[Congressional Record Volume 155, Number 85 (Tuesday, June 9, 2009)]
[Senate]
[Pages S6383-S6384]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER (for himself and Mr. Roberts):
  S. 1221. A bill to amend title XVIII of the Social Security Act to 
ensure more appropriate payment amounts for drugs and biologicals under 
part B of the Medicare Program by excluding customary prompt pay 
discounts extended to wholesalers from the manufacturer's average sales 
price; to the Committee on Finance.
  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation that will help ensure Medicare beneficiaries' 
access to cancer drugs provided by community-based cancer clinics.

[[Page S6384]]

  Cancer takes a great toll on our families, friends, and our Nation. 
On average, one American dies from cancer each minute and the overall 
cost of cancer to the U.S. is $220 billion annually. While these 
statistics are daunting, the rate of cancer deaths in the U.S. has 
decreased since 1993. This decrease is the result of earlier detection 
and diagnosis, more effective and targeted cancer therapies, and 
greater accessibility to quality care provided by oncologists. These 
vital services have allowed millions of individuals to lead healthy and 
productive lives after successfully battling cancer.
  Leading the treatment against cancer, community cancer clinics treat 
84 percent of Americans with cancer. Community cancer clinics are 
freestanding outpatient facilities that provide comprehensive cancer 
care in physician's office settings located in patients' communities. 
These clinics are especially critical in rural areas where access to 
larger cancer clinics is not available.
  In 2003, the Medicare Prescription Drug Improvement and Modernization 
Act was signed into law. This legislation contained numerous provisions 
that were beneficial to America's seniors and medical facilities; 
however, it also provided a reduction in Medicare's reimbursement for 
cancer treatment. The new Medicare drug reimbursement rates, based on 
average sales price or ASP, are artificially lowered by the inclusion 
of prompt payment discounts. These discounts are provided by the 
pharmaceutical manufacturer to the distributor and are a financing 
mechanism between the manufacturer and the distributor for prompt 
payment of invoices. As such, they are not passed on to community 
oncology clinics, which purchase drugs from distributors. However, 
pharmaceutical manufacturers are required by statute to include all 
discounts and rebates in the calculation of ASP, including prompt 
payment discounts that are not provided to community oncology clinics. 
The inclusion of these prompt payment discounts results in the 
artificially lowering of Medicare drug reimbursement rates by 
approximately 2 percent. Community cancer clinics are reporting that 
they are finding more cancer drugs reimbursed by Medicare at a rate 
less than their cost.
  The Congressional Budget Office estimated that Medicare 
reimbursements to oncologists would be reduced by $4.2 billion from 
2004-2013. PricewaterhouseCoopers estimated that reductions will reach 
$14.7 billion over that time. This increased reduction will have a 
debilitating effect on oncologists' ability to provide cancer treatment 
to Medicare beneficiaries, especially those in the community setting.
  This legislation will remove manufacturer to distributor prompt 
payment discounts from the calculation of ASP to provide a more 
appropriate Medicare drug reimbursement and will help ensure Medicare 
beneficiaries' access to community-based cancer treatment. I encourage 
my colleagues to work with me to move this legislation forward 
promptly.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1221

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

     SECTION 1. EXCLUSION OF CUSTOMARY PROMPT PAY DISCOUNTS 
                   EXTENDED TO WHOLESALERS FROM MANUFACTURER'S 
                   AVERAGE SALES PRICE FOR PAYMENTS FOR DRUGS AND 
                   BIOLOGICALS UNDER MEDICARE PART B.

       (a) In General.--Section 1847A(c)(3) of the Social Security 
     Act (42 U.S.C. 1395w-3a(c)(3)) is amended--
       (1) in the first sentence, by inserting ``(other than 
     customary prompt pay discounts extended to wholesalers)'' 
     after ``prompt pay discounts''; and
       (2) in the second sentence, by inserting ``(other than 
     customary prompt pay discounts extended to wholesalers)'' 
     after ``other price concessions''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to drugs and biologicals that are furnished on or 
     after January 1, 2010.
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