I

106TH CONGRESS

1ST SESSION H. R. 664

To provide for substantial reductions in the price of prescription drugs for

Medicare beneficiaries.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 10, 1999

Mr. ALLEN (for himself, Mr. TURNER, Mr. WAXMAN, Mr. BERRY, Mr. STARK,

Mr. SANDERS, Mrs. CAPPS, Mr. TIERNEY, Mr. LAMPSON, Ms.

STABENOW, Mr. DAVIS of Illinois, Mr. KENNEDY of Rhode Island, Ms.

DELAURO, Mr. WEXLER, Mr. FROST, Mr. MCGOVERN, Mr. CUMMINGS,

Mr. THOMPSON of Mississippi, Mr. SANDLIN, Mr. FORD, Mr. BROWN of

Ohio, Mr. WEYGAND, Ms. KILPATRICK, Mr. POMEROY, Mr. BORSKI, Mr.

OLVER, Mrs. THURMAN, Mr. BLUMENAUER, Mr. SERRANO, Mr.

BALDACCI, Mr. MATSUI, Mr. DELAHUNT, Ms. SLAUGHTER, Ms. HOOLEY

of Oregon, Mrs. MCCARTHY of New York, Mr. CRAMER, Mr. HINCHEY,

Mr. FRANK of Massachusetts, Mr. ANDREWS, Mr. MEEHAN, Mr. FILNER,

Mr. KLECZKA, Mr. BARRETT of Wisconsin, Mr. STUPAK, Mr. ABERCROMBIE, Mr. ACKERMAN, Mr. LUTHER, Mr. PALLONE, Mr. MEEKS of

New York, Ms. JACKSON-LEE of Texas, Mr. OBEY, Mr. MALONEY of

Connecticut, Mr. KUCINICH, Mr. EVANS, Ms. MCKINNEY, Ms. SANCHEZ,

Mr. BENTSEN, Ms. MILLENDER-MCDONALD, Mr. BISHOP, Mr. SHOWS,

and Mr. BOSWELL) 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 provide for substantial reductions in the price of

prescription drugs for Medicare beneficiaries.
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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 ‘‘Prescription Drug

5 Fairness for Seniors Act of 1999’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—The Congress finds the following:

8 (1) Manufacturers of prescription drugs engage

9 in price discrimination practices that compel many

10 older Americans to pay substantially more for pre11 scription drugs than the drug manufacturers’ most

12 favored customers, such as health insurers, health

13 maintenance organizations, and the Federal Govern14 ment.

15 (2) On average, older Americans who buy their

16 own prescription drugs pay twice as much for pre17 scription drugs as the drug manufacturers’ most fa18 vored customers. In some cases, older Americans pay

19 over 15 times more for prescription drugs than the

20 most favored customers.

21 (3) The discriminatory pricing by major drug

22 manufacturers sustains their annual profits of

23 $20,000,000,000, but causes financial hardship and

24 impairs the health and well-being of millions of older

25 Americans. More than one in eight older Americans
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1 are forced to choose between buying their food and

2 buying their medicines.

3 (4) Most federally funded health care programs,

4 including Medicaid, the Veterans Health Administra5 tion, the Public Health Service, and the Indian

6 Health Service, obtain prescription drugs for their

7 beneficiaries at low prices. Medicare beneficiaries are

8 denied this benefit and cannot obtain their prescrip9 tion drugs at the favorable prices available to other

10 federally funded health care programs.

11 (5) Implementation of the policy set forth in

12 this Act is estimated to reduce prescription drug

13 prices for Medicare beneficiaries by more than 40

14 percent.

15 (6) In addition to substantially lowering the

16 costs of prescription drugs for older Americans, im17 plementation of the policy set forth in this Act will

18 significantly improve the health and well-being of

19 older Americans and lower the costs to the Federal

20 taxpayer of the Medicare program.

21 (7) Older Americans who are terminally ill and

22 receiving hospice care services represent some of the

23 most vulnerable individuals in our nation. Making

24 prescription drugs available to Medicare beneficiaries

25 under the care of Medicare-certified hospices will as-
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1 sist in extending the benefits of lower prescription

2 drug prices to those most vulnerable and in need.

3 (b) PURPOSE.—The purpose of this Act is to protect

4 Medicare beneficiaries from discriminatory pricing by drug

5 manufacturers and to make prescription drugs available

6 to Medicare beneficiaries at substantially reduced prices.

