I 

108TH CONGRESS 

1ST SESSION H. R. 1694

To establish an America Rx program to establish fairer pricing for prescription drugs for individuals without access to prescription drugs at discounted prices. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 9, 2003

Mr. MICHAUD (for himself, Mr. ALLEN, Mr. ABERCROMBIE, Mr. ALEXANDER, 

Mr. BROWN of Ohio, Mr. BERRY, Mr. BELL, Mr. CASE, Mr. CROWLEY, 

Mr. STARK, Mr. CARDOZA, Ms. DELAURO, Mr. FROST, Mr. HINCHEY, 

Mr. HOLDEN, Ms. JACKSON-LEE of Texas, Mr. HINOJOSA, Mr. ISRAEL, 

Mr. LYNCH, Mr. REYES, Mr. ROSS, Mr. PALLONE, Mr. POMEROY, Ms. 

SCHAKOWSKY, Mr. MEEHAN, Mr. SANDLIN, Mr. SANDERS, Mr. STENHOLM, Mr. TURNER of Texas, Mr. WYNN, and Mr. STUPAK) introduced 

the following bill; which was referred to the Committee on Energy and 

Commerce 

A BILL

To establish an America Rx program to establish fairer pricing for prescription drugs for individuals without access 

to prescription drugs at discounted prices.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; FINDINGS; PURPOSE 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘America Rx Act of 2003’’. 

6 (b) FINDINGS.—Congress finds the following: 
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1 (1) Affordability is critical in providing access 

2 to prescription drugs for residents of the United 

3 States. 

4 (2) It is not the intention of the Congress to 

5 discourage employers and health insurers from pro6 viding coverage for prescription drugs, including dis7 counts for the purchase of those drugs. 

8 (c) PURPOSE.—The purpose of this Act is to establish 

9 an America Rx program that utilizes manufacturer re10 bates and pharmacy discounts to reduce prescription drug 

11 prices to those residents who are without access to dis12 counted prices for outpatient prescription drugs. 

13 SEC. 2. ESTABLISHMENT OF AMERICA RX PROGRAM. 

14 (a) ESTABLISHMENT.—

15 (1) IN GENERAL.—The Secretary of Health and 

16 Human Services shall establish a program (in this 

17 section referred to as the ‘‘America Rx program’’) 

18 consistent with the provisions of this section to pro19 vide qualified residents with access to discounted 

20 prices for outpatient prescription drugs. 

21 (2) PRINCIPLES.—The Secretary shall design 

22 and execute the America Rx program in a manner 

23 consistent with the following principles: 

24 (A) Medicaid beneficiaries and other low25 income individuals, as well as senior citizens 
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1 and the disabled, are not hurt or disadvantaged 

2 as a result of the program’s implementation. 

3 (B) Pharmacies participating are ensured 

4 reasonable and timely payment of discounts 

5 they provide to qualified residents under the 

6 program. 

7 (C) The Federal Government will fully re8 imburse States for reasonable costs they incur 

9 in carrying out the program. 

10 (D) Individuals who apply for benefits 

11 under the program are screened for eligibility 

12 under the medicaid program and other applica13 ble Governmental health care programs and, if 

14 found eligible, are enrolled in such program or 

15 programs. 

16 (E) The Secretary provides for—

17 (i) outreach efforts to build public 

18 awareness of the program and maximize 

19 enrollment of qualified residents; and 

20 (ii) simplified eligibility procedures 

21 and uniform eligibility standards for quali22 fied residents. 

23 (3) QUALIFIED RESIDENT DEFINED.—For pur24 poses of this section, the term ‘‘qualified resident’’ 

25 means an individual who—
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1 (A) a citizen or national of the United 

2 States (or an alien lawful residing permanently 

3 in the United States); and 

4 (B) as determined under regulations of the 

5 Secretary, is not covered under any public or 

6 private program that provides substantial bene7 fits (which may be discounted prices) towards 

8 the purchase of outpatient prescription drugs. 

9 (b) REBATE AGREEMENTS WITH MANUFACTUR10 ERS.—

11 (1) IN GENERAL.—Under the America Rx pro12 gram the Secretary shall negotiate with manufactur13 ers of outpatient prescription drugs rebate agree14 ments with respect to drugs offered under the pro15 gram to qualified residents. 

16 (2) MINIMUM AMOUNT OF REBATES.—In nego17 tiating the amount of such a rebate under paragraph 

18 (1), the Secretary shall take into consideration the 

19 amount of the rebate calculated under the medicaid 

20 program, the average manufacturer price of pre21 scription drugs, and other information on prescrip22 tion drug prices and price discounts. The Secretary 

23 shall negotiate the amount of such rebates in a man24 ner so that the rebates on average are comparable 

25 to the average percentage rebate obtained in out-
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1 patient prescription drugs provided under section 

2 1927(c) of the Social Security Act (42 U.S.C. 

