I 

110TH CONGRESS 

1ST SESSION H. R. 2065 

To amend title XVIII of the Social Security Act to provide for a Medicare 

operated prescription drug plan option to deliver a meaningful drug 

benefit and lower prescription drug prices under the Medicare Program. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 26, 2007 

Mr. MURPHY of Connecticut (for himself and Mr. COURTNEY) introduced the 

following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for a Medicare operated prescription drug plan option 

to deliver a meaningful drug 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 Drug Savings 

5 Through Choice Act of 2007’’. 


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1 SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRE2 SCRIPTION DRUG PLAN OPTION. 

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

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

5 11 (42 U.S.C. 1395w–111) the following new section: 

6 ‘‘MEDICARE OPERATED PRESCRIPTION DRUG PLAN

7 OPTION

8 ‘‘SEC. 1860D–11A. (a) IN GENERAL.—Notwith9 standing any other provision of this part, for each year 

10 (beginning with 2008), in addition to any plans offered 

11 under section 1860D–11, the Secretary shall offer a Medi12 care operated prescription drug plan (as defined in sub13 section (b)) with a service area that consists of the entire 

14 United States. 

15 ‘‘(b) MEDICARE OPERATED PRESCRIPTION DRUG

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

17 ‘Medicare operated prescription drug plan’ means a pre18 scription drug plan that offers qualified prescription drug 

19 coverage and access described in section 1860D–2(d) to 

20 the prices negotiated under subsection (c)(1). Such plan 

21 may offer supplemental prescription drug coverage in the 

22 same manner as other qualified prescription drug coverage 

23 offered by other prescription drug plans. 

24 ‘‘(c) ENHANCED AFFORDABILITY THROUGH NEGO25 TIATIONS.— 


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1 ‘‘(1) IN GENERAL.—Notwithstanding section 

2 1860D–11(i), for purposes of offering the Medicare 

3 operated prescription drug plan under this section, 

4 the Secretary shall negotiate with pharmaceutical 

5 manufacturers with respect to the purchase price of 

6 such covered part D drugs and shall encourage the 

7 use of more affordable therapeutic equivalents to the 

8 extent such practices do not override medical neces9 sity as determined by the prescribing physician. 

10 ‘‘(2) IMPLEMENTATION OF OTHER COST SAV11 INGS STRATEGIES.—To the extent practicable and 

12 consistent with paragraph (1), the Secretary shall 

13 implement strategies similar to those used by the 

14 Department of Veterans Affairs or other Federal 

15 purchasers of prescription drugs, and other strate16 gies, to reduce the purchase cost of covered part D 

17 drugs. 

18 ‘‘(3) CONDITIONING USE OF FORMULARIES.— 

19 Insofar as the Medicare operated prescription drug 

20 plan uses a formulary, such plan shall inform, con21 sistent with section 1860D–4(a)(3)(B), enrollees of 

22 changes in such formulary, including changes in cov23 ered drugs and the prices of such drugs. 

24 ‘‘(4) SAVINGS USED TO FILL GAPS IN PRE25 SCRIPTION DRUG COVERAGE.—Any savings to the 


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1 Medicare operated prescription drug plan resulting 

2 from actions take under this subsection shall be used 

3 by the plan to extend coverage under the plan to in4 dividuals who have reached the initial coverage limit 

5 applicable under the plan but who have not reached 

6 the annual out-of-pocket threshold specified in sec7 tion 1860D–2(b)(4)(B). 

8 ‘‘(d) MONTHLY PREMIUMS.— 

9 ‘‘(1) FOR QUALIFIED PRESCRIPTION DRUG COV10 ERAGE.— 

11 ‘‘(A) NATIONALLY UNIFORM MONTHLY

12 BENEFICIARY PREMIUM.—The monthly bene13 ficiary premium for qualified prescription drug 

14 coverage and access to negotiated prices de15 scribed in section 1860D–2(a)(1)(A) to be 

16 charged under the Medicare operated prescrip17 tion drug plan shall be uniform nationally. 

18 ‘‘(B) BID BASED ON COSTS.—The bid sub19 mitted under section 1860D–11(b)(2)(C) for 

20 the Medicare operated prescription drug plan 

21 shall be based on the average monthly per cap22 ita actuarial cost of offering such plan for the 

23 year involved, including administrative ex24 penses. 


