I

106TH CONGRESS

2D SESSION H. R. 5142

To amend title XVIII of the Social Secuirty Act to provide under contract

with a Medicare carrier for an official website through which Medicare

beneficiaries and others can obtain Internet access to safe and competitively priced domestic and international prescription drugs, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 7, 2000

Mr. STARK introduced the following bill; which was referred to the Committee

on 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

under contract with a Medicare carrier for an official

website through which Medicare beneficiaries and others

can obtain Internet access to safe and competitively

priced domestic and international prescription drugs, and

for other purposes.

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

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

3 Drug Internet Access and Safe Importation Act of 2000’’.

4 SEC. 2. PROMOTING ACCESS OF MEDICARE BENEFICIARIES

5 TO SAFE AND COMPETITIVELY PRICED PRE6 SCRIPTION DRUGS THROUGH THE INTERNET.

7 Section 1842 of the Social Security Act (42 U.S.C.

8 1395u) is amended by adding at the end the following new

9 subsection:

10 ‘‘(u) CONTRACT TO PROVIDE OFFICIAL WEBSITE TO

11 PROVIDE ACCESS TO SAFE AND COMPETITIVELY PRICED

12 DOMESTIC AND INTERNATIONAL PRESCRIPTION DRUGS

13 TO MEDICARE BENEFICIARIES THROUGH THE INTER14 NET.—

15 ‘‘(1) CONTRACT.—

16 ‘‘(A) IN GENERAL.—The Secretary shall

17 enter into a contract arrangement with a quali18 fied carrier under which the carrier will provide

19 for the operation of an Internet site through

20 which medicare beneficiaries, physicians, and

21 pharmacies serving medicare beneficiaries can

22 identify one or more Internet pharmacies

23 (which are qualified under paragraph (2))

24 through which such individuals and pharmacies

25 may directly purchase safe and effective domes26 tic and international prescription drugs.
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1 ‘‘(B) QUALIFICATIONS FOR CARRIER OPER2 ATING OFFICIAL WEBSITE.—For purposes of

3 paragraph (1), a qualified carrier is a carrier

4 that demonstrates to the satisfaction of the Sec5 retary the ability to operate the Internet site

6 and to provide for appropriate screening and

7 oversight of the qualified Internet pharmacies

8 so as to ensure the delivery of safe products.

9 ‘‘(C) CONTRACT WITH ONLY 1 CARRIER.—

10 The Secretary shall enter into such a contract

11 with only 1 carrier.

12 ‘‘(D) SEEKING MOST COMPETITIVE

13 PRICE.—In entering into a contract with a car14 rier under this subsection, the Secretary shall

15 seek to obtain the greatest accessibility at the

16 most competitive price available for prescription

17 drugs for medicare beneficiaries, physicians,

18 and pharmacies serving medicare beneficiaries.

19 For this purpose, the carrier may limit the

20 number of Internet pharmacies which are linked

21 through the carrier’s website under this sub22 section.

23 ‘‘(E) POSTING OF PRICES FOR COVERED

24 DRUGS.—The contractor shall agree to post in

25 a clear and visible manner on the homepage for
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1 its Internet site, or on a page directly linked to

2 the homepage (by a clear and visible link on the

3 homepage), the five lowest prices for a par4 ticular prescription drug, including its thera5 peutic brand and generic equivalents, requested

6 by the medicare beneficiary.

7 ‘‘(F) RECOVERY OF ADMINISTRATIVE

8 COSTS.—The carrier shall seek to recover the

9 administrative costs of the contract under this

10 subsection by assessing a reasonable fee (which

11 may be based on such criteria as the contractor

12 determines most efficient) on Internet phar13 macies which use the carrier’s website to post

14 pharmaceutical products for sale of medicare

15 beneficiaries, physicians, and pharmacies serv16 ing medicare beneficiaries. Such fees shall be

17 adjusted from year to year as necessary to re18 cover administrative costs over a multi-year pe19 riod.

20 ‘‘(G) PRIVACY STANDARDS.—The carrier

21 shall not disclose any personal or medical infor22 mation regarding a medicare beneficiary if the

23 information is not utilized solely for the proc24 essing of claims, delivery of covered drugs, or is
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1 not vital to the immediate health or welfare of

2 the medicare beneficiary.

