[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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