[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 125 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 125
To provide substantial reductions in the price of prescription drugs
for medicare beneficiaries.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 22, 2001
Mr. Johnson (for himself, Mr. Kennedy, Mr. Dorgan, Mr. Bingaman, Mr.
Feingold, Mr. Leahy, Mr. Inouye, Mr. Kerry, and Mr. Conrad) introduced
the following bill; which was read twice and referred to the Committee
on Finance
_______________________________________________________________________
A BILL
To provide substantial reductions in the price of prescription drugs
for medicare beneficiaries.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prescription Drug Fairness for
Seniors Act of 2001''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds the following:
(1) Manufacturers of prescription drugs engage in price
discrimination practices that compel many older Americans to
pay substantially more for prescription drugs than the drug
manufacturers' most favored customers, such as health insurers,
health maintenance organizations, and the Federal Government.
(2) On average, older Americans who buy their own
prescription drugs pay twice as much for prescription drugs as
the drug manufacturers' most favored customers. In some cases,
older Americans pay over 15 times more for prescription drugs
than the most favored customers.
(3) The discriminatory pricing by major drug manufacturers
sustains their annual profits of $20,000,000,000, but causes
financial hardship and impairs the health and well-being of
millions of older Americans. More than 1 in 8 older Americans
are forced to choose between buying their food and buying their
medicines.
(4) Most federally funded health care programs, including
the medicaid program under title XIX of the Social Security
Act, and programs administered by the Veterans Health
Administration, the Public Health Service, and the Indian
Health Service, obtain prescription drugs for their
beneficiaries at low prices. Beneficiaries under the medicare
program under title XVIII of the Social Security Act are denied
this benefit and cannot obtain their prescription drugs at the
favorable prices available to other federally funded health
care programs.
(5) Implementation of the policy set forth in this Act is
estimated to reduce prescription drug prices for medicare
beneficiaries by more than 40 percent.
(6) In addition to substantially lowering the costs of
prescription drugs for older Americans, implementation of the
policy set forth in this Act will significantly improve the
health and well-being of older Americans and lower the costs to
the Federal taxpayer of the medicare program.
(7) Older Americans who are terminally ill and receiving
hospice care services represent some of the most vulnerable
individuals in our Nation. Making prescription drugs available
to medicare beneficiaries under the care of medicare-certified
hospices will assist in extending the benefits of lower
prescription drug prices to those most vulnerable and in need.
(b) Purpose.--The purpose of this Act is to protect medicare
beneficiaries from discriminatory pricing by drug manufacturers and to
make prescription drugs available to medicare beneficiaries at
substantially reduced prices.
SEC. 3. PARTICIPATING MANUFACTURERS.
(a) In General.--Each participating manufacturer of a covered
outpatient drug shall make available for purchase by each pharmacy such
covered outpatient drug in the amount described in subsection (b) at
the price described in subsection (c).
(b) Description of Amount of Drugs.--The amount of a covered
outpatient drug that a participating manufacturer shall make available
for purchase by a pharmacy is an amount equal to the aggregate amount
of the covered outpatient drug sold or distributed by the pharmacy to
medicare beneficiaries.
(c) Description of Price.--The price at which a participating
manufacturer shall make a covered outpatient drug available for
purchase by a pharmacy is the price equal to the lower of the
following:
(1) The lowest price paid for the covered outpatient drug
by any agency or department of the United States.
(2) The manufacturer's best price for the covered
outpatient drug, as defined in section 1927(c)(1)(C) of the
Social Security Act (42 U.S.C. 1396r-8(c)(1)(C)).
SEC. 4. SPECIAL PROVISION WITH RESPECT TO HOSPICE PROGRAMS.
For purposes of determining the amount of a covered outpatient drug
that a participating manufacturer shall make available for purchase by
a pharmacy under section 3, there shall be included in the calculation
of such amount the amount of the covered outpatient drug sold or
distributed by a pharmacy to a hospice program. In calculating such
amount, only amounts of the covered outpatient drug furnished to a
medicare beneficiary enrolled in the hospice program shall be included.
SEC. 5. ADMINISTRATION.
The Secretary shall issue such regulations as may be necessary to
implement this Act.
SEC. 6. REPORTS TO CONGRESS REGARDING EFFECTIVENESS OF ACT.
(a) In General.--Not later than 2 years after the date of enactment
of this Act, and annually thereafter, the Secretary shall report to
Congress regarding the effectiveness of this Act in--
(1) protecting medicare beneficiaries from discriminatory
pricing by drug manufacturers; and
(2) making prescription drugs available to medicare
beneficiaries at substantially reduced prices.
(b) Consultation.--In preparing such reports, the Secretary shall
consult with public health experts, affected industries, organizations
representing consumers and older Americans, and other interested
persons.
(c) Recommendations.--The Secretary shall include in such reports
any recommendations that the Secretary considers appropriate for
changes in this Act to further reduce the cost of covered outpatient
drugs to medicare beneficiaries.
SEC. 7. DEFINITIONS.
In this Act:
(1) Participating manufacturer.--The term ``participating
manufacturer'' means any manufacturer of drugs or biologicals
that, on or after the date of enactment of this Act, enters
into or renews a contract or agreement with the United States
for the sale or distribution of covered outpatient drugs to the
United States.
(2) Covered outpatient drug.--The term ``covered outpatient
drug'' has the meaning given that term in section 1927(k)(2) of
the Social Security Act (42 U.S.C. 1396r-8(k)(2)).
(3) Medicare beneficiary.--The term ``medicare
beneficiary'' means an individual entitled to benefits under
part A of title XVIII of the Social Security Act or enrolled
under part B of such title, or both.
(4) Hospice program.--The term ``hospice program'' has the
meaning given that term under section 1861(dd)(2) of the Social
Security Act (42 U.S.C. 1395x(dd)(2)).
(5) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
SEC. 8. EFFECTIVE DATE.
The Secretary shall implement this Act as expeditiously as
practicable and in a manner consistent with the obligations of the
United States.
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