[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 4024 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 4024

 To reduce the costs of prescription drugs for Medicare beneficiaries 
  and to guarantee access to comprehensive prescription drug coverage 
     under part D of the Medicare program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 10, 2010

 Mr. Wyden (for himself and Ms. Snowe) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To reduce the costs of prescription drugs for Medicare beneficiaries 
  and to guarantee access to comprehensive prescription drug coverage 
     under part D of the Medicare program, and for other purposes.

    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 ``Medicare Enhancements for Needed 
Drugs Act of 2010''.

SEC. 2. GAO STUDIES AND REPORTS ON PRICES OF PRESCRIPTION DRUGS.

    (a) Review and Reports on Retail Prices of Prescription Drugs.--
            (1) Initial review.--The Comptroller General of the United 
        States shall conduct a review of the retail cost of 
        prescription drugs in the United States during 2004 through 
        2010, with an emphasis on the prescription drugs most utilized 
        for individuals age 65 or older.
            (2) Subsequent review.--After conducting the review under 
        paragraph (1), the Comptroller General shall continuously 
        review the retail cost of such drugs through December 31, 2014, 
        to determine the changes in such costs.
            (3) Reports.--
                    (A) Initial review.--Not later than 90 days after 
                the date of enactment of this Act, the Comptroller 
                General shall submit to Congress a report on the 
                initial review conducted under paragraph (1).
                    (B) Subsequent review.--Not later than April 1 of 
                2012, 2013, 2014, and 2015, the Comptroller General 
                shall submit to Congress a report on the subsequent 
                review conducted under paragraph (2).
    (b) Annual GAO Study and Report on Retail and Acquisition Prices of 
Certain Prescription Drugs.--
            (1) Ongoing study.--The Comptroller General of the United 
        States shall conduct an ongoing study that compares the average 
        retail cost in the United States for each of the 20 most 
        utilized prescription drugs for individuals age 65 or older 
        with--
                    (A) the average price at which private health plans 
                acquire each such drug;
                    (B) the average price at which the Department of 
                Defense under the Defense Health Program acquires each 
                such drug;
                    (C) the average price at which the Department of 
                Veterans Affairs under the laws administered by the 
                Secretary of Veterans Affairs acquires each such drug; 
                and
                    (D) the average negotiated price for each such drug 
                that eligible beneficiaries enrolled in a prescription 
                drug plan under part D of title XVIII of the Social 
                Security Act that provides only basic prescription drug 
                coverage have access to under such plans.
            (2) Annual report.--Not later than October 1, 2011, and 
        annually thereafter, the Comptroller General shall submit to 
        Congress a report on the study conducted under paragraph (1), 
        together with such recommendations as the Comptroller General 
        determines appropriate.

SEC. 3. INCLUSION OF AVERAGE AGGREGATE BENEFICIARY COSTS AND SAVINGS IN 
              COMPARATIVE INFORMATION FOR BASIC MEDICARE PRESCRIPTION 
              DRUG PLANS.

    Section 1860D-1(c)(3) of the Social Security Act (42 U.S.C. 1395w-
101(c)(3)) is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by striking 
                ``subparagraph (B)'' and inserting ``subparagraphs (B) 
                and (C)''; and
                    (B) by adding at the end the following new clause:
                            ``(vi) Average aggregate beneficiary costs 
                        and savings.--With respect to plan years 
                        beginning on or after January 1, 2012, the 
                        average aggregate costs, including deductibles 
                        and other cost-sharing, that a beneficiary will 
                        incur for covered part D drugs in the year 
                        under the plan compared to the average 
                        aggregate costs that an eligible beneficiary 
                        with no prescription drug coverage will incur 
                        for covered part D drugs in the year.''; and
            (2) by adding at the end the following new subparagraph:
                    ``(C) Average aggregate beneficiary costs and 
                savings information only for basic prescription drug 
                plans.--The Secretary shall not provide comparative 
                information under subparagraph (A)(vi) with respect 
                to--
                            ``(i) a prescription drug plan that 
                        provides supplemental prescription drug 
                        coverage; or
                            ``(ii) a Medicare Advantage plan.''.

