SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Making Affordable Prescriptions 
Available for Seniors Act''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) although prescription drugs represent one of the most 
        frequently used medical care interventions in treating common 
        acute and chronic diseases, many Americans, especially the 
        elderly and other vulnerable populations, are unable to afford 
        their medication because of excessive and persistent drug price 
        inflation;
            (2) between 1985 and 1991, the prices of the 20 top selling 
        prescription drugs, which account for almost a third of 
        prescription sales, rose 79 percent--nearly 4 times the general 
        rate of inflation;
            (3) prescription drug manufacturers continue to make 
        enormous profits on the backs of the elderly, poor, and other 
        vulnerable populations that are unable to afford their 
        medications;
            (4) because of the limited availability of private or 
        public prescription drug coverage for the elderly, prescription 
        drugs represent the highest out-of-pocket medical care cost for 
        3 of 4 elderly patients, surpassed only by the cost of long-
        term care services;
            (5) individuals over the age of 65 fill an average of 15 
        prescriptions a year to treat chronic health conditions 
        compared to an annual average of 5 prescriptions for those 
        under the age of 65;
            (6) 90 percent of Americans who are 60 years of age or 
        older take one or more medications daily;
            (7) The United States spends several billion dollars on 
        biomedical and related health research and in 1994 the United 
        States spent $33 billion on such research and the 
        pharmaceutical industry only spent $14 billion on such research 
        in such year; and
            (8) The pharmaceutical industry makes large profits off of 
        the sale of drugs produced from the benefit of research paid 
        for by the United States and, aside from royalties, none of 
        such profits are reimbursed back to the United States 
        taxpayers.

SEC. 3. PRESCRIPTION DRUG ASSISTANCE PROGRAM.

    The Public Health Service Act is amended by adding at the end the 
following:

          ``TITLE XXVIII--PRESCRIPTION DRUG ASSISTANCE PROGRAM

``SEC. 2801. ESTABLISHMENT.

    ``(a) In General.--The Secretary shall establish a program of 
pharmacy assistance (referred to in this title as the `program') for 
eligible persons.
    ``(b) Administration.--Pharmacy assistance shall be provided under 
the program to eligible persons in the manner that the Secretary 
determines to be the most cost-effective, including indemnification, 
vouchers, coupons, or direct provider reimbursement through the claims 
payment system under title XIX of the Social Security Act, except that 
no system of administration shall make direct cash payments to an 
eligible person before the presentation of a receipt or other invoice 
for the purchase of any covered benefit. The Secretary may implement 
utilization review, clinical management, and other administrative 
techniques used in the management of the pharmacy benefits program 
under title XIX of the Social Security Act in order to identify and 
reduce drug interactions, overutilizations, therapeutic duplications, 
or early refills.
    ``(c) Income Levels.--The Secretary may authorize local councils on 
aging, community action agencies, and home care corporations to assist 
the Secretary in determining if persons meet the income eligibility 
requirements of the program.
    ``(d) Fee.--The Secretary may require an annual enrollment fee in 
an amount not to exceed $15 to be paid to defray the administrative 
expenses of the program.
    ``(e) Other Program Items.--The Secretary shall develop copayment 
requirements and may establish deductibles to control program expenses. 
Copayment amounts may vary to promote the purchase of generic drugs and 
may be based on a sliding income scale, except that copayment shall not 
be more than $10 per prescription.

``SEC. 2802. PROFITS FROM RESEARCH.

    ``(a) In General.--Except as provided in paragraph (2), any 
manufacturer of a drug which submits, in connection with an application 
for such drug under section 351 of this Act or section 505 of the 
Federal Food, Drug, and Cosmetic Act, the results of research--
            ``(1) carried out by an entity of the National Institutes 
        of Health, or
            ``(2) under an agreement under section 12 of the Stevenson-
        Wydler Technology Innovation Act of 1980,
shall not receive approval of such application until the manufacturer 
enters into an agreement with the Secretary under which the 
manufacturer will pay to the Secretary 7 percent of the gross amount 
received by the manufacturer from sales of such drug. Such agreement 
shall specify the manner in which such gross amount shall be 
determined.
    ``(b) Exception.--The Secretary may waive the application of a 
subsection (a) to a manufacturer of a drug when the Secretary 
determines that it would be in the public interest to exempt such 
manufacturer.

``SEC. 2803. DEFINITIONS.

    ``For purposes of section 2801:
            ``(1) Covered benefits.--The term `covered benefits' means 
        prescription drugs, including insulin syringes and insulin 
        needles, and insulin, eligible for reimbursement under the 
        program as defined by the Secretary, except that within each 
        class of maintenance drugs eligible for reimbursement all such 
        prescription drugs that have been approved safe and effective 
        by the Federal Food and Drug Administration or are otherwise 
        legally marketed in the United States shall be covered under 
        the program. The term does not include experimental drugs or 
        over-the-counter pharmaceutical products except insulin. The 
        Secretary may restrict covered benefits to prescription drugs 
        manufactured by pharmaceutical companies who agree to provide 
        manufacturer rebates.
            ``(2) Eligible person.--The term `eligible person' means an 
        individual who is 65 years or older with no existing pharmacy 
        benefits or coverage from an insurance policy supplemental to 
        benefits under title XVIII of the Social Security Act or 
        pharmacy benefits or coverage from any other third party payor 
        and one whose annual income does not exceed 175 percent of the 
        Federal poverty guidelines.
            ``(3) Pharmacy assistance.--The term `pharmacy assistance' 
        means an amount not exceeding $500 in any year for each 
        eligible person to assist in the purchase of covered 
        benefits.''.
Making Affordable Prescriptions Available for Seniors Act - Amends the Public Health Service Act to establish a program of pharmacy assistance for persons at least 65 years old with no pharmacy benefits from an insurance policy supplemental to title XVIII (Medicare) of the Social Security Act or coverage from any third party payor, and whose income is under a specified level.  Allows an annual enrollment fee (of not over $15) and deductibles.  Mandates copayments not over $10 per prescription. 
Prohibits approval of an application under provisions of the Public Health Service Act relating to biological products or provisions of the Federal Food, Drug, and Cosmetic Act relating to new drugs if the drug manufacturer submits with the application the results of research carried out by the National Institutes of Health, or under an agreement under the Stevenson-Wydler Technology Innovation Act of 1980, until the manufacturer agrees to pay to the Secretary of Health and Human Services seven percent of the gross sales receipts.
Making Affordable Prescriptions Available for Seniors Act