A bill to provide access and choice for use of generic drugs instead of nongeneric drugs under Federal health care programs, and for other purposes.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Generic 
Pharmaceutical Access and Choice for Consumers Act of 2001''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
              TITLE I--REQUIRING THE USE OF GENERIC DRUGS

Sec. 101. Requiring the use of generic drugs under the Public Health 
                            Service Act.
Sec. 102. Application to Federal employees health benefits program.
Sec. 103. Application to medicare program.
Sec. 104. Application to medicaid program.
Sec. 105. Application to Indian Health Service.
Sec. 106. Application to veterans programs.
Sec. 107. Application to recipients of uniformed services health care.
Sec. 108. Application to Federal prisoners.
    TITLE II--THERAPEUTIC EQUIVALENCE REQUIREMENTS FOR GENERIC DRUGS

Sec. 201. Therapeutic equivalence of generic drugs.
         TITLE III--GENERIC PHARMACEUTICALS AND MEDICARE REFORM

Sec. 301. Sense of the Senate on requiring the use of generic 
                            pharmaceuticals under the medicare program.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress makes the following findings:
            (1) Generic pharmaceuticals are approved by the Food and 
        Drug Administration on the basis of scientific testing and 
        other information establishing that such pharmaceuticals are 
        therapeutically equivalent to brand-name pharmaceuticals, 
        ensuring consumers a safe, efficacious, and cost-effective 
        alternative to brand-name innovator pharmaceuticals.
            (2) The pharmaceutical market has become increasingly 
        competitive during the last decade because of the increasing 
        availability and accessibility of generic pharmaceuticals.
            (3) The Congressional Budget Office estimates that--
                    (A) the substitution of generic pharmaceuticals for 
                brand-name pharmaceuticals will save purchasers of 
                pharmaceuticals between $8,000,000,000 and 
                $10,000,000,000 each year; and
                    (B) quality generic pharmaceuticals cost between 25 
                percent and 60 percent less than brand-name 
                pharmaceuticals, resulting in an estimated average 
                savings of $15 to $30 on each prescription filled.
            (4) Independent studies have estimated that generics 
        provide an average savings of $45.50 for each prescription drug 
        sold.
            (5) Generic pharmaceuticals are widely accepted by both 
        consumers and the medical profession, as the market share held 
        by generic pharmaceuticals compared to brand-name 
        pharmaceuticals has more than doubled during the last decade, 
        from approximately 19 percent to 43 percent, according to the 
        Congressional Budget Office.
            (6) Generic pharmaceuticals can save consumers an 
        additional $1,320,000,000 each year for each 1 percent increase 
        in the use of such pharmaceuticals.
            (7) Generic pharmaceutical use can help both consumers and 
        the Government reduce the cost of prescription drugs.
    (b) Purposes.--The purposes of this Act are--
            (1) to reduce the cost of prescription drugs to the United 
        States Government and to beneficiaries under Federal health 
        care programs while maintaining the quality of health care by 
        requiring the use of generic drugs rather than nongeneric 
        drugs, unless no therapeutically equivalent generic drug has 
        been approved under the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 301 et seq.) or the nongeneric drug is specifically--
                    (A) ordered by the prescribing provider; or
                    (B) requested by the individual for whom the drug 
                is prescribed; and
            (2) to increase the utilization of generic pharmaceuticals 
        by requiring the Food and Drug Administration, where 
        appropriate, to determine that a generic pharmaceutical is the 
        therapeutic equivalent of its brand-name counterpart, and by 
        affording national uniformity to that determination.

              TITLE I--REQUIRING THE USE OF GENERIC DRUGS

SEC. 101. REQUIRING THE USE OF GENERIC DRUGS UNDER THE PUBLIC HEALTH 
              SERVICE ACT.

    (a) In General.--Part B of title II of the Public Health Service 
Act (42 U.S.C. 238 et seq.) is amended by adding at the end the 
following new section:

``SEC. 247. USE OF GENERIC DRUGS REQUIRED.

