II

106TH CONGRESS

2D SESSION S. 2501

To provide access and choice for use of generic drugs instead of nongeneric

drugs under Federal health care programs, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 3, 2000

Mr. JOHNSON introduced the following bill; which was read twice and referred

to the Committee on Health, Education, Labor, and Pensions

A BILL

To provide access and choice for use of generic drugs instead

of nongeneric drugs under Federal health care programs,

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,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Generic Pharmaceutical Access and Choice for Con6 sumers Act of 2000’’.

7 (b) TABLE OF CONTENTS.—The table of contents of

8 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings and purposes.
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TITLE I—ENCOURAGEMENT OF THE USE OF GENERIC DRUGS

Sec. 101. Encouragement of the use of generic drugs under the Public Health

Service Act.

Sec. 102. Application to Federal employees health benefits program.

Sec. 103. Application to medicare program.

Sec. 104. Application to medicaid program.

Sec. 105. Application to Indian Health Service.

Sec. 106. Application to veterans programs.

Sec. 107. Application to recipients of uniformed services health care.

Sec. 108. Application to Federal prisoners.

TITLE II—THERAPEUTIC EQUIVALENCE REQUIREMENTS FOR

GENERIC DRUGS

Sec. 201. Therapeutic equivalence of generic drugs.

TITLE III—GENERIC PHARMACEUTICALS AND MEDICARE

REFORM

Sec. 301. Sense of the Senate regarding a preference for the use of generic

pharmaceuticals under the medicare program.

1 SEC. 2. FINDINGS AND PURPOSES.

2 (a) FINDINGS.—Congress makes the following find3 ings:

4 (1) Generic pharmaceuticals are approved by

5 the Food and Drug Administration on the basis of

6 testing and other information establishing that such

7 pharmaceuticals are therapeutically equivalent to

8 brand-name pharmaceuticals, ensuring consumers a

9 safe, efficacious, and cost-effective alternative to

10 brand-name pharmaceuticals.

11 (2) The pharmaceutical market has become in12 creasingly competitive during the last decade be13 cause of the increasing availability and accessibility

14 of generic pharmaceuticals.

15 (3) The Congressional Budget Office estimates

16 that—
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1 (A) the substitution of generic pharma2 ceuticals for brand-name pharmaceuticals will

3 save purchasers of pharmaceuticals between

4 $8,000,000,000 and $10,000,000,000 each

5 year; and

6 (B) quality generic pharmaceuticals cost

7 between 25 percent and 60 percent less than

8 brand-name pharmaceuticals, resulting in an es9 timated average savings of $15 to $30 on each

10 prescription filled.

11 (4) Generic pharmaceuticals are widely accepted

12 by both consumers and the medical profession, as

13 the market share held by generic pharmaceuticals

14 compared to brand-name pharmaceuticals has more

15 than doubled during the last decade, from approxi16 mately 19 percent to 43 percent, according to the

17 Congressional Budget Office.

18 (b) PURPOSES.—The purposes of this Act are—

19 (1) to reduce the cost of prescription drugs to

20 the United States Government and to beneficiaries

21 under Federal health care programs while maintain22 ing the quality of health care by encouraging the use

23 of generic drugs rather than nongeneric drugs under

24 those programs whenever feasible; and
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1 (2) to increase the utilization of generic phar2 maceuticals by requiring the Food and Drug Admin3 istration, where appropriate, to determine that a ge4 neric pharmaceutical is the therapeutic equivalent of

5 its brand-name counterpart, and by affording na6 tional uniformity to that determination.

7 TITLE I—ENCOURAGEMENT OF

8 THE USE OF GENERIC DRUGS

9 SEC. 101. ENCOURAGEMENT OF THE USE OF GENERIC

10 DRUGS UNDER THE PUBLIC HEALTH SERV11 ICE ACT.

12 (a) IN GENERAL.—Part B of title II of the Public

13 Health Service Act (42 U.S.C. 238 et seq.) is amended

14 by adding at the end the following new section:

15 ‘‘SEC. 247. USE OF GENERIC DRUGS ENCOURAGED.

