I 

110TH CONGRESS 

1ST SESSION H. R. 1218 

To amend part D of title XVIII of the Social Security Act to authorize 

the Secretary of Health and Human Services to negotiate for lower 

prices for Medicare prescription drugs and to eliminate the gap in coverage of Medicare prescription drug benefits, to authorize the Secretary 

of Health and Human Services to promulgate regulations for the reimportation of prescription drugs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 27, 2007 

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

on Energy and 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 part D of title XVIII of the Social Security 

Act to authorize the Secretary of Health and Human 

Services to negotiate for lower prices for Medicare prescription drugs and to eliminate the gap in coverage 

of Medicare prescription drug benefits, to authorize the 

Secretary of Health and Human Services to promulgate 

regulations for the reimportation of 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 Improvement Act’’. 

4 TITLE I—IMPROVEMENT OF 

5 MEDICARE PRESCRIPTION 

6 DRUG BENEFITS 

7 SEC. 101. PERMITTING THE NEGOTIATION OF FAIR PRICES 

8 FOR MEDICARE PRESCRIPTION DRUGS ON 

9 BEHALF OF MEDICARE BENEFICIARIES. 

10 Section 1860D–11 of the Social Security Act (42 

11 U.S.C. 1395w–111) is amended by striking subsection (i) 

12 (relating to noninterference) and inserting the following: 

13 ‘‘(i) AUTHORITY TO NEGOTIATE PRICES WITH MAN14 UFACTURERS.—In order to ensure that beneficiaries en15 rolled under prescription drug plans, MA–PD plans, and 

16 qualified retiree prescription drug plans pay the lowest 

17 possible price, the Secretary shall have authority similar 

18 to that of the Secretary of Veterans Affairs, Secretary of 

19 Defense, and the heads of other Federal agencies and de20 partments that purchase prescription drugs in bulk to ne21 gotiate contracts with manufacturers of covered part D 

22 drugs, consistent with the requirements and in further23 ance of the goals of providing quality care and containing 

24 costs under this part.’’. 


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1 SEC. 102. ELIMINATION OF GAP IN COVERAGE OF PRE2 SCRIPTION DRUG BENEFITS. 

3 (a) IN GENERAL.—Paragraph (3) of section 1860D– 

4 2(b) of the Social Security Act (42 U.S.C. 1395w–102(b)) 

5 is repealed. 

6 (b) CONFORMING AMENDMENTS.—(1) Section 

7 1860D–2 of such Act (42 U.S.C. 1395w–102) is amend8 ed— 

9 (A) in subsection (a)(2)(A)(i)(I), by strik10 ing ‘‘, or an increase in the initial coverage 

11 limit with respect to covered part D drugs’’; 

12 (B) in subsection (b)(2)(A), by striking 

13 ‘‘and up to the initial coverage limit under 

14 paragraph (3)’’; 

15 (C) in subsection (b)(4)(C)(i)— 

16 (i) by striking the comma after ‘‘para17 graph (1)’’ and inserting ‘‘and’’; and 

18 (ii) by striking ‘‘, and for amounts for 

19 which benefits are not provided because of 

20 the application of the initial coverage limit 

21 described in paragraph (3)’’; 

22 (D) in subsection (c)(1), by striking sub23 paragraph (C); and 

24 (E) in subsection (d)(1)(A), by striking ‘‘or 

25 an initial coverage limit (described in subsection 

26 (b)(3))’’. 


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1 (2) Section 1860D–4(a)(4)(B) of such Act (42 

2 U.S.C. 1395w–104(a)(4)(B)) is amended to read as 

3 follows: 

4 ‘‘(B) when prescription drug benefits are 

5 provided under this part, a notice of the bene6 fits in relation to the annual out-of-pocket 

7 threshold for the current year.’’. 

8 (3)(A) Section 1860D–14(a) of such Act (42 

9 U.S.C. 1395w–114(a)) is amended— 

10 (i) in paragraph (1), by striking subpara11 graph (C) and redesignating subparagraphs (D) 

12 and (E) as subparagraphs (C) and (D), respec13 tively; 

14 (ii) in paragraph (2), by striking subpara15 graph (C) and redesignating subparagraphs (D) 

16 and (E) as subparagraphs (C) and (D), respec17 tively; and 

18 (iii) in paragraph (4)(A) in the matter pre19 ceding clause (i), by striking ‘‘paragraph 

20 (1)(D)(ii)’’ and inserting ‘‘paragraph 

21 (1)(C)(ii)’’. 