    ``(a) Requirement.--Each grant or contract entered into under this 
Act that involves the provision of health care items or services to 
individuals shall include provisions to ensure that any prescription 
drug provided for under such grant or contract is filled by providing 
the generic form of the drug involved, unless no generic form of the 
drug has been approved under the Federal Food, Drug, and Cosmetic Act 
or the nongeneric form of the drug is specifically--
            ``(1) ordered by the prescribing provider; or
            ``(2) requested by the individual for whom the drug is 
        prescribed.
    ``(b) Definitions.--In this section:
            ``(1) Generic form of the drug.--The term `generic form of 
        the drug' means a drug that is the subject of an application 
        approved under subsection (b)(2) or (j) of section 505 of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355), for which 
        the Secretary has made a determination that the drug is the 
        therapeutic equivalent of a listed drug under section 505(o) of 
        that Act (21 U.S.C. 355(o)).
            ``(2) Nongeneric form of the drug.--The term `nongeneric 
        form of the drug' means a drug that is the subject of an 
        application approved under--
                    ``(A) section 505(b)(1) of the Federal Food, Drug, 
                and Cosmetic Act (21 U.S.C. 355(b)(1)); or
                    ``(B) section 505(b)(2) of such Act and that has 
                been determined to be not therapeutically equivalent to 
                any listed drug.
            ``(3) Prescription drug.--The term `prescription drug' 
        means a drug that is subject to the provisions of section 
        503(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        353(b)).''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to any drug furnished on or after the date of enactment of 
this Act.

SEC. 102. APPLICATION TO FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM.

    (a) In General.--Section 8902 of title 5, United States Code, is 
amended by adding at the end the following new subsection:
    ``(p) If a contract under this chapter provides for the provision 
of, the payment for, or the reimbursement of the cost of any 
prescription drug (as defined in paragraph (3) of section 247(b) of the 
Public Health Service Act), the carrier shall provide, pay, or 
reimburse the cost of the generic form of the drug (as defined in 
paragraph (1) of such section), except that this subsection shall not 
apply if the nongeneric form of the drug (as defined in paragraph (2) 
of such section) is specifically--
            ``(1) ordered by the prescribing provider; or
            ``(2) requested by the individual for whom the drug is 
        prescribed.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to any prescription drug furnished during contract years beginning on 
or after January 1, 2002.

SEC. 103. APPLICATION TO MEDICARE PROGRAM.

    (a) In General.--Section 1861(t) of the Social Security Act (42 
U.S.C. 1395x(t)) is amended by adding at the end the following new 
paragraph:
    ``(3) For purposes of paragraph (1), the term `drugs' means the 
generic form of the drug (as defined in section 247(b)(1) of the Public 
Health Service Act), unless no generic form of the drug has been 
approved under the Federal Food, Drug, and Cosmetic Act or the 
nongeneric form of such drug (as defined in section 247(b)(2) of such 
Act) is specifically--
            ``(A) ordered by the health care provider; or
            ``(B) requested by the individual to whom the drug is 
        provided.''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendment made by this section shall apply with respect to any 
        prescription drug furnished on or after the date of enactment 
        of this Act.
            (2) Medicare+choice plans.--In the case of a 
        Medicare+Choice plan offered by a Medicare+Choice organization 
        under part C of title XVIII of the Social Security Act (42 
        U.S.C. 1395w-21 et seq.), the amendment made by this section 
        shall apply to any prescription drug furnished during contract 
        years beginning on or after January 1, 2002.

SEC. 104. APPLICATION TO MEDICAID PROGRAM.

    (a) In General.--Section 1902(a) of the Social Security Act (42 
U.S.C. 1396a(a)) is amended--
            (1) in paragraph (64), by striking ``and'' at the end;
            (2) in paragraph (65), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding the following new paragraph:
            ``(66) provide that the State shall, in conjunction with 
        the program established under section 1927(g), provide for the 
        use of a generic form of a drug (as defined in paragraph (1) of 
        section 247(b) of the Public Health Service Act), unless no 
        generic form of the drug has been approved under the Federal 
        Food, Drug, and Cosmetic Act or the nongeneric form of the drug 
        (as defined in paragraph (2) of such section) is specifically--
                    ``(A) ordered by the provider; or
                    ``(B) requested by the individual to whom the drug 
                is provided.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to any prescription drug furnished under State plans that 
are approved or renewed on or after the date of enactment of this Act.

