[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3 Reported in Senate (RS)]






                                                       Calendar No. 118
110th CONGRESS
  1st Session
                                  S. 3

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 4, 2007

    Mr. Reid (for himself, Mr. Baucus, Mr. Leahy, Ms. Mikulski, Mr. 
Schumer, Mrs. Clinton, Ms. Cantwell, Mr. Kohl, Ms. Stabenow, Mr. Webb, 
    Mrs. Boxer, Mr. Brown, Ms. Klobuchar, Mr. Casey, and Mr. Levin) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

                             April 13, 2007

Reported under authority of the order of the Senate of April 12, 2007, 
                    by Mr. Baucus, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


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

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE; SENSE OF THE CONGRESS.</DELETED>

<DELETED>    (a) Short Title.--This Act may be cited as the ``Medicare 
Prescription Drug Price Negotiation Act of 2007''.</DELETED>
<DELETED>    (b) Sense of the Congress.--It is the sense of the 
Congress that the Congress should enact, and the President should sign, 
legislation to amend part D of title XVIII of the Social Security Act 
to provide for fair prescription drug prices for Medicare 
beneficiaries.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Fair Prescription Drug 
Price Act of 2007''.

SEC. 2. REPEAL OF PROHIBITION.

    (a) Repeal of Prohibition.--
            (1) In general.--Section 1860D-11(i) of the Social Security 
        Act (42 U.S.C. 1395w-111(i)) is amended by striking ``the 
        Secretary--'' and all that follows through ``may not require'' 
        and inserting ``the Secretary may not require''.
            (2) Rule of construction.--Nothing in the amendment made by 
        paragraph (1) shall be construed as doing any of the following:
                    (A) Preventing the sponsor of a prescription drug 
                plan or an MA organization offering an MA-PD plan under 
                part D of title XVIII of the Social Security Act from 
                obtaining a discount or reduction of the price for a 
                covered part D drug.
                    (B) Affecting the authority of the Secretary of 
                Health and Human Services to ensure appropriate and 
                adequate access to covered part D drugs under 
                prescription drug plans and under MA-PD plans under 
                such part, including compliance of such plans with 
                formulary requirements under section 1860D-4(b)(3) of 
                the Social Security Act (42 U.S.C. 1395w-104(b)(3)).
                    (C) Limiting access by individuals enrolled in such 
                prescription drug plans and MA-PD plans to community 
                pharmacies.
            (3) Conduct of negotiations.--Section 1860D-11 of the 
        Social Security Act (42 U.S.C. 1395w-111) is amended by adding 
        at the end the following new subsection:
    ``(k) Efforts to Promote and Ensure Access to Fair Prices.--
            ``(1) Use of agency resources.--To the extent that the 
        Secretary promotes and ensures access to fair prices by 
        engaging in any direct negotiations with a drug manufacturer 
        with respect to prices for covered part D drugs, the 
        Secretary--
                    ``(A) may only do so utilizing the resources of the 
                Department of Health and Human Services; and
                    ``(B) may not enter into a contract with any public 
                or private entity or enter into an Interdepartmental 
                Agreement for the purpose of conducting such 
                negotiations.''.
    (b) Accountability.--Section 1860D-11(k) of the Social Security 
Act, as added by subsection (a)(3), is amended by adding at the end the 
following new paragraph:
            ``(2) Annual report on efforts to promote and ensure access 
        to fair prices.--The Secretary shall submit to Congress an 
        annual report on the efforts of the Secretary to promote and 
        ensure access to fair prices for prescription drugs under this 
        part.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

SEC. 3. GREATER TRANSPARENCY OF PART D PRICES AND INFORMATION.