3 ‘‘(2) QUALIFICATIONS FOR INTERNET PHAR4 MACIES.—For purposes of this subsection, the Sec5 retary shall establish standards for qualification of

6 Internet pharmacies which may participate in the

7 carrier’s website. In establishing such standards, the

8 Secretary shall consider the recommendations of the

9 National Association of Boards of Pharmacy and

10 shall assure that each qualified Internet pharmacy—

11 ‘‘(A) is licensed in each State as a phar12 macy;

13 ‘‘(B) is in compliance with applicable re14 quirements of Federal and State law governing

15 the practice of pharmacy;

16 ‘‘(C) agrees not to dispense a drug except

17 upon a prescription of a practitioner licensed by

18 law to administer the drug;

19 ‘‘(D) agrees to post in a clear and visible

20 manner on the homepage for its Internet site,

21 or on a page directly linked to the homepage

22 (by a clear and visible link on the homepage),

23 such information regarding the identity of the

24 pharmacy and restrictions applicable to its dis-
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1 pensing of prescription drugs as the Secretary

2 shall specify; and

3 ‘‘(E) meets such other requirements as the

4 Secretary shall establish.’’.

5 SEC. 3. INTERNET PHARMACIES FOR MEDICARE BENE6 FICIARIES.

7 (a) IN GENERAL.—Chapter VIII of the Federal

8 Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.)

9 is amended—

10 (1) in section 801(d)(1), by striking ‘‘Except as

11 provide in paragraph (2),’’ and inserting ‘‘Except as

12 provided in paragraph (2) or section 801A,’’; and

13 (2) by inserting after section 801 the following

14 section:

15 ‘‘SEC. 801A. (a) PROMULGATION OF CRITERIA FOR

16 INTERNET PHARMACIES ELIGIBLE TO PARTICIPATE

17 WITH A MEDICARE CARRIER UNDER 1842(u) OF THE SO18 CIAL SECURITY ACT.—The Secretary shall by regulation

19 promulgate uniform criteria for the operation of Internet

20 pharmacies pursuant to subsection (d)(1), including re21 quirements regarding the manner in which such phar22 macies serve medicare beneficiaries and physicians or

23 pharmacies serving medicare beneficiaries. In establishing

24 such criteria, the Secretary shall with respect to Internet

25 pharmacies consider the recommendations of the National
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1 Association of Boards of Pharmacy. Such criteria shall

2 provide that a waiver under subsection (c) will be provided

3 to a medicare Internet pharmacy only if the following con4 ditions are met:

5 ‘‘(1) The Internet pharmacy is licensed under a

6 uniform name as a pharmacy among the States in

7 each State.

8 ‘‘(2) The Internet pharmacy is in compliance

9 with applicable requirements of Federal and State

10 law governing the practice of pharmacy.

11 ‘‘(3) The Internet pharmacy agrees that it will

12 dispense a drug as written for an individual only

13 upon a prescription of a practitioner licensed by law

14 to administer the drug.

15 ‘‘(4) The Internet site of the Internet pharmacy

16 posts in a clear and visible manner on the homepage

17 for the site, or on a page directly linked to the

18 homepage (by a clear and visible link on the home19 page), the following information:

20 ‘‘(A) A statement that the Internet phar21 macy will dispense prescription drugs only upon

22 a valid prescription by a licensed practitioner.

23 ‘‘(B) The street address for the principal

24 place of business for the Internet pharmacy.
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1 ‘‘(C) The name of the chief pharmacist for

2 the Internet pharmacy, the professional degree

3 held by such pharmacist, and an identification

4 of the pharmacy licenses held by the phar5 macist.

6 ‘‘(D) A telephone number at which phar7 macists of the Internet pharmacy may be

8 reached.

9 ‘‘(5) The Internet pharmacy contracts that it

10 will make available through the Internet site to phy11 sicians or pharmacies serving medicare beneficiaries

12 the same covered drugs as are available to medicare

13 beneficiaries through the site.

14 ‘‘(6) The Internet pharmacy shall not disclose

15 any personal or medical information regarding a

16 medicare beneficiary if the information is not uti17 lized solely for the processing of claims, delivery of

18 covered drugs, or is not vital to the immediate

19 health or welfare of the medicare beneficiary.

20 ‘‘(7) Such other conditions as the Secretary

21 may establish by regulation.

22 ‘‘(b) ENFORCEMENT.—

23 ‘‘(1) SUSPENSION OR REVOCATION OF WAIV24 ER.—After notice and opportunity for a hearing, the

25 Secretary may suspend or revoke the waiver of an
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1 Internet pharmacy under subsection (c) on any of

2 the following grounds:

3 ‘‘(A) The Internet pharmacy ceases to

4 comply with any condition described in sub5 section (a).

6 ‘‘(B) The Internet pharmacy has violated

7 any provision of section 301.

8 ‘‘(C) The Internet pharmacy has violated a

9 provision of the Controlled Substances Act, or

10 has violated any State law regarding controlled

11 substances.

12 ‘‘(D) The Internet pharmacy has violated a

13 State law regarding the unauthorized operation

14 of a pharmacy or the unauthorized practice of

15 medicine.