SEC. 105. APPLICATION TO INDIAN HEALTH SERVICE.

    (a) In General.--Title II of the Indian Health Care Improvement Act 
(25 U.S.C. 1621 et seq.) is amended by adding at the end the following 
new section:

``SEC. 225. USE OF GENERIC DRUGS REQUIRED.

    ``In providing health care items or services under this Act, the 
Indian Health Service shall ensure that any prescription drug (as 
defined in paragraph (3) of section 247(b) of the Public Health Service 
Act) that is provided under this Act is the generic form of the drug 
(as defined in paragraph (1) of such section) involved, unless no 
generic form of the drug has been approved under the Federal Food, 
Drug, and Cosmetic Act or the nongeneric form of the drug (as defined 
in paragraph (2) of such section) is specifically--
            ``(1) ordered by the prescribing provider; or
            ``(2) requested by the individual for whom the drug is 
        prescribed.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to any prescription drug furnished on or after the date of 
enactment of this Act.

SEC. 106. APPLICATION TO VETERANS PROGRAMS.

    (a) Use of Generic Drugs Required.--Subchapter III of chapter 17 of 
title 38, United States Code, is amended by inserting after section 
1722A the following new section:
``Sec. 1722B. Use of generic drugs required
    ``When furnishing a prescription drug (as defined in paragraph (3) 
of section 247(b) of the Public Health Service Act) under this chapter, 
the Secretary shall furnish a generic form of the drug (as defined in 
paragraph (1) of such section), unless no generic form of the drug has 
been approved under the Federal Food, Drug, and Cosmetic Act or the 
nongeneric form of the drug (as defined in paragraph (2) of such 
section) is specifically--
            ``(1) ordered by the prescribing provider; or
            ``(2) requested by the individual for whom the drug is 
        prescribed.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 17 of such title is amended by inserting after the item 
relating to section 1722A the following new item:

``1722B. Use of generic drugs required.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to any prescription drug furnished on or after the 
date of enactment of this Act.

SEC. 107. APPLICATION TO RECIPIENTS OF UNIFORMED SERVICES HEALTH CARE.

    (a) Use of Generic Drugs Required.--Chapter 55 of title 10, United 
States Code, as amended by section 751(b) of the Floyd D. Spence 
National Defense Authorization Act for Fiscal Year 2001 (as enacted 
into law by Public Law 106-398), is amended by adding at the end the 
following new section:
``Sec. 1111. Use of generic drugs required
    ``The Secretary of Defense shall ensure that each health care 
provider who furnishes a prescription drug (as defined in paragraph (3) 
of section 247(b) of the Public Health Service Act) furnishes the 
generic form of the drug (as defined in paragraph (1) of such section), 
unless no generic form of the drug has been approved under the Federal 
Food, Drug, and Cosmetic Act or the nongeneric form of the drug (as 
defined in paragraph (2) of such section) is specifically--
            ``(1) ordered by the prescribing provider; or
            ``(2) requested by the individual for whom the drug is 
        prescribed.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
1109 the following new item:

``1111. Use of generic drugs required.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to any drug furnished on or after the date of 
enactment of this Act.

SEC. 108. APPLICATION TO FEDERAL PRISONERS.

    (a) In General.--Section 4006(b) of title 18, United States Code, 
is amended by adding at the end the following new paragraph:
            ``(3) Use of generic drugs required.--The Attorney General 
        shall ensure that each health care provider who furnishes a 
        prescription drug (as defined in paragraph (3) of section 
        247(b) of the Public Health Service Act) to a prisoner charged 
        with or convicted of an offense against the United States 
        furnishes the generic form of the drug (as defined in paragraph 
        (1) of such section), unless no generic form of the drug has 
        been approved under the Federal Food, Drug, and Cosmetic Act or 
        the nongeneric form of the drug (as defined in paragraph (2) of 
        such section) is specifically--
                    ``(A) ordered by the prescribing provider; or
                    ``(B) requested by the prisoner for whom the drug 
                is prescribed.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to any prescription drug furnished on or after the date of 
enactment of this Act.