    (a) Access of Congressional Support Agencies to Data on 
Prescription Drug Plans and Medicare Advantage Plans.--Section 1860D-42 
of the Social Security Act (42 U.S.C. 1395w-152) is amended by adding 
at the end the following new subsection:
    ``(c) Providing Part D Data to Congressional Support Agencies.--
            ``(1) In general.--Notwithstanding any provision under this 
        part that limits the use of prescription drug data collected 
        under this part and subject to the restriction under paragraph 
        (6), upon the request of a congressional support agency, the 
        Secretary shall provide such agency with the following data 
        collected from, or related to, prescription drug plans and MA-
        PD plans:
                    ``(A) Aggregate negotiated price concessions.--
                Aggregate negotiated price concessions described in 
                section 1860D-2(d)(2) (as determined necessary and 
                appropriate by the congressional support agency to 
                carry out the legislatively mandated duties of the 
                agency).
                    ``(B) Negotiated price concessions.--The negotiated 
                rebates, discounts, and other price concessions (as 
                currently reported pursuant to section 1860D-2(d)(2)).
                    ``(C) Drug claims data.--Data or a representative 
                sample of data regarding drug claims submitted under 
                section 1860D-15(c)(1)(C) (as determined necessary and 
                appropriate by the congressional support agency to 
                carry out the legislatively mandated duties of the 
                agency).
                    ``(D) Reinsurance payments.--The amount of 
                reinsurance payments paid under section 1860D-15(a)(2), 
                provided at the plan level.
                    ``(E) Risk-corridor payments.--The amount of any 
                adjustments of payments made under subparagraph (B) or 
                (C) of section 1860D-15(e)(2), provided at the plan 
                level.
            ``(2) Prohibition on disclosure of data by congressional 
        support agencies.--
                    ``(A) Data provided to a congressional support 
                agency under this subsection shall not--
                            ``(i) be disclosed by such agency in the 
                        performance of the agency's duties in cases 
                        where such disclosure by the Secretary would be 
                        prohibited under applicable Federal law, or 
                        where such disclosure would result in the 
                        disclosure of trade secrets; and
                            ``(ii) be disclosed, reported, or released 
                        by such agency in identifiable form.
                    ``(B) Identifiable form.--For purposes of 
                subparagraph (A)(ii), the term `identifiable form' 
                means any representation of information described in 
                subparagraphs (A) through (E) of paragraph (1) that 
                permits identification of a specific prescription drug 
                plan, MA-PD plan, pharmacy benefit manager, drug 
                manufacturer, drug wholesaler, drug, or individual 
                enrolled in a prescription drug plan or an MA-PD plan 
                under this part.
            ``(3) Safeguarding data.--Each congressional support agency 
        shall adopt and maintain reasonable safeguards to protect 
        against the unauthorized disclosure of data provided under this 
        subsection. Such safeguards shall only permit the congressional 
        support agency to disclose the data to another agency or entity 
        if the agency or entity is--
                    ``(A) under a subcontract with the congressional 
                support agency to support any analysis conducted by the 
                congressional support agency with respect to such data; 
                and
                    ``(B) is subject to the same data disclosure 
                provisions and safeguards as the congressional support 
                agency is subject to under this paragraph and paragraph 
                (2).
            ``(4) Disclosure exemption.--Data provided under this 
        subsection shall be exempt from disclosure under section 552 of 
        title 5, United States Code.
            ``(5) Congressional support agency defined.--In this 
        subsection, the term `congressional support agency' means--
                    ``(A) the Medicare Payment Advisory Commission;
                    ``(B) the Congressional Research Service;
                    ``(C) the Congressional Budget Office; and
                    ``(D) the Government Accountability Office.
            ``(6) Restriction on disclosure of price concessions.--The 
        Secretary may only release data on the negotiated price 
        concessions described in paragraph (1)(B) to the congressional 
        support agency described in paragraph (5)(C).
            ``(7) Rule of construction.--Nothing in this subsection 
        shall be construed to limit the ability of a congressional 
        support agency to obtain information not described in paragraph 
        (1).''.
    (b) Study on Market Competition and Reports on Limitations of Data 
Elements for Studying the Prescription Drug Program.--
            (1) Study and report on market competition by the 
        congressional budget office.--
                    (A) In general.--The Director of the Congressional 
                Budget Office shall conduct a study on the effect of 
                market competition on prices for drugs under part D of 
                title XVIII of the Social Security Act (42 U.S.C. 
                1395w-101 et seq.) that includes a review of--
                            (i) the number and extent of discounts and 
                        other price concessions received by 
                        prescription drug plans and MA-PD plans for 