SEC. 4. 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:
    ``(i) Authority To Negotiate Prices With Manufacturers.--
            ``(1) In general.--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) Mandatory responsibilities.--The Secretary shall be 
        required to--
                    ``(A) negotiate contracts with manufacturers of 
                covered part D drugs when the drug is a single source 
                drug without a therapeutic equivalent;
                    ``(B) participate in the negotiation of contracts 
                with respect to any covered part D drug upon the 
                request of an approved prescription drug plan or MA-PD 
                plan;
                    ``(C) participate in the negotiation of contracts 
                for any covered part D drugs for which there is a 
                substantial amount of Federal research funding in the 
                development of the drug; and
                    ``(D) negotiate contracts with manufacturers of 
                covered part D drugs for each standard fallback 
                prescription drug plan under subsection (g) and each 
                comprehensive fallback prescription drug plan under 
                subsection (k).
            ``(3) Rule of construction.--Nothing in paragraph (2) shall 
        be construed to limit the authority of the Secretary under 
        paragraph (1) to the mandatory responsibilities under paragraph 
        (2).
            ``(4) No particular formulary or price structure.--In order 
        to promote competition under this part and in carrying out this 
        part, the Secretary may not require a particular formulary or 
        institute a price structure for the reimbursement of covered 
        part D drugs.
            ``(5) Use of savings.--The savings to the Medicare 
        Prescription Drug Account through the use of the authority 
        provided under this subsection (including the mandatory 
        responsibilities under paragraph (2)) shall be used to 
        strengthen the program under this part and to reduce the 
        Federal deficit.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of enactment of this Act.

SEC. 5. ACCESS TO A COMPREHENSIVE MEDICARE PRESCRIPTION DRUG PLAN.