16 ‘‘(a) Each grant or contract entered into under this

17 Act that involves the provision of health care items or serv18 ices to individuals shall include provisions to ensure that,

19 to the extent feasible, any prescriptions provided for under

20 such grant or contract are filled by providing the generic

21 form of the drug involved, unless the nongeneric form of

22 the drug is—

23 ‘‘(1) specifically ordered by the prescribing pro24 vider; or
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1 ‘‘(2) requested by the individual for whom the

2 drug is prescribed.

3 ‘‘(b) In this section:

4 ‘‘(1) The term ‘generic form of the drug’ means

5 a drug that is the subject of an application approved

6 under section 505(j) of the Federal Food, Drug, and

7 Cosmetic Act (21 U.S.C. 355(j)), for which the Sec8 retary has made a determination that the drug is

9 the therapeutic equivalent of a listed drug under sec10 tion 505(j)(5)(E) of that Act (21 U.S.C.

11 355(j)(5)(E)).

12 ‘‘(2) The term ‘nongeneric form of the drug’

13 means a drug that is the subject of an application

14 approved under section 505(b) of the Federal Food,

15 Drug, and Cosmetic Act (21 U.S.C. 355(b)).’’.

16 (b) EFFECTIVE DATE.—The amendment made by

17 this section shall apply with respect to any drug furnished

18 on or after the date of enactment of this Act.

19 SEC. 102. APPLICATION TO FEDERAL EMPLOYEES HEALTH

20 BENEFITS PROGRAM.

21 (a) IN GENERAL.—Section 8902 of title 5, United

22 States Code, is amended by adding at the end the fol23 lowing new subsection:

24 ‘‘(p) To the extent feasible, if a contract under this

25 chapter provides for the provision of, the payment for, or
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1 the reimbursement of the cost of any prescription drug,

2 the carrier shall provide, pay, or reimburse the cost of the

3 generic form of the drug (as defined in section 247(b)(1)

4 of the Public Health Service Act), except, if the nongeneric

5 form of the drug (as defined in section 247(b)(2) of such

6 Act) is—

7 ‘‘(1) specifically ordered by the prescribing pro8 vider; or

9 ‘‘(2) requested by the individual for whom the

10 drug is prescribed.’’.

11 (b) EFFECTIVE DATE.—The amendment made by

12 this section shall apply to any drug furnished during con13 tract years beginning on or after January 1, 2001.

14 SEC. 103. APPLICATION TO MEDICARE PROGRAM.

15 (a) IN GENERAL.—Section 1861(t) of the Social Se16 curity Act (42 U.S.C. 1395x(t)) is amended by adding at

17 the end the following new paragraph:

18 ‘‘(3) For purposes of paragraph (1), the term ‘drugs’

19 means, to the extent feasible, the generic form of the drug

20 (as defined in section 247(b)(1) of the Public Health Serv21 ice Act), unless the nongeneric form of such drug (as de22 fined in section 247(b)(2) of such Act) is—

23 ‘‘(A) specifically ordered by the health care pro24 vider; or
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1 ‘‘(B) requested by the individual to whom the

2 drug is provided.’’.

3 (b) EFFECTIVE DATE.—

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the amendment made by this section shall

6 apply with respect to any drug furnished on or after

7 the date of enactment of this Act.

8 (2) MEDICARE+CHOICE PLANS.—In the case of

9 a Medicare+Choice plan offered by a

10 Medicare+Choice organization under part C of title

11 XVIII of the Social Security Act (42 U.S.C. 1395w–

12 21 et seq.), the amendment made by this section

13 shall apply to any drug furnished during contract

14 years beginning on or after January 1, 2001.

