I 

108TH CONGRESS 

2D SESSION H. R. 3767

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 HOUSE OF REPRESENTATIVES 

FEBRUARY 4, 2004

Mr. BERRY (for himself, Ms. SCHAKOWSKY, Mr. ALLEN, Mr. PALLONE, Mr. 

HINCHEY, Mrs. MCCARTHY of New York, Ms. SOLIS, Mrs. 

CHRISTENSEN, Mr. GRIJALVA, Mr. BOUCHER, Mrs. TAUSCHER, Mr. 

ROSS, Mr. TAYLOR of Mississippi, Ms. ROYBAL-ALLARD, Ms. LEE, Mr. 

SERRANO, Mr. STARK, Mr. MEEHAN, Mr. CUMMINGS, Mr. WAXMAN, Mr. 

CONYERS, Mr. BISHOP of New York, and Ms. DELAURO) 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 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 2004’’. 
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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, as added by section 101 of the Medicare Pre5 scription Drug, Improvement, and Modernization Act of 

6 2003 (Public Law 108–173), is amended by inserting 

7 after section 1860D–11 the following new section: 

8 ‘‘MEDICARE OPERATED PRESCRIPTION DRUG PLAN

9 OPTION

10 ‘‘SEC. 1860D–11A. (a) IN GENERAL.—Notwith11 standing any other provision of this part, for each year 

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

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

14 more medicare operated prescription drug plans (as de15 fined in subsection (c)) with a service area that consists 

16 of the entire United States and shall enter into negotia17 tions with pharmaceutical manufacturers to reduce the 

18 purchase cost of covered part D drugs for eligible part 

19 D individuals in accordance with subsection (b). 

20 ‘‘(b) NEGOTIATIONS.—Notwithstanding section 

21 1860D–11(i), for purposes of offering a medicare operated 

22 prescription drug plan under this section, the Secretary 

23 shall negotiate with pharmaceutical manufacturers with 

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

25 shall encourage the use of more affordable therapeutic 

26 equivalents to the extent such practices do not override 
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1 medical necessity as determined by the prescribing physi2 cian. To the extent practicable and consistent with the 

3 previous sentence, the Secretary shall implement strate4 gies similar to those used by other Federal purchasers of 

5 prescription drugs, and other strategies, to reduce the pur6 chase cost of covered part D drugs. 

7 ‘‘(c) MEDICARE OPERATED PRESCRIPTION DRUG

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

9 ‘medicare operated prescription drug plan’ means a pre10 scription drug plan that offers qualified prescription drug 

11 coverage and access to negotiated prices described in sec12 tion 1860D–2(a)(1)(A). Such a plan may offer supple13 mental prescription drug coverage in the same manner as 

14 other qualified prescription drug coverage offered by other 

15 prescription drug plans. 

16 ‘‘(d) MONTHLY BENEFICIARY PREMIUM.—

17 ‘‘(1) QUALIFIED PRESCRIPTION DRUG COV18 ERAGE.—The monthly beneficiary premium for 

19 qualified prescription drug coverage and access to 

20 negotiated prices described in section 1860D–

21 2(a)(1)(A) to be charged under a medicare operated 

22 prescription drug plan shall be uniform nationally. 

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

24 for months in succeeding years shall be based on the 

25 average monthly per capita actuarial cost of offering 
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1 the medicare operated prescription drug plan for the 

2 year involved, including administrative expenses. 

3 ‘‘(2) SUPPLEMENTAL PRESCRIPTION DRUG COV4 ERAGE.—Insofar as a medicare operated prescrip5 tion drug plan offers supplemental prescription drug 

6 coverage, the Secretary may adjust the amount of 

7 the premium charged under paragraph (1). 

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

9 WITH A $35 PREMIUM IN 2006.—The Secretary 

10 shall ensure that at least one medicare operated pre11 scription drug plan offered in 2006 has a monthly 

12 premium of $35. ’’. 

13 (b) CONFORMING AMENDMENTS.—

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

15 Act, as added by section 101 of the Medicare Pre16 scription Drug, Improvement, and Modernization 

17 Act of 2003, is amended by adding at the end the 

18 following new paragraph: 

19 ‘‘(4) AVAILABILITY OF THE MEDICARE OPER20 ATED PRESCRIPTION DRUG PLAN.—

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

22 prescription drug plan (as defined in section 

23 1860D–11A(c)) shall be offered nationally in 

24 accordance with section 1860D–11A. 

25 ‘‘(B) RELATIONSHIP TO OTHER PLANS.—
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1 ‘‘(i) IN GENERAL.—Subject to clause 

2 (ii), a medicare operated prescription drug 

3 plan shall be offered in addition to any 

4 qualifying plan or fallback prescription 

5 drug plan offered in a PDP region and 

6 shall not be considered to be such a plan 

7 purposes of meeting the requirements of 

8 this subsection. 

9 ‘‘(ii) DESIGNATION AS A FALLBACK

10 PLAN.—Notwithstanding any other provi11 sion of this part, the Secretary may des12 ignate the medicare operated prescription 

13 drug plan as the fallback prescription drug 

14 plan for any fallback service area (as de15 fined in section 1860D–11(g)(3)) deter16 mined to be appropriate by the Sec17 retary.’’. 

18 (2) Section 1860D–13(c)(3) of such Act, as 

19 added by such section, is amended—

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

21 medicare operated prescription drug plans’’ 

22 after ‘‘Fallback plans’’; and 

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

24 prescription drug plan’’ after ‘‘a fallback pre25 scription drug plan’’. 
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1 (3) Section 1860D–16(b)(1) of such Act, as 

2 added by such section, is amended—

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

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

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

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

7 ‘‘(E) payments for expenses incurred with 

8 respect to the operation of medicare operated 

9 prescription drug plans under section 1860D–

10 11A.’’. 

11 (4) Section 1860D–41(a) of such Act, as added 

12 by such section, is amended by adding at the end 

13 the following new paragraph: 

14 ‘‘(19) MEDICARE OPERATED PRESCRIPTION

15 DRUG PLAN.—The term ‘medicare operated prescrip16 tion drug plan’ has the meaning given such term in 

17 section 1860D–11A(c).’’. 

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

19 this section shall take effect as if included in the enact20 ment of section 101 of the Medicare Prescription Drug, 

21 Improvement, and Modernization Act of 2003.

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