To amend the Public Health Service Act with respect to health professions programs regarding the practice of pharmacy.

Summary: Pharmacy Education Aid Act of 2003 - Amends the Public Health Service Act to permit payments of up to $35,000 on behalf of a qualifying individual with a pharmacy degree for the repayment of pharmacy education loans for each year (two-year minimum) that such person serves in a health care facility with a critical shortage of pharmacists. Provides for: (1) additional tax liability payments; (2) financial need preference; and (3) Federal repayment for recipient breach of agreement unless otherwise waived.

Directs the Secretary to make payments of up to $35,000 on behalf of a qualifying individual with a pharmacy degree or in the final year of such study for the repayment of pharmacy educational loans for each year (two-year minimum) that such person serves as a faculty member at a school of pharmacy which provides assistance to: (1) medically underserved areas; (2) prisons; (3) veterans or the armed forces; (4) the Indian Health Service; or (5) a disproportionate share hospital under the Social Security Act .

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Pharmacy Education Aid Act of 
2003''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Pharmacists are an important link in our Nation's 
        health care system. A critical shortage of pharmacists is 
        threatening the ability of pharmacies to continue to provide 
        important prescription related services.
            (2) In the landmark report entitled ``To Err is Human: 
        Building a Safer Health System'', the Institute of Medicine 
        reported that medication errors can be partially attributed to 
        factors that are indicative of a shortage of pharmacists (such 
        as too many customers, numerous distractions, and staff 
        shortages).
            (3) Congress acknowledged in the Healthcare Research and 
        Quality Act of 1999 (Public Law 106-129) a growing demand for 
        pharmacists by requiring the Secretary of Health and Human 
        Services to conduct a study to determine whether there is a 
        shortage of pharmacists in the United States and, if so, to 
        what extent.
            (4) As a result of Congress' concern about how a shortage 
        of pharmacists would impact the public health, the Secretary of 
        Health and Human Services published a report entitled ``The 
        Pharmacist Workforce: A Study in Supply and Demand for 
        Pharmacists'' in December of 2000.
            (5) ``The Pharmacist Workforce: A Study in Supply and 
        Demand for Pharmacists'' found that ``While the overall supply 
        of pharmacists has increased in the past decade, there has been 
        an unprecedented demand for pharmacists and for pharmaceutical 
        care services, which has not been met by the currently 
        available supply'' and that the ``evidence clearly indicates 
        the emergence of a shortage of pharmacists over the past two 
        years''.
            (6) The same study also found that ``The most striking 
        evidence of a pharmacist shortage stems from demonstrably 
        increased vacancy rates, difficulties in hiring, and 
        unprecedented increases in the volume and range of activities 
        demanded of today's pharmacist.''
            (7) The study found that ``The factors causing the current 
        shortage are of a nature not likely to abate in the near future 
        without fundamental changes in pharmacy practice and 
        education.'' The study projects that the number of 
        prescriptions filled by community pharmacists will increase by 
        20 percent by 2004. In contrast, the number of community 
        pharmacists is expected to increase by only 6 percent by 2005.
            (8) Regarding access to pharmacy services in rural areas, 
        the study found that ``Remoteness, isolation from other 
        professionals, lower economic returns, reduced opportunities 
        for advancement, and other rural practice characteristics 
        remain obstacles'' to attracting pharmacists.
            (9) In June 2002, the American Hospital Association's 
        Commission on Workforce for Hospitals and Health Systems 
        released a report entitled ``In Our Hands: How Hospital Leaders 
        Can Build A Thriving Workforce''. The report included a finding 
        that 46 percent of our Nation's hospitals are experiencing a 
        shortage of pharmacists, with hospitals averaging a vacancy 
        rate for pharmacists of 12.7 percent.
            (10) The demand for pharmacists will increase as 
        prescription drug use continues to grow.

SEC. 3. HEALTH PROFESSIONS PROGRAMS RELATED TO THE PRACTICE OF 
              PHARMACY.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 
294n et seq.) is amended by adding at the end the following:

              ``Subpart 3--Pharmacy Workforce Development

``SEC. 781. LOAN REPAYMENT PROGRAM FOR PHARMACISTS SERVING IN CRITICAL 
              SHORTAGE FACILITIES.