3 1396r–8(c)). 

4 (3) PAYMENT.—Such rebates shall be payable 

5 to the Secretary according to a schedule (not less 

6 often than quarterly) negotiated with manufacturers 

7 and shall be paid, directly or through States, to par8 ticipating pharmacies that provide discounts to 

9 qualified residents. 

10 (4) INCENTIVE.—In order to induce manufac11 turers of outpatient prescription drugs to enter into 

12 such rebate agreements, the Secretary shall, in a 

13 manner consistent with the design principle specified 

14 in subsection (a)(2), provide, in the case of a manu15 facturer that has not entered into such an agree16 ment, for a denial of a deduction under chapter 1 

17 of the Internal Revenue Code of 1986 for the 

18 amount of expenses of the manufacturer for adver19 tising and marketing of drugs of the manufacturer, 

20 other than expenses for free samples of drugs sub21 ject to section 503(b)(1) of the Federal Food Drug, 

22 and Cosmetic Act intended to be distributed to pa23 tients. 

24 (5) APPLICATION OF REBATES.—Amounts re25 ceived by the Secretary as rebates under this sub-
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1 section shall be placed into an appropriate account 

2 in the Treasury and shall be available in advance of 

3 appropriations to the Secretary for the payment of 

4 discounts and other costs of participating phar5 macies in carrying out the America Rx program and 

6 for the payment of administrative costs in carrying 

7 out the program. 

8 (c) ARRANGEMENTS WITH PARTICIPATING PHAR9 MACIES.—

10 (1) IN GENERAL.—Under the America Rx pro11 gram arrangements are made with pharmacies for 

12 the provision of prescription drugs at discounted 

13 prices to qualified residents in a reasonably acces14 sible manner. Such arrangements shall provide 

15 that—

16 (A) each participating pharmacy shall—

17 (i) provide discounts on prices for out18 patient prescription drugs for qualified 

19 residents in return for prompt reimburse20 ment of the amount of such discounts and 

21 a reasonable dispensing fee; 

22 (ii) not charge qualified residents 

23 more (before such discounts) for outpatient 

24 prescription drugs than the amount that 
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1 individuals who are not qualified residents 

2 are charged for such drugs; and 

3 (iii) report to the Secretary (or the 

4 Secretary’s designee) information regard5 ing the discounts provided and fees in6 curred; and 

7 (B) the program shall—

8 (i) reimburse a participating retail 

9 pharmacy on a prompt basis (no less 

10 promptly than as provided under the medi11 care program) for discounted prices pro12 vided to qualified residents under the pro13 gram and for reasonable dispensing fees; 

14 and 

15 (ii) not impose any additional fees on 

16 such pharmacies in connection with partici17 pation in the program. 

18 (2) DISCOUNTED PRICES.—The amount of the 

19 discount provided to enrolled qualifying residents 

20 shall reflect the amount of rebates obtained, reduced 

21 by expenses relating to administrative costs of the 

22 Federal and State governments and of participating 

23 pharmacies. The Secretary shall specify the method 

24 for computing and applying discounts, including a 
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1 method for computing and applying discounts on a 

2 uniform, average percentage basis. 

3 (d) ADMINISTRATION.—

4 (1) IN GENERAL.—Under the America Rx pro5 gram the Secretary may enter into appropriate ar6 rangements with States under which States provide 

7 for the administration of the program in return for 

8 payment of the reasonable administrative expenses 

9 associated with such administration. 

10 (2) ADMINISTRATIVE FUNCTIONS.—Such ad11 ministration functions may include—

12 (A) determinations of eligibility of qualified 

13 residents; 

14 (B) arrangements with participating phar15 macies; and 

16 (C) such other functions as the Secretary 

17 determines appropriate. 

18 (3) CONTRACTUAL AUTHORITY.—In carrying 

19 out responsibilities under this section, the Secretary 

20 and States may enter into agreements with phar21 macy benefit managers and other third parties. 

22 (e) DEFINITIONS.—For purposes of this section: 

23 (1) The term ‘‘manufacturer’’ has the meaning 

24 given such term in section 1927(k)(5) of the Social 

25 Security Act (42 U.S.C. 1396r-8(k)(5)). 
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1 (2) The term ‘‘medicaid program’’ means a 

2 State program under title XIX of the Social Security 

3 Act, including such a program operating under a 

4 Statewide waiver under section 1115 of such Act. 

5 (3) The term ‘‘outpatient prescription drug’’ 

6 has the meaning given the term ‘‘covered outpatient 

7 drug’’ in section 1927(k)(2) of the Social Security 

8 Act (42 U.S.C. 1396r-8(k)(2)). 

9 (4) The term ‘‘Secretary’’ means the Secretary 

10 of Health and Human Services. 

11 (5) The term ‘‘State’’ has the meaning given 

12 such term for purposes of title XIX of the Social Se13 curity Act.

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