                        covered part D drugs under such part;
                            (ii) the relationship between such 
                        discounts and price concessions and drug 
                        utilization;
                            (iii) the relationship between such 
                        discounts and price concessions and the 
                        manufacturer's best price (as defined in 
                        section 1927(c)(2)(B) of the Social Security 
                        Act (42 U.S.C. 1396r-8(c)(2)(B)) for covered 
                        outpatient drugs; and
                            (iv) the extent to which the efforts of the 
                        Secretary of Health and Human Services (as 
                        reported by the Secretary under section 1860D-
                        11(k) of the Social Security Act, as added by 
                        section 2(b)) to promote and ensure access to 
                        fair prices for prescription drugs under such 
                        part have an effect upon payers in non-Medicare 
                        markets.
                    (B) Report.--Not later than 1 year after the date 
                of enactment of this Act, the Director of the 
                Congressional Budget Office shall submit a report 
                containing the results of the study conducted under 
                subparagraph (A).
            (2) Reports on limitations of data elements for studying 
        the prescription drug program.--Not later than 180 days after 
        the date of enactment of this Act, the Medicare Payment 
        Advisory Commission and the Government Accountability Office 
        shall each submit a report to Congress commenting on the 
        limitations on the usefulness of the data described in 
        subparagraphs (A) through (E) of section 1860D-42(c)(1), as 
        added by subsection (a), to inform Congress on negotiated 
        prices for covered part D drugs (as defined in section 1860D-
        2(e) of such Act (42 U.S.C. 1395w-102(e)) under the Medicare 
        prescription drug program.
    (c) Disclosure of Drug Claims Data to the State Agency Responsible 
for Administering the State Plan Under the Medicaid Program.--Section 
1860D-42 of the Social Security Act (42 U.S.C. 1395w-152), as amended 
by subsection (a), is amended by adding at the end the following new 
subsection:
    ``(d) Disclosure of Drug Claims Data to the State Agency 
Responsible for Administering the State Plan Under the Medicaid 
Program.--Notwithstanding any provision under this part that limits the 
use of prescription drug data collected under this part, upon the 
request of a State agency with responsibility for administering the 
State plan under title XIX, the Secretary shall provide such State 
agency with the data described in paragraph (1)(C) of subsection (c) 
with respect to full-benefit dual eligible individuals (as defined in 
section 1935(c)(6)) who are enrolled in the State plan. The provisions 
of paragraphs (2) and (3) of subsection (c) shall apply to a State 
agency with respect to data provided under this subsection in the same 
manner as such provisions apply to a congressional support agency with 
respect to data provided under subsection (c).''.
    (d) Public Disclosure of Data by the Secretary of Health and Human 
Services.--Section 1860D-42 of the Social Security Act (42 U.S.C. 
1395w-152), as amended by subsections (a) and (c), is amended by adding 
at the end the following new subsection:
    ``(e) Disclosure of Drug Prices Charged to Enrollees.--
            ``(1) In general.--The Secretary shall make available to 
        the public, upon request and in an electronic form determined 
        appropriate by the Secretary, data on the prices charged for 
        each covered part D drug under each prescription drug plan and 
        MA-PD plan to individuals enrolled in the plan. Such data shall 
        reflect actual prices posted on the Internet website of the 
        Centers for Medicare & Medicaid Services and shall be made 
        available in a manner that permits linkage of the data to data 
        contained in other public prescription drug plan and MA-PD plan 
        data files.
            ``(2) Nominal fee for data provided.--The Secretary may 
        charge a nominal fee for data provided under paragraph (1) 
        based on the cost of preparing and providing such data.''.
    (e) Dissemination of Retail Drug Prices.--Section 1860D-4(k) of the 
Social Security Act (42 U.S.C. 1395w-104(k)) is amended--
            (1) in the heading, by striking ``Pharmaceutical Prices for 
        Equivalent Drugs'' and inserting ``Prescription Drug 
        Information at Point of Sale'';
            (2) by striking ``in general.--A PDP sponsor'' and 
        inserting ``pharmaceutical prices for equivalent drugs.--
                    ``(A) In general.--A PDP sponsor'';
            (3) by redesignating paragraph (2) as subparagraph (B) and 
        indenting appropriately;
            (4) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively, and indenting appropriately;
            (5) in clause (i), as redesignated under paragraph (4)--
                    (A) by striking ``subparagraph (B)'' and inserting 
                ``clause (ii)''; and
                    (B) by striking ``paragraph (1)'' and inserting 
                ``subparagraph (A)''; and
            (6) by adding at the end the following new paragraph:
            ``(2) Drug prices charged to enrollees.--
                    ``(A) In general.--A PDP sponsor offering a 
                prescription drug plan shall provide that each pharmacy 
                that dispenses a covered part D drug shall inform an 
                enrollee of the price charged for such drug under the 
                prescription drug plan.
                    ``(B) Timing of notice.--The information under 
                subparagraph (A) shall be provided at the time of 
                purchase of the drug involved, including for purchases 
                of covered part D drugs by mail order.''.

