II 109th CONGRESS 2d Session S. 2240 IN THE SENATE OF THE UNITED STATES February 2, 2006 Mr. Levin (for himself and Ms. Stabenow) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XVIII to reform the Medicare prescription drug program.

1.

Short title

This Act may be cited as the Medicare Part D Reform Act of 2006.

2.

Removal of covered part D drugs from the prescription drug plan formulary

Section 1860D–4(b)(3)(E) of the Social Security Act (42 U.S.C. 1395w–104(b)(3)(E)) is amended to read as follows: (E)

Removing drug from formulary or changing preferred or tier status of drug

(i)

Limitation on removal or change

Beginning with 2006, the PDP sponsor of a prescription drug plan may not remove a covered part D drug from the plan formulary or change the preferred or tiered cost-sharing status of such a drug other than during the period beginning on September 1 and ending on October 31. Subject to clause (ii), such removal or change shall only be effective beginning on January 1 of the immediately succeeding calendar year. (ii)

Notice

Any removal or change under this subparagraph shall not take effect unless appropriate notice is made available (such as under subsection (a)(3)) to the Secretary, affected enrollees, physicians, pharmacies, and pharmacists. Such notice shall ensure that such information is made available prior to the annual, coordinated open election period described in section 1851(e)(3)(B)(iii), as applied under section 1860D–1(b)(1)(B)(iii). .

3.

Pharmaceutical patient assistance programs

(a)

Providing a safe harbor for pharmaceutical patient assistance programs

Section 1128B(b)(3) of the Social Security Act (42 U.S.C. 1320a–7b(b)(3)) is amended— (1)in subparagraph (G)— (A)by inserting or under a patient assistance program (including a pharmaceutical manufacturer patient assistance program) after Indian organizations); and (B)by striking and at the end; (2)in subparagraph (H), as added by section 237(d) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173; 117 Stat. 2213)— (A)by moving such subparagraph 2 ems to the left; and (B)by striking the period at the end and inserting ; and; and (3)by redesignating subparagraph (H), as added by section 431(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173; 117 Stat. 2287), as subparagraph (I) and moving such subparagraph 2 ems to the left. (b)

Exclusion of expenditures under certain pharmacy assistance programs from TROOP

Section 1860D–2(b)(4)(C)(ii) of such Act (42 U.S.C. 1395w–102(b)(4)(C)(ii)) is amended by inserting under a pharmaceutical manufacturer patient assistance program, after a group health plan,. (c)

Effective date

The amendments made by this section shall take effect on the date of enactment of this Act.

4.

Protection against cost-sharing for full-benefit dual eligible individuals

(a)

In general

Section 1860D–14(a)(1)(D)(ii) of the Social Security Act (42 U.S.C. 1395w–114(a)(1)(D)(ii)) is amended— (1)in the heading, by striking Lowest income; (2)by striking and whose income does not exceed 100 percent of the poverty line applicable to a family of the size involved; and (3)by adding at the end the following new sentence: In the case of an individual who is unable to pay the copayment applicable under the preceding sentence, such copayment shall be waived.. (b)

Effective Date

The amendments made by this section shall apply to drugs dispensed on or after the date of enactment of this Act.

5.

Negotiating fair prices for medicare prescription drugs

(a)

In General

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 new subsection: (i)

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. . (b)

Effective Date

The amendment made by this section shall take effect on the date of enactment of this Act.