II 

109TH CONGRESS 

1ST SESSION S. 1903 

To amend title XIX of the Social Security Act to require drug manufacturers 

to report the average manufacturer price and the best price of authorized 

generic drugs and any other drugs sold under a new drug application 

approved under section 505(c) of the Federal Food, Drug, and Cosmetic 

Act to the Secretary of Health and Human Services. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 20, 2005 

Mr. ROCKEFELLER (for himself, Mr. SPECTER, Mr. SCHUMER, and Mr. 

MCCAIN) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend title XIX of the Social Security Act to require 

drug manufacturers to report the average manufacturer 

price and the best price of authorized generic drugs 

and any other drugs sold under a new drug application 

approved under section 505(c) of the Federal Food, 

Drug, and Cosmetic Act to the Secretary of Health and 

Human Services. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
2 

•S 1903 IS 

1 SECTION 1. SHORT TITLE. 

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

3 Drug Fairness Act of 2005’’. 

4 SEC. 2. IMPROVED REGULATION OF AUTHORIZED GENERIC 

5 DRUGS AND OTHER DRUGS SOLD UNDER A 

6 NEW DRUG APPLICATION APPROVED UNDER 

7 SECTION 505(C) OF THE FEDERAL FOOD, 

8 DRUG, AND COSMETIC ACT. 

9 (a) INCLUSION WITH OTHER REPORTED AVERAGE

10 MANUFACTURER AND BEST PRICES.—Section 

11 1927(b)(3)(A) (42 U.S.C. 1396r–8(b)(3)(A)) is amend12 ed— 

13 (1) by striking clause (i) and inserting the fol14 lowing: 

15 ‘‘(i) not later than 30 days after the 

16 last day of each rebate period under the 

17 agreement— 

18 ‘‘(I) on the average manufacturer 

19 price (as defined in subsection (k)(1)) 

20 for each covered outpatient drug for 

21 the rebate period under the agreement 

22 (including for each such drug that is 

23 an authorized generic drug or is any 

24 other drug sold under a new drug ap25 plication approved under section 
3 

•S 1903 IS 

1 505(c) of the Federal Food, Drug, 

2 and Cosmetic Act); and 

3 ‘‘(II) for each single source drug, 

4 innovator multiple source drug, au5 thorized generic drug, and any other 

6 drug sold under a new drug applica7 tion approved under section 505(c) of 

8 the Federal Food, Drug, and Cos9 metic Act, on the manufacturer’s best 

10 price (as defined in subsection 

11 (c)(1)(C)) for such drug for the rebate 

12 period under the agreement;’’; and 

13 (2) in clause (ii), by inserting ‘‘(including for 

14 such drugs that are authorized generic drugs or are 

15 any other drugs sold under a new drug application 

16 approved under section 505(c) of the Federal Food, 

17 Drug, and Cosmetic Act)’’ after ‘‘drugs’’. 

18 (b) CONFORMING AMENDMENTS.—Section 1927 of 

19 such Act (42 U.S.C. 1396r–8) is amended— 

20 (1) in subsection (c)(1)(C)— 

21 (A) in clause (i), in the matter preceding 

22 subclause (I), by striking ‘‘or innovator multiple 

23 source drug of a manufacturer’’ and inserting 

24 ‘‘, innovator multiple source drug, or authorized 

25 generic drug of a manufacturer, or any other 
4 

•S 1903 IS 

1 drug of a manufacturer that is sold under a 

2 new drug application approved under section 

3 505(c) of the Federal Food, Drug, and Cos4 metic Act’’; and 

5 (B) in clause (ii)— 

6 (i) in subclause (II), by striking 

7 ‘‘and’’ at the end; 

8 (ii) in subclause (III), by striking the 

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

10 and 

11 (iii) by adding at the end the fol12 lowing: 

13 ‘‘(IV) in the case of a manufac14 turer that approves, allows, or other15 wise permits an authorized generic 

16 drug or any other drug of the manu17 facturer to be sold under a new drug 

18 application approved under section 

19 505(c) of the Federal Food, Drug, 

20 and Cosmetic Act, shall be inclusive of 

21 the lowest price for such authorized 

22 generic or other drug available from 

23 the manufacturer during the rebate 

24 period to any wholesaler, retailer, pro25 vider, health maintenance organiza-
5 

•S 1903 IS 

1 tion, nonprofit entity, or governmental 

2 entity within the United States, ex3 cluding those prices described in sub4 clauses (I) through (IV) of clause 

5 (i).’’; and 

6 (2) in subsection (k)— 

7 (A) in paragraph (1)— 

8 (i) by striking ‘‘The term’’ and insert9 ing the following: 

10 ‘‘(A) IN GENERAL.—The term’’; and 

11 (ii) by adding at the end the fol12 lowing: 

13 ‘‘(B) INCLUSION OF AUTHORIZED GENERIC

14 DRUGS.—In the case of a manufacturer that 

15 approves, allows, or otherwise permits an au16 thorized generic drug or any other drug of the 

17 manufacturer to be sold under a new drug ap18 plication approved under section 505(c) of the 

19 Federal Food, Drug, and Cosmetic Act, such 

20 term shall be inclusive of the average price paid 

21 for such authorized generic or other drug by 

22 wholesalers for drugs distributed to the retail 

23 pharmacy class of trade, after deducting cus24 tomary prompt pay discounts.’’; and 

25 (B) by adding at the end the following: 
6 

•S 1903 IS 

1 ‘‘(10) AUTHORIZED GENERIC DRUG.—The term 

2 ‘authorized generic drug’ means a listed drug (as 

3 that term is used in section 505(j) of the Federal 

4 Food, Drug, and Cosmetic Act that— 

5 ‘‘(A) has been approved under section 

6 505(c) of such Act; and 

7 ‘‘(B) is marketed, sold, or distributed di8 rectly or indirectly to retail class of trade under 

9 a different labeling, packaging (other than re10 packaging as the listed drug in blister packs, 

11 unit doses, or similar packaging for use in insti12 tutions), product code, labeler code, trade name, 

13 or trade mark than the listed drug.’’. 

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

15 this section take effect on October 1, 2005. 

16 SEC. 3. APPLICATION OF BASIC REBATE FOR SINGLE 

17 SOURCE AND INNOVATOR MULTIPLE SOURCE 

18 DRUGS. 

19 (a) IN GENERAL.—Section 1927(c)(1) of the Social 

20 Security Act (42 U.S.C. 1396r–8(c)(1)) is amended— 

21 (1) in subparagraph (A), in the matter pre22 ceding clause (i), by striking ‘‘or an innovator mul23 tiple source drug’’ and inserting ‘‘, an innovator 

24 multiple source drug, or an authorized generic drug 

25 or any other drugs sold under a new drug applica-
7 

•S 1903 IS 

1 tion approved under section 505(c) of the Federal 

2 Food, Drug, and Cosmetic Act’’; and 

3 (2) in subparagraph (C)(i), by striking ‘‘or in4 novator multiple source drug’’ and inserting ‘‘, an 

5 innovator multiple source drug, or an authorized ge6 neric drug or any other drugs sold under a new drug 

7 application approved under section 505(c) of the 

8 Federal Food, Drug, and Cosmetic Act’’. 

9 (b) EFFECTIVE DATE.—The amendments made by 

10 subsection (a) shall take effect on the date of enactment 

11 of this Act and shall apply to rebate agreements entered 

12 into or renewed on or after that date. 

Æ