SEC. 4. PRIORITIZING STUDIES OF COMPARATIVE CLINICAL EFFECTIVENESS OF 
              COVERED PART D DRUGS.

    (a) Priorities.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        develop a comprehensive prioritized list of comparative 
        clinical effectiveness studies that are most critical to 
        building the evidence needed to advance value-based purchasing 
        of covered part D drugs (as defined in section 1860D-2(e) of 
        the Social Security Act (42 U.S.C. 1395w-102(e)) under the 
        Medicare prescription drug program under part D of title XVIII 
        of such Act.
            (2) Requirements.--
                    (A) Development of list.--In developing the list 
                under paragraph (1), the Secretary shall take into 
                account--
                            (i) the work the Agency for Healthcare 
                        Research and Quality has already done to 
                        identify needed comparative clinical 
                        effectiveness and safety research on 
                        prescription drugs, including the work 
                        identifying issues for which existing 
                        scientific evidence is insufficient under 
                        subsection (a)(3)(A)(ii) of section 1013 of the 
                        Medicare Prescription Drug, Improvement, and 
                        Modernization Act of 2003 (42 U.S.C. 299b-7);
                            (ii) the initial list of medical conditions 
                        considered a priority for research that was 
                        developed in response to the requirements of 
                        subsection (a)(2)(B) of such section 1013;
                            (iii) areas where patients and doctors are 
                        most lacking the information needed to make the 
                        best decisions regarding covered part D drugs, 
                        such as the areas where there is a large gap in 
                        knowledge of drug therapies and areas that 
                        involve the most widely prescribed covered part 
                        D drugs; and
                            (iv) any advice provided by the advisory 
                        committee established under paragraph (3).
                    (B) Contents of prioritized list.--
                            (i) Specification of items, services, and 
                        methodology.--The prioritized list shall 
                        specify the items and services to be evaluated, 
                        as well as the general methodology that should 
                        be used to conduct each study identified as a 
                        priority on the list, taking into consideration 
                        the full range of methodologies available, from 
                        systematic reviews to clinical trials.
                            (ii) Studies included.--The studies 
                        included on the prioritized list may include 
                        studies that compare a covered part D drug to 
                        any other drug (or biological product), item, 
                        or service that is covered under the Medicare 
                        program.
                    (C) Report to congress.--
                            (i) In general.--Not later than 1 year 
                        after the date of enactment of this Act and 
                        subject to the requirements under clause (ii), 
                        the Secretary shall submit to Congress a report 
                        that contains the following:
                                    (I) The prioritized list developed 
                                under paragraph (1) and plans for the 
                                conduct of studies identified as a 
                                priority on such list.
                                    (II) A summary of the information 
                                described in clauses (i) through (iv) 
                                of subparagraph (A).
                                    (III) An explanation of how the 
                                Secretary took into account the 
                                information described in such clauses 
                                (i) through (iv) in developing the 
                                prioritized list and in preparing the 
                                report.
                                    (IV) The rationale for why the 
                                Secretary included the studies 
                                identified as a priority on such list.
                            (ii) Submission of draft report.--Before 
                        submitting the report under clause (i), the 
                        Secretary shall--
                                    (I) submit to Congress a draft 
                                version of the report;
                                    (II) make such draft version 
                                available to the public; and
                                    (III) provide a 60-day period for 
                                public comment on such draft version.
                    (D) Availability of report.--The Secretary shall 
                make the report submitted under subparagraph (C)(i) 
                available to the public.
            (3) Establishment of advisory committee.--
                    (A) Establishment.--The Secretary shall establish 
                an advisory committee for the purpose of providing 
                advice to the Secretary on setting priorities for 
                comparative clinical effectiveness studies across all 
                agencies of the Department of Health and Human 
                Services. The Secretary shall make available to the 
                public any advice provided to the Secretary by the 
                advisory committee.
                    (B) Membership.--
                            (i) In general.--The advisory committee 
                        shall include a diverse range of public and 
                        private clinical experts, stakeholders, and 
                        interests from the following groups:
                                    (I) The medical and health 
                                industries.
                                    (II) Patients and representatives 
                                of patients.
                                    (III) Researchers.
                                    (IV) Government.
                            (ii) No majority of membership from any one 
                        group.--The Secretary shall ensure that the 
                        advisory committee does not have a majority of 
                        members from any one of the groups described in 
                        subclauses (I) through (IV) of clause (i).
                    (C) Public comment.--The Advisory committee shall 
                provide a substantial opportunity for public comment by 
                accepting oral and written comments from the public 
                prior to making any recommendations or providing any 
                advice to the Secretary.
    (b) Rule of Construction.--Nothing in this section shall be 
construed to limit the authority of the Secretary--
            (1) to prioritize comparative clinical effectiveness 
        research needs for procedures, devices, diagnostics, or other 
        medical interventions; or
            (2) to conduct any study on the list developed under 
        subsection (a)(1) or any other study determined appropriate by 
        the Secretary.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 5. AUTHORIZING CONSIDERATION OF COMPARATIVE CLINICAL EFFECTIVENESS 
              STUDIES IN DEVELOPING AND REVIEWING FORMULARIES UNDER THE 
              MEDICARE PRESCRIPTION DRUG PROGRAM.