    TITLE II--THERAPEUTIC EQUIVALENCE REQUIREMENTS FOR GENERIC DRUGS

SEC. 201. THERAPEUTIC EQUIVALENCE OF GENERIC DRUGS.

    (a) In General.--Section 505 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355) is amended--
            (1) by adding at the end the following new subsection:
    ``(o)(1) For each application filed under subsection (b)(2) or 
subsection (j), the Secretary shall determine whether the drug for 
which the application is filed is the therapeutic equivalent of the 
drug for which the investigations have been made under subsection 
(b)(1)(A) (in this subsection referred to as the `reference drug') or 
the listed drug referred to in subsection (j)(2)(A)(i). For 
applications approved after the date of enactment of this subsection, 
the Secretary's determination shall be made before the approval of the 
application. For such applications approved before such date, the most 
recent determination made by the Secretary shall be confirmed.
    ``(2) For purposes of paragraph (1), a drug is the therapeutic 
equivalent of a reference drug or a listed drug if--
            ``(A) each active ingredient of the drug and either the 
        reference drug or the listed drug is the same;
            ``(B) the drug and either the reference drug or the listed 
        drug--
                    ``(i) are of the same dosage form;
                    ``(ii) have the same route of administration;
                    ``(iii) are identical in strength or concentration; 
                and
                    ``(iv) are expected to have the same clinical 
                effect and safety profile when administered to patients 
                under conditions specified in the labeling; and
            ``(C) the drug does not present a known bioequivalence 
        problem, or if the drug presents such a problem, the drug is 
        shown to meet an appropriate bioequivalence standard.
    ``(3) With respect to a drug for which a therapeutic equivalence 
determination has been made or confirmed under this subsection, no 
State or political subdivision of a State may establish or continue in 
effect with respect to therapeutic equivalence of the drug to either a 
reference drug or a listed drug, any requirement which is different 
from, or in addition to, or is otherwise not identical with, the 
Secretary's determination or confirmation under this subsection.''; and
            (2) in subsection (j)(7)(A), by adding at the end the 
        following:
            ``(iv) The Secretary shall include in each revision of the 
        list under clause (ii) on or after the date of enactment of 
        this clause the official and proprietary name of each reference 
        drug or listed drug that is therapeutically equivalent to a 
        drug approved under subsection (b)(2) or under this subsection 
        during the preceding 30-day period, as determined under 
        subsection (o).''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

         TITLE III--GENERIC PHARMACEUTICALS AND MEDICARE REFORM

SEC. 301. SENSE OF THE SENATE ON REQUIRING THE USE OF GENERIC 
              PHARMACEUTICALS UNDER THE MEDICARE PROGRAM.

    It is the sense of the Senate that legislative language requiring 
the safe and cost-effective use of generic pharmaceuticals should be 
considered in conjunction with any legislation that adds a 
comprehensive prescription drug benefit to the medicare program under 
title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).

Summary: Generic Pharmaceutical Access and Choice for Consumers Act of 2001 -Amends the Public Health Service Act to require each grant or contract entered into under the Act that involves the provision of health care items or services to individuals to include provisions to ensure that any prescriptions provided for under such grant or contract are filled by providing the generic form of the drug involved, unless there is no approved generic form of the drug, or the nongeneric form of the drug is either specifically ordered by the prescribing provider or requested by the individual for whom the drug is prescribed. Makes similar changes under the Federal Employee Health Benefits program, Medicare program, Medicaid program, and programs affecting Indians, veterans, the uniformed services, and prisoners. Amends the Federal Food, Drug, and Cosmetic Act to require that for each drug application filed there shall be a determination as to whether there is a therapeutic equivalent for such drug.