    ``(a) In General.--In the case of any individual--
            ``(1) who has received a baccalaureate degree in pharmacy 
        or a Doctor of Pharmacy degree from an accredited program;
            ``(2) who obtained an educational loan for pharmacy 
        education costs; and
            ``(3) who is licensed without restrictions in the State in 
        which the designated health care facility is located;
the Secretary may enter into an agreement with such individual who 
agrees to serve as a full-time pharmacist for a period of not less than 
2 years at a designated health care facility, to make payments in 
accordance with subsection (b), for and on behalf of that individual, 
on the principal of and interest on any loan of that individual 
described in paragraph (2) which is outstanding on the date the 
individual begins such service.
    ``(b) Manner of Payments.--
            ``(1) In general.--The payments described in subsection (a) 
        may consist of payment, in accordance with paragraph (2), on 
        behalf of the individual of the principal, interest, and 
        related expenses on government and commercial loans received by 
the individual regarding the undergraduate or graduate education of the 
individual (or both), which loans were made for--
                    ``(A) tuition expenses;
                    ``(B) all other reasonable educational expenses, 
                including fees, books, and laboratory expenses, 
                incurred by the individual; or
                    ``(C) reasonable living expenses as determined by 
                the Secretary.
            ``(2) Payments for years served.--
                    ``(A) In general.--For each year of obligated 
                service that an individual contracts to serve under 
                subsection (a) the Secretary may pay up to $35,000 on 
                behalf of the individual for loans described in 
                paragraph (1). In making a determination of the amount 
                to pay for a year of such service by an individual, the 
                Secretary shall consider the extent to which each such 
                determination--
                            ``(i) affects the ability of the Secretary 
                        to maximize the number of agreements that may 
                        be provided under this section from the amounts 
                        appropriated for such agreements;
                            ``(ii) provides an incentive to serve in 
                        areas with the greatest shortages of 
                        pharmacists; and
                            ``(iii) provides an incentive with respect 
                        to the pharmacist involved remaining in the 
                        area and continuing to provide pharmacy 
                        services after the completion of the period of 
                        obligated service under agreement.
                    ``(B) Repayment schedule.--Any arrangement made by 
                the Secretary for the making of loan repayments in 
                accordance with this subsection shall provide that any 
                repayments for a year of obligated service shall be 
                made not later than the end of the fiscal year in which 
                the individual completes such year of service.
            ``(3) Tax liability.--For the purpose of providing 
        reimbursements for tax liability resulting from payments under 
        paragraph (2) on behalf of an individual--
                    ``(A) the Secretary shall, in addition to such 
                payments, make payments to the individual in an amount 
                equal to 39 percent of the total amount of loan 
                repayments made for the taxable year involved; and
                    ``(B) may make such additional payments as the 
                Secretary determines to be appropriate with respect to 
                such purpose.
            ``(4) Payment schedule.--The Secretary may enter into an 
        agreement with the holder of any loan for which payments are 
        made under this section to establish a schedule for the making 
        of such payments.
    ``(c) Preferences.--In entering into agreements under subsection 
(a), the Secretary shall give preference to qualified applicants with 
the greatest financial need.
    ``(d) Reports.--
            ``(1) Annual report.--Not later than 18 months after the 
        date of enactment of the Pharmacy Education Aid Act of 2003, 
        and annually thereafter, the Secretary shall prepare and submit 
        to Congress a report describing the program carried out under 
        this section, including statements regarding--
                    ``(A) the number of applicants and contract 
                recipients;
                    ``(B) the amount of loan repayments made;
                    ``(C) which educational institution the recipients 
                attended;
                    ``(D) the number and practice locations of the loan 
                repayment recipients at health care facilities with a 
                critical shortage of pharmacists;
                    ``(E) the default rate and actions required;
                    ``(F) the amount of outstanding default funds of 
                the loan repayment program;
                    ``(G) to the extent that it can be determined, the 
                reason for the default;
                    ``(H) the demographics of the individuals 
                participating in the loan repayment program; and
                    ``(I) an evaluation of the overall costs and 
                benefits of the program.
            ``(2) 5-year report.--Not later than 5 years after the date 
        of enactment of the Pharmacy Education Aid Act of 2003, the 
        Secretary shall prepare and submit to Congress a report on how 
        the program carried out under this section interacts with other 
        Federal loan repayment programs for pharmacists and determining 
        the relative effectiveness of such programs in increasing 
        pharmacists practicing in underserved areas.
    ``(e) Application of Certain Provisions.--
            ``(1) In general.--The provisions of section 338C, 338G, 
        and 338I shall apply to the program established under this 
        section in the same manner and to the same extent as such 
        provisions apply to the National Health Service Corps Loan 
        Repayment Program under subpart III of part D of title III, 
        including the applicability of provisions regarding 
        reimbursements for increased tax liability and bankruptcy.
            ``(2) Breach of agreement.--An individual who enters into 
        an agreement under subsection (a) shall be liable to the 
        Federal Government for the amount of the award under such 
        agreement (including amounts provided for expenses related to 
        such attendance), and for interest on such amount at the 
        maximum legal prevailing rate, if the individual fails to 
        provide health services in accordance with the program under 
        this section for the period of time applicable under the 
        program.
            ``(3) Waiver or suspension of liability.--In the case of an 
        individual or health facility making an agreement for purposes 
        of subsection (a), the Secretary shall provide for the waiver 
        or suspension of liability under paragraph (2) if compliance by 
        the individual or the health facility, as the case may be, with 
        the agreement involved is impossible, or would involve extreme 
        hardship to the individual or facility, and if enforcement of 
the agreements with respect to the individual or facility would be 
unconscionable.
            ``(4) Date certain for recovery.--Subject to paragraph (3), 
        any amount that the Federal Government is entitled to recover 
        under paragraph (2) shall be paid to the United States not 
        later than the expiration of the 3-year period beginning on the 
        date the United States becomes so entitled.
            ``(5) Availability.--Amounts recovered under paragraph (2) 
        with respect to a program under this section shall be available 
        for the purposes of such program, and shall remain available 
        for such purposes until expended.
    ``(f) Definition.--In this section, the term `health care facility' 
means a facility with a critical shortage of pharmacists as determined 
by the Secretary.
    ``(g) Authorization of Appropriations.--For the purpose of payments 
under agreements entered into under subsection (a), there are 
authorized to be appropriated such sums as may be necessary for each of 
fiscal years 2004 through 2008.

