I

106TH CONGRESS

1ST SESSION H. R. 723

To establish a program of pharmacy assistance fee for elderly persons who

have no health insurance coverage.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 11, 1999

Mr. KENNEDY of Rhode Island (for himself, Mr. CAMPBELL, Mr. ALLEN, and

Mr. SANDERS) introduced the following bill; which was referred to the

Committee on Commerce

A BILL

To establish a program of pharmacy assistance fee for elderly

persons who have no health insurance coverage.

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 ‘‘Making Affordable

5 Prescriptions Available for Seniors Act’’.

6 SEC. 2. FINDINGS.

7 The Congress makes the following findings:

8 (1) although prescription drugs represent one of

9 the most frequently used medical care interventions

10 in treating common acute and chronic diseases,
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1 many Americans, especially the elderly and other

2 vulnerable populations, are unable to afford their

3 medication because of excessive and persistent drug

4 price inflation;

5 (2) between 1985 and 1991, the prices of the

6 20 top selling prescription drugs, which account for

7 almost a third of prescription sales, rose 79 per8 cent—nearly 4 times the general rate of inflation;

9 (3) prescription drug manufacturers continue to

10 make enormous profits on the backs of the elderly,

11 poor, and other vulnerable populations that are un12 able to afford their medications;

13 (4) because of the limited availability of private

14 or public prescription drug coverage for the elderly,

15 prescription drugs represent the highest out-of-pock16 et medical care cost for 3 of 4 elderly patients, sur17 passed only by the cost of long-term care services;

18 (5) individuals over the age of 65 fill an aver19 age of 15 prescriptions a year to treat chronic health

20 conditions compared to an annual average of 5 pre21 scriptions for those under the age of 65;

22 (6) 90 percent of Americans who are 60 years

23 of age or older take one or more medications daily;

24 (7) The United States spends several billion

25 dollars on biomedical and related health research
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1 and in 1994 the United States spent $33 billion on

2 such research and the pharmaceutical industry only

3 spent $14 billion on such research in such year; and

4 (8) The pharmaceutical industry makes large

5 profits off of the sale of drugs produced from the

6 benefit of research paid for by the United States

7 and, aside from royalties, none of such profits are

8 reimbursed back to the United States taxpayers.

9 SEC. 3. PRESCRIPTION DRUG ASSISTANCE PROGRAM.

10 The Public Health Service Act is amended by adding

11 at the end the following:

12 ‘‘TITLE XXVIII—PRESCRIPTION

13 DRUG ASSISTANCE PROGRAM

14 ‘‘SEC. 2801. ESTABLISHMENT.

15 ‘‘(a) IN GENERAL.—The Secretary shall establish a

16 program of pharmacy assistance (referred to in this title

17 as the ‘program’) for eligible persons.

18 ‘‘(b) ADMINISTRATION.—Pharmacy assistance shall

19 be provided under the program to eligible persons in the

20 manner that the Secretary determines to be the most cost21 effective, including indemnification, vouchers, coupons, or

22 direct provider reimbursement through the claims pay23 ment system under title XIX of the Social Security Act,

24 except that no system of administration shall make direct

25 cash payments to an eligible person before the presen-
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1 tation of a receipt or other invoice for the purchase of any

2 covered benefit. The Secretary may implement utilization

3 review, clinical management, and other administrative

4 techniques used in the management of the pharmacy bene5 fits program under title XIX of the Social Security Act

6 in order to identify and reduce drug interactions, overutili7 zations, therapeutic duplications, or early refills.

8 ‘‘(c) INCOME LEVELS.—The Secretary may authorize

9 local councils on aging, community action agencies, and

10 home care corporations to assist the Secretary in deter11 mining if persons meet the income eligibility requirements

12 of the program.

13 ‘‘(d) FEE.—The Secretary may require an annual en14 rollment fee in an amount not to exceed $15 to be paid

15 to defray the administrative expenses of the program.

16 ‘‘(e) OTHER PROGRAM ITEMS.—The Secretary shall

17 develop copayment requirements and may establish

18 deductibles to control program expenses. Copayment

19 amounts may vary to promote the purchase of generic

20 drugs and may be based on a sliding income scale, except

21 that copayment shall not be more than $10 per prescrip22 tion.

23 ‘‘SEC. 2802. PROFITS FROM RESEARCH.

24 ‘‘(a) IN GENERAL.—Except as provided in paragraph

25 (2), any manufacturer of a drug which submits, in connec-
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1 tion with an application for such drug under section 351

2 of this Act or section 505 of the Federal Food, Drug, and

3 Cosmetic Act, the results of research—

4 ‘‘(1) carried out by an entity of the National

5 Institutes of Health, or

6 ‘‘(2) under an agreement under section 12 of

7 the Stevenson-Wydler Technology Innovation Act of

8 1980,

9 shall not receive approval of such application until the

10 manufacturer enters into an agreement with the Secretary

11 under which the manufacturer will pay to the Secretary

12 7 percent of the gross amount received by the manufac13 turer from sales of such drug. Such agreement shall speci14 fy the manner in which such gross amount shall be deter15 mined.

16 ‘‘(b) EXCEPTION.—The Secretary may waive the ap17 plication of a subsection (a) to a manufacturer of a drug

18 when the Secretary determines that it would be in the pub19 lic interest to exempt such manufacturer.

20 ‘‘SEC. 2803. DEFINITIONS.

21 ‘‘For purposes of section 2801:

22 ‘‘(1) COVERED BENEFITS.—The term ‘covered

23 benefits’ means prescription drugs, including insulin

24 syringes and insulin needles, and insulin, eligible for

25 reimbursement under the program as defined by the
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1 Secretary, except that within each class of mainte2 nance drugs eligible for reimbursement all such pre3 scription drugs that have been approved safe and ef4 fective by the Federal Food and Drug Administra5 tion or are otherwise legally marketed in the United

6 States shall be covered under the program. The term

7 does not include experimental drugs or over-the8 counter pharmaceutical products except insulin. The

9 Secretary may restrict covered benefits to prescrip10 tion drugs manufactured by pharmaceutical compa11 nies who agree to provide manufacturer rebates.

12 ‘‘(2) ELIGIBLE PERSON.—The term ‘eligible

13 person’ means an individual who is 65 years or older

14 with no existing pharmacy benefits or coverage from

15 an insurance policy supplemental to benefits under

16 title XVIII of the Social Security Act or pharmacy

17 benefits or coverage from any other third party

18 payor and one whose annual income does not exceed

19 175 percent of the Federal poverty guidelines.

20 ‘‘(3) PHARMACY ASSISTANCE.—The term ‘phar21 macy assistance’ means an amount not exceeding

22 $500 in any year for each eligible person to assist

23 in the purchase of covered benefits.’’.

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