    (a) Requirement for Access.--Section 1860D-3(a) of the Social 
Security Act (42 U.S.C. 1395w-103(a)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``Choice of at least two plans in 
                each area.--The Secretary'' and inserting ``Choice.--
                    ``(A) Choice of at least two plans in each area.--
                The Secretary''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(B) Choice of a comprehensive prescription drug 
                plan.--In addition to the requirement under 
                subparagraph (A), the Secretary shall ensure that each 
                part D eligible individual has available a choice of 
                enrollment in a comprehensive prescription drug plan 
                (as defined in paragraph (4)) in the area in which the 
                individual resides. In any such case in which such a 
                plan is not available, the part D eligible individual 
                shall be given the opportunity to enroll in a 
                comprehensive fallback prescription drug plan.''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Comprehensive prescription drug plan.--For purposes 
        of this section, the term `comprehensive prescription drug 
        plan' means a prescription drug plan that provides coverage of 
        covered part D drugs after an individual has reached the 
        initial coverage limit under paragraph (3) of section 1860D-
        2(b) but has not reached the annual out-of-pocket threshold 
        under paragraph (4)(B) of such section that is the same as the 
        coverage for such drugs that is provided under the plan after 
        the individual has met the deductible under paragraph (1) of 
        such section but has not reached such initial coverage 
        limit.''.
    (b) Comprehensive Fallback Prescription Drug Plan.--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) Guaranteeing Access to Comprehensive Coverage.--
            ``(1) Solicitation of bids.--Separate from the bidding 
        process under subsections (b) and (g), the Secretary shall 
        provide for a process for the solicitation of bids from 
        eligible comprehensive fallback entities (as defined in 
        paragraph (2)) for the offering in all comprehensive fallback 
        service areas (as defined in paragraph (3)) in one or more PDP 
        regions of a comprehensive fallback prescription drug plan (as 
        defined in paragraph (4)) during the contract period specified 
        in subsection (g)(5) (as made applicable to this subsection 
        under paragraph (6)).
            ``(2) Eligible comprehensive fallback entity.--For purposes 
        of this section, the term `eligible comprehensive fallback 
        entity' means, with respect to all comprehensive fallback 
        service areas in a PDP region for a contract period, an entity 
        that--
                    ``(A) meets the requirements to be a PDP sponsor 
                (or would meet such requirements but for the fact that 
                the entity is not a risk-bearing entity); and
                    ``(B) does not submit a bid under section 1860D-
                11(b) for any prescription drug plan for any PDP region 
                for the first year of such contract period.
        For purposes of subparagraph (B), an entity shall be treated as 
        submitting a bid with respect to a prescription drug plan if 
        the entity is acting as a subcontractor of a PDP sponsor that 
        is offering such a plan. The previous sentence shall not apply 
        to entities that are subcontractors of an MA organization 
        except insofar as such organization is acting as a PDP sponsor 
        with respect to a prescription drug plan.
            ``(3) Fallback service area.--For purposes of this 
        subsection, the term `comprehensive fallback service area' 
        means, for a PDP region with respect to a year, any area within 
        such region for which the Secretary determines before the 
        beginning of the year that the access requirements of the first 
        sentence of section 1860D-3(a)(1)(B) will not be met for part D 
        eligible individuals residing in the area for the year.
            ``(4) Comprehensive fallback prescription drug plan.--For 
        purposes of this part, the term `comprehensive fallback 
        prescription drug plan' means a prescription drug plan that--
                    ``(A) offers the standard prescription drug 
                coverage and access to negotiated prices described in 
                section 1860D-2(a)(1)(A);
                    ``(B) offers coverage of covered part D drugs after 
                an individual has reached the initial coverage limit 
                under paragraph (3) of section 1860D-2(b) but has not 
                reached the annual out-of-pocket threshold under 
                paragraph (4)(B) of such section that is the same as 
                the coverage for such drugs that is offered after the 
                individual has met the deductible under paragraph (1) 
                of such section but has not reached such initial 
                coverage limit; and
                    ``(C) meets such other requirements as the 
                Secretary may specify.
            ``(5) Monthly beneficiary premium.--Except as provided in 
        section 1860D-13(b) (relating to late enrollment penalty) and 
        subject to section 1860D-14 (relating to low-income 
        assistance), the monthly beneficiary premium to be charged 
        under a comprehensive fallback prescription drug plan offered 
        in all comprehensive fallback service areas in a PDP region 
        shall be uniform and shall be an amount equal to--
                    ``(A) 25.5 percent of an amount equal to the 
                Secretary's estimate of the average monthly per capita 
                actuarial cost, including administrative expenses, 
                under the comprehensive fallback prescription drug plan 
                of providing the coverage described in paragraph (4)(A) 
                in the region, as calculated by the Chief Actuary of 
                the Centers for Medicare & Medicaid Services; and
                    ``(B) 100 percent of an amount equal to the 
                Secretary's estimate of the average monthly per capita 
                actuarial cost, including administrative expenses, 
                under the comprehensive fallback prescription drug plan 
                of providing the coverage described in paragraph (4)(B) 
                in the region, as calculated by the Chief Actuary of 
                the Centers for Medicare & Medicaid Services.