7 SEC. 3. PARTICIPATING MANUFACTURERS.

8 (a) IN GENERAL.—Each participating manufacturer

9 of a covered outpatient drug shall make available for pur10 chase by each pharmacy such covered outpatient drug in

11 the amount described in subsection (b) at the price de12 scribed in subsection (c).

13 (b) DESCRIPTION OF AMOUNT OF DRUGS.—The

14 amount of a covered outpatient drug that a participating

15 manufacturer shall make available for purchase by a phar16 macy is an amount equal to the aggregate amount of the

17 covered outpatient drug sold or distributed by the phar18 macy to Medicare beneficiaries.

19 (c) DESCRIPTION OF PRICE.—The price at which a

20 participating manufacturer shall make a covered out21 patient drug available for purchase by a pharmacy is the

22 price equal to the lower of the following:

23 (1) The lowest price paid for the covered out24 patient drug by any agency or department of the

25 United States.
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1 (2) The manufacturer’s best price for the cov2 ered outpatient drug, as defined in section

3 1927(c)(1)(C) of the Social Security Act (42 U.S.C.

4 1396r–8(c)(1)(C)).

5 SEC. 4. SPECIAL PROVISION WITH RESPECT TO HOSPICE

6 PROGRAMS.

7 For purposes of determining the amount of a covered

8 outpatient drug that a participating manufacturer shall

9 make available for purchase by a pharmacy under section

10 3, there shall be included in the calculation of such

11 amount the amount of the covered outpatient drug sold

12 or distributed by a pharmacy to a hospice program. In

13 calculating such amount, only amounts of the covered out14 patient drug furnished to a Medicare beneficiary enrolled

15 in the hospice program shall be included.

16 SEC. 5. ADMINISTRATION.

17 The Secretary shall issue such regulations as may be

18 necessary to implement this Act.

19 SEC. 6. REPORTS TO CONGRESS REGARDING EFFECTIVE20 NESS OF ACT.

21 (a) IN GENERAL.—Not later than 2 years after the

22 date of the enactment of this Act, and annually thereafter,

23 the Secretary shall report to the Congress regarding the

24 effectiveness of this Act in—
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1 (1) protecting Medicare beneficiaries from dis2 criminatory pricing by drug manufacturers, and

3 (2) making prescription drugs available to

4 Medicare beneficiaries at substantially reduced

5 prices.

6 (b) CONSULTATION.—In preparing such reports, the

7 Secretary shall consult with public health experts, affected

8 industries, organizations representing consumers and

9 older Americans, and other interested persons.

10 (c) RECOMMENDATIONS.—The Secretary shall in11 clude in such reports any recommendations they consider

12 appropriate for changes in this Act to further reduce the

13 cost of covered outpatient drugs to Medicare beneficiaries.

14 SEC. 7. DEFINITIONS.

15 In this Act:

16 (1) PARTICIPATING MANUFACTURER.—The

17 term ‘‘participating manufacturer’’ means any man18 ufacturer of drugs or biologicals that, on or after the

19 date of the enactment of this Act, enters into a con20 tract or agreement with the United States for the

21 sale or distribution of covered outpatient drugs to

22 the United States.

23 (2) COVERED OUTPATIENT DRUG.—The term

24 ‘‘covered outpatient drug’’ has the meaning given
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1 that term in section 1927(k)(2) of the Social Secu2 rity Act (42 U.S.C. 1396r–8(k)(2)).

3 (3) MEDICARE BENEFICIARY.—The term

4 ‘‘Medicare beneficiary’’ means an individual entitled

5 to benefits under part A of title XVIII of the Social

6 Security Act or enrolled under part B of such title,

7 or both.

8 (4) HOSPICE PROGRAM.—The term ‘‘hospice

9 program’’ has the meaning given that term under

10 section 1861(dd)(2) of the Social Security Act (42

11 U.S.C. 1395x(dd)(2)).

12 (5) SECRETARY.—The term ‘‘Secretary’’ means

13 the Secretary of Health and Human Services.

14 SEC. 8. EFFECTIVE DATE.

15 The Secretary shall implement this Act as expedi16 tiously as practicable and in a manner consistent with the

17 obligations of the United States.

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