II 

109TH CONGRESS 

1ST SESSION S. 345 

To amend title XVIII of the Social Security Act to deliver a meaningful 

benefit and lower prescription drug prices under the medicare program. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 10, 2005 

Mr. DURBIN introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL

To amend title XVIII of the Social Security Act to deliver 

a meaningful benefit and lower prescription drug prices 

under the medicare program.

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. 

4 This Act may be cited as the ‘‘Medicare Prescription 

5 Drug Savings and Choice Act of 2005’’. 

6 SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRE7 SCRIPTION DRUG PLAN OPTION. 

8 (a) IN GENERAL.—Subpart 2 of part D of the Social 

9 Security Act is amended by inserting after section 1860D–

10 11 the following new section: 
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1 ‘‘MEDICARE OPERATED PRESCRIPTION DRUG PLAN

2 OPTION

3 ‘‘SEC. 1860D–11A. (a) IN GENERAL.—Notwith4 standing any other provision of this part, for each year 

5 (beginning with 2006), in addition to any plans offered 

6 under section 1860D–11, the Secretary shall offer one or 

7 more medicare operated prescription drug plans (as de8 fined in subsection (c)) with a service area that consists 

9 of the entire United States and shall enter into negotia10 tions with pharmaceutical manufacturers to reduce the 

11 purchase cost of covered part D drugs for eligible part 

12 D individuals in accordance with subsection (b). 

13 ‘‘(b) NEGOTIATIONS.—Notwithstanding section 

14 1860D–11(i), for purposes of offering a medicare operated 

15 prescription drug plan under this section, the Secretary 

16 shall negotiate with pharmaceutical manufacturers with 

17 respect to the purchase price of covered part D drugs and 

18 shall encourage the use of more affordable therapeutic 

19 equivalents to the extent such practices do not override 

20 medical necessity as determined by the prescribing physi21 cian. To the extent practicable and consistent with the 

22 previous sentence, the Secretary shall implement strate23 gies similar to those used by other Federal purchasers of 

24 prescription drugs, and other strategies, to reduce the pur25 chase cost of covered part D drugs. 
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1 ‘‘(c) MEDICARE OPERATED PRESCRIPTION DRUG

2 PLAN DEFINED.—For purposes of this part, the term 

3 ‘medicare operated prescription drug plan’ means a pre4 scription drug plan that offers qualified prescription drug 

5 coverage and access to negotiated prices described in sec6 tion 1860D–2(a)(1)(A). Such a plan may offer supple7 mental prescription drug coverage in the same manner as 

8 other qualified prescription drug coverage offered by other 

9 prescription drug plans. 

10 ‘‘(d) MONTHLY BENEFICIARY PREMIUM.— 

11 ‘‘(1) QUALIFIED PRESCRIPTION DRUG COV12 ERAGE.—The monthly beneficiary premium for 

13 qualified prescription drug coverage and access to 

14 negotiated prices described in section 1860D–

15 2(a)(1)(A) to be charged under a medicare operated 

16 prescription drug plan shall be uniform nationally. 

17 Such premium for months in 2006 shall be $35 and 

18 for months in succeeding years shall be based on the 

19 average monthly per capita actuarial cost of offering 

20 the medicare operated prescription drug plan for the 

21 year involved, including administrative expenses. 

22 ‘‘(2) SUPPLEMENTAL PRESCRIPTION DRUG COV23 ERAGE.—Insofar as a medicare operated prescrip24 tion drug plan offers supplemental prescription drug 
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1 coverage, the Secretary may adjust the amount of 

2 the premium charged under paragraph (1). 

3 ‘‘(3) REQUIREMENT FOR AT LEAST ONE PLAN

4 WITH A $35 PREMIUM IN 2006.—The Secretary shall 

5 ensure that at least one medicare operated prescrip6 tion drug plan offered in 2006 has a monthly pre7 mium of $35.’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Section 1860D–3(a) of the Social Security 

10 Act (42 U.S.C. 1395w–103(a)) is amended by add11 ing at the end the following new paragraph: 

12 ‘‘(4) AVAILABILITY OF THE MEDICARE OPER13 ATED PRESCRIPTION DRUG PLAN.— 

14 ‘‘(A) IN GENERAL.—A medicare operated 

15 prescription drug plan (as defined in section 

16 1860D–11A(c)) shall be offered nationally in 

17 accordance with section 1860D–11A. 

18 ‘‘(B) RELATIONSHIP TO OTHER PLANS.— 

19 ‘‘(i) IN GENERAL.—Subject to clause 

20 (ii), a medicare operated prescription drug 

21 plan shall be offered in addition to any 

22 qualifying plan or fallback prescription 

23 drug plan offered in a PDP region and 

24 shall not be considered to be such a plan 
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1 for purposes of meeting the requirements 

2 of this subsection. 

3 ‘‘(ii) DESIGNATION AS A FALLBACK

4 PLAN.—Notwithstanding any other provi5 sion of this part, the Secretary may des6 ignate the medicare operated prescription 

7 drug plan as the fallback prescription drug 

8 plan for any fallback service area (as de9 fined in section 1860D–11(g)(3)) deter10 mined to be appropriate by the Sec11 retary.’’. 

12 (2) Section 1860D–13(c)(3) of such Act (42 

13 U.S.C. 1395w–113(c)(3)) is amended— 

14 (A) in the heading, by inserting ‘‘and 

15 medicare operated prescription drug plans’’ 

16 after ‘‘Fallback plans’’; and 

17 (B) by inserting ‘‘or a medicare operated 

18 prescription drug plan’’ after ‘‘a fallback pre19 scription drug plan’’. 

20 (3) Section 1860D–16(b)(1) of such Act (42 

21 U.S.C. 1395w–116(b)(1)) is amended— 

22 (A) in subparagraph (C), by striking 

23 ‘‘and’’ after the semicolon at the end; 

24 (B) in subparagraph (D), by striking the 

25 period at the end and inserting ‘‘; and’’; and 
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1 (C) by adding at the end the following new 

2 subparagraph: 

3 ‘‘(E) payments for expenses incurred with 

4 respect to the operation of medicare operated 

5 prescription drug plans under section 1860D–

6 11A.’’. 

7 (4) Section 1860D–41(a) of such Act (42 

8 U.S.C. 141(a)) is amended by adding at the end the 

9 following new paragraph: 

10 ‘‘(19) MEDICARE OPERATED PRESCRIPTION

11 DRUG PLAN.—The term ‘medicare operated prescrip12 tion drug plan’ has the meaning given such term in 

13 section 1860D–11A(c).’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall take effect as if included in the enact16 ment of section 101 of the Medicare Prescription Drug, 

17 Improvement, and Modernization Act of 2003 (Public Law 

18 108–173; 117 Stat. 2071).

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