16 ‘‘(E) The Internet pharmacy has engaged

17 in such other conduct as, with respect to finan18 cial misconduct as well as the safety or effec19 tiveness of drugs, justifies the suspension or

20 revocation in the interest of protecting medicare

21 beneficiaries from the Internet pharmacy.

22 ‘‘(2) CRIMINAL PENALTY FOR SUBSEQUENT IM23 PORTATIONS.—If the waiver of an Internet phar24 macy under subsection (c) is suspended or revoked

25 by the Secretary under paragraph (1), any importa-
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1 tion by the Internet pharmacy of a covered drug into

2 the United States after the suspension or revocation

3 takes effect shall be considered to be a violation of

4 the provisions of section 301(t) that relate to section

5 801(d).

6 ‘‘(3) FEE TO FUND THE SECRETARY’S EN7 FORCEMENT OF THIS ACT.—The Secretary shall col8 lect a reasonable fee necessary to carry out the en9 forcement of this act.

10 ‘‘(c) WAIVER OF RESTRICTION ON REENTRY OF EX11 PORTED DRUGS.—

12 ‘‘(1) IN GENERAL.—If the Secretary determines

13 that an Internet pharmacy meets the requirements

14 described in paragraphs (1) and (2) of subsection

15 (d), the Secretary shall establish a waiver providing

16 that, notwithstanding section 801(b)(1), the Internet

17 pharmacy may import into the United States any

18 covered drug.

19 ‘‘(2) COVERED DRUGS.—For purposes of this

20 section, the term ‘covered drug’ means a drug

21 that—

22 ‘‘(A) is a drug for which an application has

23 been approved pursuant to section 505 or pur24 suant to section 351 of the Public Health Serv25 ice Act; and
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1 ‘‘(B)(i) is a prescription drug; or

2 ‘‘(ii) is a drug composed wholly or partly

3 of insulin.

4 ‘‘(3) RULE OF CONSTRUCTION REGARDING

5 SAFETY AND EFFECTIVENESS, ADULTERATION AND

6 MISBRANDING, AND OTHER REQUIREMENTS.—A

7 waiver of section 801(d)(1) under paragraph (1)

8 may not be construed as waiving any other provision

9 of Federal law regarding the drugs involved.

10 ‘‘(d) REQUIREMENTS FOR WAIVER.—

11 ‘‘(1) INTERNET PHARMACY QUALIFIED UNDER

12 1842(u) OF THE SOCIAL SECURITY ACT.—For pur13 poses of subsection (c)(1), the requirement described

14 in this paragraph is that the Internet pharmacy in15 volved operate, in accordance with criteria under

16 subsection (a), an Internet site through which medi17 care beneficiaries, physicians, and pharmacies serv18 ing medicare beneficiaries can purchase covered

19 drugs.

20 ‘‘(2) INFORMATION REGARDING IMPORTATION—

21 For purposes of subsection (c)(1), the requirement

22 described in this paragraph is that the Internet

23 pharmacy involved provide to the Secretary such in24 formation as the Secretary may require for purposes

25 of determining whether the requirements of this Act
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1 have been met with respect to the covered drug

2 being imported.

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

4 ‘‘(1) The term ‘covered drug’ has the meaning

5 given such term in subsection (c)(2).

6 ‘‘(2) The term ‘generic drug’ means a drug ap7 proved under section 505(j) of the Federal Food,

8 Drug, and Cosmetic Act.

9 ‘‘(3) The term ‘Internet’ means collectively the

10 myriad of computer and telecommunications facili11 ties, including equipment and operating software,

12 which comprise the interconnected world-wide net13 work of networks that employ the Transmission

14 Control Protocol/Internet Protocol, or any prede15 cessor or successor protocols to such protocol, to

16 communicate information of all kinds by wire or

17 radio.

18 ‘‘(4) The term ‘Internet pharmacy’ means an

19 Internet site through which a medicare beneficiary

20 or a physician or pharmacy serving medicare bene21 ficiaries can purchase a drug, whether the purchase

22 is a sale for resale or sale at retail.

23 ‘‘(5) The term ‘Internet site’ means a site on

24 the telecommunications medium known as the World

25 Wide Web of the Internet.
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1 ‘‘(6) The term ‘Medicare beneficiary’ means an

2 individual entitled to benefits under part A of title

3 XVIII of the Social Security Act, or enrolled under

4 part B of such title, or both.

5 ‘‘(7) The term ‘prescription drug’ means a drug

6 that is subject to section 503(b).’’.

7 (b) EFFECTIVE DATE.—This act shall take effect six

8 months after the date of enactment.

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