDA unveils new rules that force drug makers to simplify informational inserts that come with prescriptions in an effort to make medications safer for consumers. The move comes amidst heavily publicized safety concerns from painkillers Vioxx and Bextra, both of which were removed from the market in 2005.


The pharmaceutical industry mounts a successful $83 million effort to defeat Proposition 79 in California’s November special election. The initiative would have cost drug companies millions of dollars in mandatory discounts and could have set a precedent, opening the door to such action in other states.

In August, a federal judge in Minnesota dismisses claims that several drug giants violated antitrust law by taking steps to block the importation of prescription drugs from Canada.

Thirty-three of the 40 countries that PhRMA requested be put in the U.S. Trade Representative’s Special 301 Report appear on the list. Inclusion establishes intellectual property issues — such as drug patents — as a priority in bilateral discussions between the United States and the designated countries.


American Jobs Creation Act is signed into law. The act repeals the Extraterritorial Income Act tax regime and provides for $137 billion in new corporate tax incentives over the next decade. Taking advantage of a provision in the law, Pfizer, the world’s largest drug company, is expected to repatriate nearly $17 billion it earned in profits abroad.

BioShield Act passes, providing $5.6 billion over 10 years for biodefense products.

CREATE Act passes unanimously in both houses of Congress. Allows patents for inventions researched jointly by public institutions and private entrepreneurs.

Thirty-three of the 38 countries cited in a PhRMA petition to the United States Trade Representative’s Office appear on the USTR watch list.


The Medicare Modernization Act of 2003 provides for a prescription drug benefit for Medicare recipients but prevents price negotiations with drug companies. The act partially reverses cuts in reimbursements to pharmaceutical companies.


The Best Pharmaceuticals for Children Act is signed into law. It extends “pediatric exclusivity” provision of the FDA Modernization Act of 1997 that gives prescription drug makers an additional six months of patent protection during which generic drugs cannot be sold, in exchange for the manufacturer conducting studies of the drug’s effects in children. The Congressional Budget Office estimates that, in the long run, prices for prescription drugs will increase as a result of the bill.

Trade Act of 2002 (H.R.3009) passed. The Act makes intellectual property rights and the elimination of regulatory practices (such as price controls) negotiating objectives in trade agreements.

Prescription Drug Users Fee Act renewed. Included in the legislation are industry requests to speed up product reviews and use third-party advisors recommended by the companies to assess products.

Greater Access to Affordable Pharmaceuticals Act is defeated. The Act would have weakened patent restrictions on pharmaceuticals, making way for more generic drugs.

A policy is enacted that requires warning letters sent to drug companies to first be cleared by the FDA counsel’s office. The number of warning letters sent by the FDA dramatically decreases.

The Department of Health and Human Services proposes new privacy regulations that could give FDA-regulated entities, including drug companies, access to medical records without notice to patients.

The FDA approves rule change allowing some drugs, such as vaccines against biowarfare agents, to be approved after testing in animals.

A provision to protect companies from lawsuits regarding thimerosal contained in their vaccines is a last-minute addition to the bill that created the Department of Homeland Security. In the face of popular outrage, the provision is repealed a few months later.


FDA Modernization Act is signed into law. Allows medical device makers to hire for-profit companies to review their products and promote them to the FDA. Codifies previous reforms. Allows manufacturers to disseminate journal articles describing the results of trials for unapproved uses of drugs. Reauthorizes the Prescription Drug User Fee Act. Authorizes six-month “pediatric exclusivity” patent extensions.

The FDA eases restrictions on direct-to-consumer advertising of prescription drugs, allowing ads to refer consumers elsewhere to find risk information instead of including it in the ads themselves.

The Orphan Drug Act tax credit is made permanent.


Congress reauthorizes the Orphan Drug Tax Credit for one year. The credit covers 50 percent of the cost of clinical trials for orphan drugs. Companies not yet profitable enough to pay taxes are allowed to take the tax credit at a later date.


The FDA relaxes regulations, eliminating the establishment licensing application, which required a separate application to approve the manufacturing sites of new drugs. Lot-lease approvals, a continuous review of manufacturing sites after initial approval, also end.

The US Patent Office allows companies to show potential usefulness by submitting preclinical trial data rather than data from clinical trials.

The Patent Office relaxes its criteria on awarding patents for genes.


After heavy lobbying by the industry, price control proposals that were part of the Clinton health care plan are abandoned.


Prescription Drug User Fees Act passes. Allows companies to pay a fee to the FDA in return for a faster review period.


The FDA accelerates the review of drugs for life-threatening diseases.


The Prescription Drug Marketing Act passed. (Requires distribution of samples and safeguards against the sale of substandard or counterfeit drugs.)


Hatch-Waxman Act (The Drug Price Competition and Patent Term Restoration Act of 1984) passes. One of the major loopholes in the act allows brand-name drug companies a 30 month patent extension on a drug by suing a generic manufacturer.


Orphan Drug Act passes. The law encourages development of drugs to treat rare diseases affecting fewer than 200,000 by giving incentives to companies.


Bayh-Dole Act passes. The Act promotes university-industry partnerships and allows the industry to tap research conducted at taxpayer-subsidized facilities.

Last updated June 2008

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