WASHINGTON, D.C. – U.S. Sens. John Kennedy (R-La.) and Chris Van Hollen (D-Md.) wrote a letter to U.S. Trade Representative Robert Lighthizer urging him to include conditions from their legislation, the Holding Foreign Companies Accountable Act, during discussion of a trade deal with China.

The bill introduced would require foreign companies to comply with U.S. auditing standards by requiring them to meet the Public Accounting Oversight Board standards (PCAOB). The PCAOB is a nonprofit corporation established by Congress in 2002 that administers performance audits of public companies in order to protect investors.  The PCAOB has entered into cooperative agreements with foreign regulators around the world but has not been able to reach an agreement with China. 

“The current failure of China to comply with our laws and play by the same rules as everyone else puts American investors and the credibility of our markets at risk…” the senators write. “The fact that China stands alone in its noncompliance with PCAOB standards is yet another example of how it fails to play by the same rules as other countries. China’s failure to comply with our disclosure laws has already impacted investor confidence and the integrity of our financial markets.”

The full text of the letter is available here and below:

Dear Ambassador Lighthizer:

As you continue your work on a fair trade deal with the Chinese government, we urge you to include conditions in the deal that would require Chinese companies listed in the United States to comply with U.S. auditing and reporting requirements. The current failure of China to comply with our laws and play by the same rules as everyone else puts American investors and the credibility of our markets at risk.  Because of this negligence, we introduced the Holding Foreign Companies Accountable Act, which we believe should be a guidepost for your negotiations with the Chinese government on this issue.

In 2005, the Public Accounting Oversight Board (PCAOB), began inspecting foreign auditors “in order to assess those firms’ compliance with the Sarbanes-Oxley Act, the rules of the Board, the rules of the Securities and Exchange Commission (SEC), and professional standards in connection with their performance of audits, issuance of audit reports, and related matters involving U.S. public companies, other issuers, brokers and dealers.” The PCAOB is able to inspect these firms because it entered into cooperative agreements with foreign regulators around the world.

Achieving these agreements, has not been easy, but our regulators have been able to come to an agreement with virtually every other country except for China. To put this into perspective, in 2013, the PCAOB was unable to conduct inspections of foreign auditors in 15 countries. In just six years, they have been able to come to an agreement with every country except for China and Belgium, and it is our understanding that Belgium has made meaningful progress with the PCAOB.

The fact that China stands alone in its non-compliance with PCAOB standards is yet another example of how it fails to play by the same rules as other countries. This point was underscored in December when the Chairmen of the PCAOB and the SEC said in a joint statement that “for certain China-based companies listed on U.S. stock exchanges, the SEC and PCAOB have not had access to the books and records and audit work papers to an extent consistent with other jurisdictions both in scope and timing.”

China’s failure to comply with our disclosure laws has already impacted investor confidence and the integrity of our financial markets. As you may be aware, in 2009, the U.S. markets saw a boom of Chinese companies registering on the U.S. exchanges. By circumventing our laws, many of these fraudulent companies merged with American shell companies and got access to U.S. investors without an initial inspection by the SEC. Because of this, many of these Chinese-based companies crashed in 2011.  This crash, commonly referred to as the “reverse merger fraud crisis,” led to the loss of billions of dollars in market capitalization.  According to a 2013 McKinsey and Company report, the losses were over $40 billion in market value.

The SEC, PCAOB, and the U.S. exchanges responded to the reverse merger crisis in a number of ways. For example, the SEC filed numerous enforcement cases against Chinese companies and their attorneys, auditors, and “gatekeepers.” Additionally, the New York Stock Exchange and NASDAQ delisted over 50 Chinese companies between 2011 and 2012.

Despite these actions, we still do not have complete information regarding Chinese companies listed in the U.S. In order to remedy the fact that China will not comply with our regulators, we introduced the Holding Foreign Companies Accountable Act. Our bill would amend Sarbanes-Oxley to impose stronger requirements on SEC registered companies based in foreign countries. The bill expressly requires foreign companies that are registered with the SEC to allow the PCAOB to review their books.  While the bill does not specifically name any country, it would solve this ongoing issue the PCAOB and the SEC have with China.

We ask that you include the substance of this bill in your trade negotiations with the Chinese government, in order to protect the everyday American investor. Thank you for your attention to this matter.

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By U.S. Sen. John Kennedy

Just a few years ago, a study found that 36 million Americans failed to refill their prescriptions because the cost was too much.  That means a population the size of Louisiana, Texas and Arkansas combined is skipping medicine that controls diabetes, lowers cholesterol and battles depression.

Across America, the contents of our medicine cabinets now rival expensive jewelry in price.  The cost of insulin doubled in the U.S. between 2012 and 2016.  Nexium, which treats acid reflux, will set you back more than $7 per pill. 

