[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 123 Introduced in Senate (IS)]






109th CONGRESS
  1st Session
                                 S. 123

 To amend part D of title XVIII of the Social Security Act to provide 
    for negotiation of fair prices for Medicare prescription drugs.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 24, 2005

 Mr. Feingold introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend part D of title XVIII of the Social Security Act to provide 
    for negotiation of fair prices for Medicare prescription drugs.

    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 ``Efficiency in Government Health Care 
Spending Act''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Prohibiting the Federal Government from negotiating 
        prescription drug prices with manufacturers fails to take 
        advantage of the purchasing power of the Medicare program.
            (2) Negotiating prescription drug prices can reduce the 
        costs of prescription drugs for both the Medicare program and 
        taxpayers.
            (3) A 2002 study by the inspector general of the Department 
        of Health and Human Services found that--
                    (A) both the Medicare program and the beneficiaries 
                of the Medicare program continually pay too much for 
                medical equipment and medical supplies; and
                    (B) if the Medicare program paid the same prices 
                for 16 health care supplies as the Department of 
                Veterans Affairs, which directly negotiates prices with 
                manufacturers, pays for those supplies, the Federal 
                Government could save $958,000,000 each year.

SEC. 3. SENSE OF THE SENATE REGARDING THE USE OF AUTHORITY TO NEGOTIATE 
              PRICES FOR MEDICARE PRESCRIPTION DRUGS.

    It is the sense of the Senate that the Secretary of Health and 
Human Services should exercise the authority under section 1860D-
11(i)(1) of the Social Security Act (42 U.S.C. 1395w-111(i)(1)), as 
amended by section 4, so as to assure an affordable medicare drug 
benefit for medicare beneficiaries and taxpayers.

SEC. 4. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION DRUGS.

    (a) Negotiation.--Section 1860D-11 of the Social Security Act (42 
U.S.C. 1395w-111) is amended by striking subsection (i) (relating to 
noninterference) and by inserting the following:
    ``(i) Authority to Negotiate; No National Formulary.--
            ``(1) Authority To Negotiate Prices With Manufacturers.--In 
        order to ensure that beneficiaries enrolled under prescription 
        drug plans and MA-PD plans pay the lowest possible price, the 
        Secretary shall have authority similar to that of other Federal 
        entities that purchase prescription drugs in bulk to negotiate 
        contracts with manufacturers of covered part D drugs, 
        consistent with the requirements and in furtherance of the 
        goals of providing quality care and containing costs under this 
        part.
            ``(2) No national formulary.--In order to promote 
        competition under this part and in carrying out this part, the 
        Secretary may not require a particular formulary for covered 
        part D drugs.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the enactment of section 101(a) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(Public Law 108-173; 117 Stat. 2071).
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