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1 ‘‘(2) SUPPLEMENTAL PRESCRIPTION DRUG COV2 ERAGE.—Insofar as the Medicare operated prescrip3 tion drug plan offers supplemental prescription drug 

4 coverage, the Secretary shall adjust the amount of 

5 the bid submitted under section 1860D–11(b)(2)(C) 

6 (and the premium charged under paragraph (1)) to 

7 reflect the additional benefits offered under such 

8 coverage. 

9 ‘‘(e) OPEN ENROLLMENT.—A part D eligible indi10 vidual may enroll in the Medicare operated prescription 

11 drug plan at any time.’’. 

12 (b) NO LATE ENROLLMENT PENALTY FOR INDIVID13 UALS ENROLLED IN MEDICARE OPERATED PRESCRIP14 TION DRUG PLAN.—Section 1860D–13(b)(2) of such Act 

15 (42 U.S.C. 1395w–113(b)(2)) is amended by adding at 

16 the end the following new sentence: ‘‘A part D eligible in17 dividual described in this paragraph does not include an 

18 individual enrolled in the Medicare operated prescription 

19 drug plan during the period in which the individual is so 

20 enrolled.’’. 

21 (c) CONFORMING AMENDMENTS.— 

22 (1) Section 1860D–1(b)(1)(B)(iii) of the Social 

23 Security Act (42 U.S.C. 1395w–101(b)(1)(B)(iii)) is 

24 amended by inserting ‘‘and section 1860D–11A(e)’’ 

25 after ‘‘paragraphs (2) and (3) of this subsection’’. 


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1 (2) Section 1860D–2(b)(3)(A) of such Act (42 

2 U.S.C. 1395w–102(b)(3)(A)) is amended by insert3 ing ‘‘and section 1860D–11A(c)(4)’’ after ‘‘para4 graph (4)’’. 

5 (3) Section 1860D–3(a) of such Act (42 U.S.C. 

6 1395w–103(a)) is amended by adding at the end the 

7 following new paragraph: 

8 ‘‘(4) AVAILABILITY OF THE MEDICARE OPER9 ATED PRESCRIPTION DRUG PLAN.— 

10 ‘‘(A) IN GENERAL.—The Medicare oper11 ated prescription drug plan shall be offered na12 tionally in accordance with section 1860D–11A. 

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

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

15 (ii), the Medicare operated prescription 

16 drug plan shall be offered in addition to 

17 any qualifying plan or fallback prescription 

18 drug plan offered in a PDP region and 

19 shall not be considered to be such a plan 

20 for purposes of meeting the requirements 

21 of this subsection. 

22 ‘‘(ii) DESIGNATION AS A FALLBACK

23 PLAN.—Notwithstanding any other provi24 sion of this part, the Secretary may des25 ignate the Medicare operated prescription 


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1 drug plan as the fallback prescription drug 

2 plan for any fallback service area (as de3 fined in section 1860D–11(g)(3)) deter4 mined to be appropriate by the Sec5 retary.’’. 

6 (4) Section 1860D–13(c)(3) of such Act (42 

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

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

9 Medicare operated prescription drug plan’’ after 

10 ‘‘Fallback plans’’; and 

11 (B) by inserting ‘‘or the Medicare operated 

12 prescription drug plan’’ after ‘‘a fallback pre13 scription drug plan’’. 

14 (5) Section 1860D–16(b)(1) of such Act (42 

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

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

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

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

19 period at the end and inserting ‘‘; and’’; and 

20 ‘‘(E) payments for expenses incurred with 

21 respect to the operation of the Medicare oper22 ated prescription drug plan under section 

23 1860D–11A.’’. 


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1 (6) Section 1860D–41(a) of such Act (42 

2 U.S.C. 1395w–151(a)) is amended by adding at the 

3 end the following new paragraph: 

4 ‘‘(19) MEDICARE OPERATED PRESCRIPTION

5 DRUG PLAN.—The term ‘Medicare operated prescrip6 tion drug plan’ has the meaning given such term in 

7 section 1860D–11A(b).’’. 

Æ 


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