What’s really frustrating is that the spiraling cost of prescription drugs is limited to the U.S.  That exact same Nexium pill only costs three bucks in Canada.

Somehow, we’ve turned medication that is as necessary as air and water into a luxury item in America.  Drugs that prolong the lives of everyone from infants to senior citizens are increasingly becoming unaffordable.  People are shaking their heads at the pharmacy counter and walking away without their prescriptions.

Simply living in the U.S. means you pay more for pharmaceutical drugs.  Move to Switzerland, Japan, Germany, Canada, Ireland, Belgium or any other similarly blessed country in this world, and you’ll pay less at the pharmacy.  Consider this:  In America, per capita spending on pharmaceutical drugs is $1,162; in Denmark, it’s $282.

There are many reasons why Americans pay more for prescription drugs than residents of other countries.  Through legislation, I’m tackling two of those reasons: the middleman and the abuse of our patent system.

To help senior citizens, I’ve filed the Phair Pricing Act of 2019 to reduce patients’ costs at the point of sale.  Here’s how it will work.

Negotiations with drug manufacturers on prices that health plans pay are conducted by what are known as pharmacy benefit managers.  It used to be that these companies just processed claims.  Now they’re deciding which drugs your health plan will cover and the price you and your health plan will pay.

On the surface, it sounds like a great idea to have someone haggling with drug companies on costs.  But pharmacy benefit managers have consolidated over the years, making them an elite club that operates in shadows. 

What we suspect is that pharmacy benefit managers are making out like bandits through dubious business practices.  For example, pharmacy benefits managers negotiate discounts with drug manufacturers and then some pocket the money.  The result is higher costs at the pharmacy counter for patients while the pharmacy benefit manager makes a hefty profit.

The Phair Pricing Act of 2019 makes it clear that savings achieved through price negotiations must benefit the patient – not the middleman.

I am also cosponsoring the Affordable Prescriptions for Patients Act.  This legislation will eliminate the games the pharmaceutical drug industry plays with the patent system to block competitors.  Competition lowers prices.

Some companies blanket their products with multiple patents to discourage cheaper alternatives from developing.  Most often, this happens with especially expensive drugs.  It’s one thing to protect a newly developed drug.  It’s another thing to game the system and gouge patients by repeatedly reissuing patents on an old drug.

For example, if a patent is expiring, a drug company might slightly change the dosage instructions in order to qualify for another patent.  This creates a loophole in the patent expiration system.

The Affordable Prescriptions for Patients Act puts patients first by limiting unfair tactics like this.

Prescription drugs help us live longer.  They improve our quality of life.  I’m not anti-drug companies; I congratulate them on their success and thank them for their products. But their products only help us if we can afford them.

WASHINGTON, D.C. – U.S. Sen. John Kennedy (R-La.) announced $9 million in grants from the Department of Transportation for Lafayette Regional Airport and Alexandria International Airport.

A $2.6 million grant for Alexandria International Airport will be used to improve runways and surrounding areas to make them safer. A $6.4 million grant for Lafayette Regional Airport will fund the reconstruction of the airport apron, a place for aircraft to be loaded, unloaded, fueled and parked.

“Our airports are a gateway for thousands of people traveling to and from Louisiana every year,” said Sen. Kennedy.  “These grants will ensure the safety of passengers and crews as they come and go through Lafayette and Alexandria.”

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WASHINGTON, D.C. – U.S. Sens. John Kennedy (R-La.), Doug Jones (D-Ala.) and Bill Cassidy, M.D. (R-La.), filed the BE SAFE ACT of 2019 to improve emergency evacuation routes in rural areas by creating an up to $100 million competitive grant program for work on roads and bridges.

The legislation directs the secretary of transportation to establish the program for projects that would improve emergency evacuation routes though 1.) the construction of state and local connector roads that facilitate access to broader thoroughfares and 2.) the improvement or expansion of existing roads and bridges.

“Louisianans need reliable routes to get out of harm’s way when a natural disaster like a hurricane approaches.  We all know how bad Louisiana’s bridges and roads are.  Our infrastructure has been sadly neglected,” said Sen. Kennedy.  “Rather than forcing rural and small communities to wait for the state’s investment, this legislation will empower them to improve evacuation routes.  This will be a huge help to residents in financially challenged communities.”

“Alabamians know all too well that extreme weather can strike at any time – especially now with hurricane season upon us,” said Senator Jones.  “And while it is crucial that communities get the disaster relief they need after the fact, it is important that folks can better prepare for natural disasters and to help make our communities safer so we can reduce the impact and cost of inevitable severe weather.  This bill will help make Alabamians safer, while also improving our aging roadways in rural communities that badly need infrastructure investment.”

“When a hurricane evacuation is declared, hours can mean the difference between life and death,” said Dr. Cassidy.  “This legislation keeps Louisiana families safe, giving rural communities the resources needed to improve evacuation routes and save lives.”

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