15 SEC. 104. APPLICATION TO MEDICAID PROGRAM.

16 (a) IN GENERAL.—Section 1902(a) of the Social Se17 curity Act (42 U.S.C. 1396a(a)) is amended—

18 (1) in paragraph (64), by striking ‘‘and’’ at the

19 end;

20 (2) in paragraph (65), by striking the period at

21 the end and inserting ‘‘; and’’; and

22 (3) by adding the following new paragraph:

23 ‘‘(66) provide that the State shall, in conjunc24 tion with the program established under section

25 1927(g), to the extent feasible, provide for the use
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1 of a generic form of a drug (as defined in section

2 247(b)(1) of the Public Health Service Act), unless

3 the nongeneric form of the drug (as defined in sec4 tion 247(b)(2) of such Act is—

5 ‘‘(A) specifically ordered by the provider;

6 or

7 ‘‘(B) requested by the individual to whom

8 the drug is provided.’’.

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

10 this section shall apply with respect to any drug furnished

11 under State plans that are approved or renewed on or

12 after the date of enactment of this Act.

13 SEC. 105. APPLICATION TO INDIAN HEALTH SERVICE.

14 (a) IN GENERAL.—Title II of the Indian Health Care

15 Improvement Act (25 U.S.C. 1621 et seq.) is amended by

16 adding at the end the following new subsection:

17 ‘‘SEC. 225. USE OF GENERIC DRUGS ENCOURAGED.

18 ‘‘In providing health care items or services under this

19 Act, the Indian Health Service shall ensure that, to the

20 extent feasible, any prescriptions that are provided for

21 under this Act are filled by providing the generic form of

22 the drug (as defined in section 247(b)(1) of the Public

23 Health Service Act) involved, unless the nongeneric form

24 of the drug (as defined in section 247(b)(2) of such Act)

25 is—
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1 ‘‘(1) specifically ordered by the prescribing pro2 vider; or

3 ‘‘(2) requested by the individual for whom the

4 drug is prescribed.’’.

5 (b) EFFECTIVE DATE.—The amendment made by

6 this section shall apply with respect to any drug furnished

7 on or after the date of enactment of this Act.

8 SEC. 106. APPLICATION TO VETERANS PROGRAMS.

9 (a) USE OF GENERIC DRUGS ENCOURAGED.—Sub10 chapter III of chapter 17 of title 38, United States Code,

11 is amended by inserting after section 1722A the following

12 new section:

13 ‘‘§ 1722B. Use of generic drugs encouraged

14 ‘‘When furnishing a prescription drug under this

15 chapter, the Secretary shall furnish a generic form of the

16 drug (as defined in section 247(b)(1) of the Public Health

17 Service Act), unless the nongeneric form of the drug (as

18 defined in section 247(b)(2) of such Act) is—

19 ‘‘(1) specifically ordered by the prescribing pro20 vider; or

21 ‘‘(2) requested by the individual for whom the

22 drug is prescribed.’’.

23 (b) CLERICAL AMENDMENT.—The table of sections

24 at the beginning of chapter 17 of such title is amended

25 by inserting after the item relating to section 1722A the
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1 following new item:

‘‘1722B. Use of generic drugs encouraged.’’.

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

3 this section shall apply with respect to any drug furnished

4 on or after the date of enactment of this Act.

5 SEC. 107. APPLICATION TO RECIPIENTS OF UNIFORMED

6 SERVICES HEALTH CARE.

7 (a) USE OF GENERIC DRUGS ENCOURAGED.—Chap8 ter 55 of title 10, United States Code, is amended by add9 ing at the end the following new section:

10 ‘‘§ 1110. Use of generic drugs encouraged

11 ‘‘The Secretary of Defense shall ensure that, when12 ever feasible, each health care provider who furnishes a

13 drug furnishes the generic form of the drug (as defined

14 in section 247(b)(1) of the Public Health Service Act), un15 less the nongeneric form of the drug (as defined in section

16 247(b)(2) of such Act) is—

17 ‘‘(1) specifically ordered by the prescribing pro18 vider; or

19 ‘‘(2) requested by the individual for whom the

20 drug is prescribed.’’.

21 (b) CLERICAL AMENDMENT.—The table of sections

22 at the beginning of such chapter is amended by inserting

23 after the item relating to section 1109 the following new

24 item:

‘‘1110. Use of generic drugs encouraged.’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply with respect to any drug furnished

3 on or after the date of enactment of this Act.