    (a) In General.--Section 1860D-4(b)(3)(B) of the Social Security 
Act (42 U.S.C. 1395w-104(b)(3)(B)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(iii) take into account relevant 
                        comparative clinical effectiveness studies.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to plan years beginning on or after January 1, 2007.

SEC. 6. SENSE OF THE SENATE REGARDING THE RESOURCE STANDARD USED TO 
              DETERMINE ELIGIBILITY FOR PREMIUM AND COST-SHARING 
              SUBSIDIES UNDER PART D.

    (a) Findings.--The Senate makes the following findings:
            (1) Currently, beneficiaries enrolled in the Medicare part 
        D prescription drug program must satisfy a resource standard in 
        order to be eligible for the low-income subsidy.
            (2) The resource standard used to determine eligibility for 
        the low-income subsidy has resulted in many Medicare 
        beneficiaries who are in financial need being disqualified from 
        receiving additional assistance.
            (3) Under S. 1 from the 108th Congress, as passed by the 
        Senate, beneficiaries were not subjected to a resource standard 
        to qualify for additional assistance.
    (b) Sense of the Senate.--It is the Sense of the Senate that 
Congress should revisit the resource standard used to determine the 
eligibility of individuals for premium and cost-sharing subsidies under 
section 1860D-14 of the Social Security Act (42 U.S.C. 1395w-114).

SEC. 7. SENSE OF THE SENATE REGARDING PHARMACY ISSUES UNDER PART D.

    (a) Findings.--
            (1) Pharmacists play a critical role in delivering 
        prescription drugs to Medicare beneficiaries enrolled in 
        prescription drug plans and MA-PD plans under the Medicare part 
        D prescription drug program.
            (2) Pharmacists have encountered difficulties in providing 
        services under their contracts with PDP sponsors offering 
        prescription drug plans and MA organizations offering MA-PD 
        plans under part D.
    (b) Sense of the Senate.--It is the sense of the Senate that 
Congress should address issues related to pharmacies under the Medicare 
part D prescription drug program.
                                                       Calendar No. 118

110th CONGRESS

  1st Session

                                  S. 3

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                             April 13, 2007

                       Reported with an amendment