Grants the Secretary authority to negotiate contracts with manufacturers of covered part D drugs in order to ensure that beneficiaries enrolled under prescription drug plans and Medicare Advantage Prescription Drug Plans (MA-PD plans) pay the lowest possible price.

Allows the Medicare part D eligible individual an alternative to the current choice of coverage in at least two qualifying plans in the area in which the individual resides. Allows such an individual to choose enrollment in a nationwide prescription drug plan offered by the Secretary (to replace enrollment in a fallback prescription drug plan in any case in which such plans are not available).

Directs the Secretary, through the Administrator of the Centers for Medicare & Medicaid Services, to: (1) take necessary steps to qualify and serve as a prescription drug plan sponsor; and (2) offer a prescription drug plan that offers basic prescription drug coverage throughout the United States, with a $35 premium for 2008, adjusted annually thereafter.

Requires such a plan to be in addition to, and not in lieu of, other prescription drug plans offered.

Provides for full reimbursement to employers for the cost of qualified retiree drug coverage, and permits their costs to count towards senior's catastrophic limits.

Abolishes the comparative cost adjustment program.

Eliminates the MA Regional Plan Stabilization Fund.

Repeals certain cost containment requirements.

Amends SSA title XVIII to provide for the removal of exclusion of benzodiazepines from required coverage under the Medicare prescription drug program.