4 SEC. 108. APPLICATION TO FEDERAL PRISONERS.

5 (a) IN GENERAL.—Section 4006(b) of title 18,

6 United States Code, is amended by adding at the end the

7 following new paragraph:

8 ‘‘(3) USE OF GENERIC DRUGS ENCOURAGED.—

9 The Attorney General shall ensure that, whenever

10 feasible, each health care provider who furnishes a

11 drug to a prisoner charged with or convicted of an

12 offense against the United States furnishes the ge13 neric form of the drug (as defined in section

14 247(b)(1) of the Public Health Service Act), unless

15 the nongeneric form of the drug (as defined in sec16 tion 247(b)(2) of such Act) is—

17 ‘‘(A) specifically ordered by the prescribing

18 provider; or

19 ‘‘(B) requested by the prisoner for whom

20 the drug is prescribed.’’.

21 (b) EFFECTIVE DATE.—The amendment made by

22 this section shall apply with respect to any drug furnished

23 on or after the date of enactment of this Act.
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1 TITLE II—THERAPEUTIC

2 EQUIVALENCE REQUIRE3 MENTS FOR GENERIC DRUGS

4 SEC. 201. THERAPEUTIC EQUIVALENCE OF GENERIC

5 DRUGS.

6 (a) IN GENERAL.—Section 505(j) of the Federal

7 Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)) is

8 amended—

9 (1) in paragraph (5), by adding at the end the

10 following new subparagraph:

11 ‘‘(E)(i) For each abbreviated application filed under

12 paragraph (1), the Secretary shall determine whether the

13 new drug for which the application is filed is the thera14 peutic equivalent of the listed drug referred to in para15 graph (2)(A)(i) prior to the approval of the application.

16 ‘‘(ii) For purposes of clause (i), a new drug is the

17 therapeutic equivalent of a listed drug if—

18 ‘‘(I) each active ingredient of the new drug and

19 the listed drug is the same;

20 ‘‘(II) the new drug and the listed drug (aa) are

21 of the same dosage form; (bb) have the same route

22 of administration; (cc) are identical in strength or

23 concentration; (dd) meet the same compendial or

24 other applicable standards, except that the drugs

25 may differ in shape, scoring, configuration, pack-
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1 aging, excipient, expiration time, or, subject to para2 graph (2)(A)(v), labeling; and (ee) are expected to

3 have the same clinical effect and safety profile when

4 administered to patients under conditions specified

5 in the labeling; and

6 ‘‘(III) the new drug does not (aa) present a

7 known or potential bioequivalence problem and

8 meets an acceptable in vitro standard; or (bb) if the

9 new drug presents a known or potential bioequiva10 lence problem, the drug is shown to meet an appro11 priate bioequivalence standard.

12 ‘‘(iii) With respect to a new drug for which an abbre13 viated application is filed under paragraph (1), the provi14 sions of this subparagraph shall supersede any provisions

15 of the law of any State relating to the determination of

16 the therapeutic equivalence of the drug to a listed drug.’’;

17 and

18 (2) in paragraph (7)(A), by adding at the end

19 the following:

20 ‘‘(iv) The Secretary shall include in each revi21 sion of the list under clause (ii) on or after the date

22 of enactment of this clause the official and propri23 etary name of each listed drug that is therapeuti24 cally equivalent to a new drug approved under this
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1 subsection during the preceding 30-day period, as

2 determined under paragraph (5)(E).’’.

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

4 this section shall take effect on the date of enactment of

5 this Act.

6 TITLE III—GENERIC PHARMA7 CEUTICALS AND MEDICARE

8 REFORM

9 SEC. 301. SENSE OF THE SENATE REGARDING A PREF10 ERENCE FOR THE USE OF GENERIC PHARMA11 CEUTICALS UNDER THE MEDICARE PRO12 GRAM.

13 It is the sense of the Senate that legislative language

14 requiring, to the extent feasible, a preference for the safe

15 and cost-effective use of generic pharmaceuticals should

16 be considered in conjunction with any legislation that adds

17 a comprehensive prescription drug benefit to the medicare

18 program under title XVIII of the Social Security Act (42

19 U.S.C. 1395 et seq.).

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