``SEC. 782. PHARMACY FACULTY LOAN REPAYMENT PROGRAM.

    ``(a) Establishment of Program.--The Secretary shall establish a 
program under which the Secretary will enter into contracts with 
individuals described in subsection (b) and such individuals will agree 
to serve as faculty members of schools of pharmacy in consideration of 
the Federal Government agreeing to pay, for each year of such service, 
not more than $35,000 of the principal and interest of the educational 
loans of such individuals.
    ``(b) Eligible Individuals.--An individual is described in this 
subsection if such individual--
            ``(1) has a baccalaureate degree in pharmacy or a Doctor of 
        Pharmacy degree from an accredited program; or
            ``(2) is enrolled as a full-time student--
                    ``(A) in an accredited pharmacy program; and
                    ``(B) in the final year of a course of a study or 
                program, offered by such institution and approved by 
                the Secretary, leading to a baccalaureate degree in 
                pharmacy or a Doctor of Pharmacy degree from such a 
                school.
    ``(c) Requirements Regarding Faculty Positions.--The Secretary may 
not enter into a contract under subsection (a) unless--
            ``(1) the individual involved has entered into a contract 
        with a school of pharmacy to serve as a member of the faculty 
        of the school for not less than 2 years; and
            ``(2) the contract referred to in paragraph (1) provides 
        that--
                    ``(A) the school will, for each year for which the 
                individual will serve as a member of the faculty under 
                contract with the school, make payments of the 
                principal and interest due on the educational loans of 
                the individual for such year in an amount equal to the 
                amount of such payments made by the Secretary for the 
                year;
                    ``(B) the payments made by the school pursuant to 
                subparagraph (A) on behalf of the individual will be in 
                addition to the compensation that the individual would 
                otherwise receive for serving as a member of such 
                faculty; and
                    ``(C) the school, in making a determination of the 
                amount of compensation to be provided by the school to 
                the individual for serving as a member of the faculty, 
                will make the determination without regard to the 
                amount of payments made (or to be made) to the 
                individual by the Federal Government under subsection 
                (a).
    ``(d) Applicability of Certain Provisions.--The provisions of 
sections 338C, 338G, and 338I shall apply to the program established in 
subsection (a) to the same extent and in the same manner as such 
provisions apply to the National Health Service Corps Loan Repayment 
Program established in subpart III of part D of title III, including 
the applicability of provisions regarding reimbursements for increased 
tax liability and regarding bankruptcy.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2004 through 2008.

``SEC. 783. DEFINITIONS.

    ``In this subpart:
            ``(1) School of pharmacy.--The term `school of pharmacy' 
        means a college or school of pharmacy (as defined in section 
        799B) that, in providing clinical experience for students, 
        requires that the students serve in a clinical rotation in 
        which pharmacist services are provided at or for--
                    ``(A) a medical facility that serves a substantial 
                number of individuals who reside in or are members of a 
                medically underserved community (as so defined);
                    ``(B) an entity described in any of subparagraphs 
                (A) through (L) of section 340B(a)(4) (relating to the 
                definition of covered entity);
                    ``(C) a health care facility of the Department of 
                Veterans Affairs or of any of the Armed Forces of the 
                United States;
                    ``(D) a health care facility of the Bureau of 
                Prisons;
                    ``(E) a health care facility operated by, or with 
                funds received from, the Indian Health Service; or
                    ``(F) a disproportionate share hospital under 
                section 1923 of the Social Security Act.
            ``(2) Pharmacist services.--The term `pharmacist services' 
        includes drug therapy management services furnished by a 
        pharmacist, individually or on behalf of a pharmacy provider, 
        and such services and supplies furnished incident to the 
        pharmacist's drug therapy management services, that the 
        pharmacist is legally authorized to perform (in the State in 
        which the individual performs such services) in accordance with 
        State law (or the State regulatory mechanism provided for by 
        State law).''.