        In calculating such administrative expenses, the Chief Actuary 
        shall use a factor that is based on similar expenses of 
        prescription drug plans that are not standard or comprehensive 
        fallback prescription drug plans.
            ``(6) Incorporation of standard fallback prescription drug 
        plan provisions.--The provisions of paragraphs (1)(B), (5), and 
        (7) of subsection (g) shall apply to comprehensive fallback 
        prescription drug plans and entities offering such plans in the 
        same manner as such provisions apply to standard fallback 
        prescription drug plans and entities offering such plans.
            ``(7) Same entity may offer both fallback prescription drug 
        plans in an area.--The Secretary may award a contract to an 
        entity under this subsection with respect to an area and period 
        and a contract under subsection (g) with respect to the same 
        area and period.''.
    (c) Conforming Amendments.--
            (1) Access.--Section 1860D-3 of the Social Security Act (42 
        U.S.C. 1395w-103) is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (1)(A) of subsection (a), 
                        as redesignated by subsection (a), by inserting 
                        ``standard'' before ``fallback''; and
                            (ii) in paragraph (2), by striking 
                        ``paragraph (1)'' and inserting ``paragraph 
                        (1)(A)''; and
                    (B) in subsection (b)(2), by striking ``fallback 
                prescription drug plan for that area under section 
                1860D-11(g)'' and inserting ``standard or comprehensive 
                fallback prescription drug plan for that area under 
                subsections (g) and (k) of section 1860D-11, as 
                applicable''.
            (2) Limited risk plans.--Section 1860D-11(f) of the Social 
        Security Act (42 U.S.C. 1395w-111(f)) is amended--
                    (A) in paragraph (1)--
                            (i) by striking ``1860D-3(a)'' and 
                        inserting ``1860D-3(a)(1)(A)''; and
                            (ii) by inserting ``standard'' before 
                        ``fallback''; and
                    (B) in paragraph (2)(A), by striking ``1860D-3(a)'' 
                and inserting ``1860D-3(a)(1)(A)''; and
                    (C) in each of subparagraphs (A) and (B) of 
                paragraph (4), by striking ``a fallback'' and inserting 
                ``a standard or comprehensive fallback''.
            (3) Standard fallback prescription drug plan.--Section 
        1860D-11(g) of the Social Security Act (42 U.S.C. 1395w-111(g)) 
        is amended--
                    (A) in the heading, by inserting ``Standard 
                Prescription Drug'' after ``Access to'';
                    (B) by inserting ``standard'' before ``fallback'' 
                each place it appears;
                    (C) by striking ``Fallback'' each place it appears 
                and inserting ``Standard fallback'';
                    (D) by inserting ``standard'' before ``fallback'' 
                each place it appears; and
                    (E) in paragraph (3), by striking ``1860D-3(a)'' 
                and inserting ``1860D-3(a)(1)(A)''.
            (4) Annual report.--Section 1860D-11(h) of the Social 
        Security Act (42 U.S.C. 1395w-111(h)) is amended by striking 
        ``(f) and (g)'' and inserting ``(f), (g), and (k)''.
            (5) Limitation on entities offering fallback prescription 
        drug plans.--Section 1860D-12(b)(2) of the Social Security Act 
        (42 U.S.C. 1395w-112(b)(2)) is amended--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``a fallback'' and inserting ``a standard or 
                comprehensive fallback'';
                    (B) in subparagraph (A)--
                            (i) by striking ``section 1860D-11(g)'' and 
                        inserting ``subsection (g) or (k) of section 
                        1860D-11'';
                            (ii) by striking ``such section'' and 
                        inserting ``such subsections, as applicable''; 
                        and
                            (iii) by striking ``a fallback'' and 
                        inserting ``a standard or comprehensive 
                        fallback'';
                    (C) in subparagraph (B), by striking ``a fallback'' 
                and inserting ``a standard or comprehensive fallback'';
                    (D) in subparagraph (C), by striking ``a fallback'' 
                and inserting ``a standard or comprehensive fallback'' 
                and
                    (E) in the flush matter following subparagraph (C), 
                by striking ``a fallback'' and inserting ``a standard 
                or comprehensive fallback''.
            (6) Collection of premium.--Section 1860D-13(c)(3) of the 
        Social Security Act (42 U.S.C. 1395w-113(c)(3)) is amended by 
        striking ``a fallback'' and inserting ``a standard or 
        comprehensive fallback''.
            (7) Payment.--Section 1860D-15(g) of the Social Security 
        Act (42 U.S.C. 1395w-115(g)) is amended by striking 
        ``offering'' and all that follows and inserting the following: 
        ``offering--
            ``(1) a standard prescription drug plan (as defined in 
        paragraph (4) of section 1860D-11(g)), the amount payable shall 
        be the amounts determined under the contract for such plan 
        pursuant to paragraph (5) of such section; and
            ``(2) a comprehensive prescription drug plan (as defined in 
        paragraph (4) of section 1860D-11(k)), the amount payable shall 
        be the amounts determined under the contract for such plan 
        pursuant to such paragraph (5) (as made applicable to section 
        1860D-11(k) under paragraph (6) of such section).''.
            (8) Payment from account.--Section 1860D-16(b)(1)(B) of the 
        Social Security Act (42 U.S.C. 1395w-116(b)(1)(B)) is amended 
        by inserting ``standard and comprehensive'' before 
        ``fallback''.
            (9) Definition.--Section 1860D-41(a)(5) of the Social 
        Security Act (42 U.S.C. 1395w-151(a)(5)) is amended to read as 
        follows:
            ``(5) Standard fallback prescription drug plan; 
        comprehensive fallback prescription drug plan.--The terms 
        `standard fallback prescription drug plan' and `comprehensive 
        fallback prescription drug plan' have the meaning given those 
        terms in subsection (g)(4) and (k)(4), respectively, of section 
        1860D-11.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2012.
                                 <all>