22 (B) Section 1860D–14(c)(1) of such Act (42 

23 U.S.C. 1395w–114(c)(1)) is amended in the second 

24 sentence by striking ‘‘subsections (a)(1)(D) and 


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1 (a)(2)(E)’’ and inserting ‘‘subsections (a)(1)(C) and 

2 (a)(2)(D)’’. 

3 (C) Section 1860D–15(e)(1)(B) of such Act (42 

4 U.S.C. 1395w–115(e)(1)(B)) is amended by striking 

5 ‘‘paragraphs (1)(D) and (2)(E)’’ and inserting 

6 ‘‘paragraphs (1)(C) and (2)(D)’’. 

7 (4)(A) Section 1860D–41(a)(6) of such Act (42 

8 U.S.C. 1395w–151(a)(6)) is amended by striking 

9 paragraph (6) and redesignating paragraphs (7) 

10 through (18) as paragraphs (6) through (17), re11 spectively. 

12 (B) Section 1860D–1(a)(1)(A) of such Act (42 

13 U.S.C. 1395w–101(a)(1)(A)) is amended by striking 

14 ‘‘1860D–41(a)(14)’’ and inserting ‘‘1860D– 

15 41(a)(13)’’. 

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

17 this section shall apply to benefits for plan years beginning 

18 after the date of the enactment of this Act. 

19 TITLE II—IMPORTATION OF 

20 PRESCRIPTION DRUGS 

21 SEC. 201. SHORT TITLE. 

22 This title may be cited as the ‘‘Pharmaceutical Mar23 ket Access Act of 2007’’. 


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1 SEC. 202. IMPORTATION OF PRESCRIPTION DRUGS. 

2 (a) NULLIFICATION OF CERTAIN AMENDMENTS

3 MADE BY PUBLIC LAW 108–173.—The Federal Food, 

4 Drug, and Cosmetic Act is amended— 

5 (1) in section 804 (21 U.S.C. 384), by amend6 ing the section to read as if section 1121(a) of Pub7 lic Law 108–173 had not been enacted; 

8 (2) in section 301 (21 U.S.C. 331), by amend9 ing the section to read as if section 1121(b)(1) of 

10 Public Law 108–173 had not been enacted; and 

11 (3) in section 303 (21 U.S.C. 333), by amend12 ing the section to read as if section 1121(b)(2) of 

13 Public Law 108–173 had not been enacted. 

14 (b) IMPORTATION OF PRESCRIPTION DRUGS.—Sec15 tion 804 of the Federal Food, Drug, and Cosmetic Act 

16 (21 U.S.C. 384), as amended by subsection (a)(1) of this 

17 section, is amended— 

18 (1) in subsection (a)— 

19 (A) by striking ‘‘The Secretary’’ and in20 serting ‘‘Not later than 180 days after the date 

21 of the enactment of the Pharmaceutical Market 

22 Access Act of 2007, the Secretary’’; and 

23 (B) by striking ‘‘pharmacists and whole24 salers’’ and inserting ‘‘pharmacists, wholesalers, 

25 and qualifying individuals’’; 

26 (2) in subsection (b)— 


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1 (A) by amending paragraph (1) to read as 

2 follows: 

3 ‘‘(1) require that each covered product imported 

4 pursuant to such subsection complies with sections 

5 501, 502, and 505, and other applicable require6 ments of this Act; and’’; 

7 (B) in paragraph (2), by striking ‘‘, includ8 ing subsection (d); and’’ and inserting a period; 

9 and 

10 (C) by striking paragraph (3); 

11 (3) in subsection (c), by inserting ‘‘by phar12 macists and wholesalers (but not qualifying individ13 uals)’’ after ‘‘importation of covered products’’; 

14 (4) in subsection (d)— 

15 (A) by striking paragraphs (3) and (10); 

16 (B) in paragraph (5), by striking ‘‘, includ17 ing the professional license number of the im18 porter, if any’’; 

19 (C) in paragraph (6)— 

20 (i) in subparagraph (C), by inserting 

21 ‘‘(if required under subsection (e))’’ before 

22 the period; 

23 (ii) in subparagraph (D), by inserting 

24 ‘‘(if required under subsection (e))’’ before 

25 the period; and 


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1 (iii) in subparagraph (E), by striking 

2 ‘‘labeling’’; 

3 (D) in paragraph (7)— 

4 (i) in subparagraph (A), by inserting 

5 ‘‘(if required under subsection (e))’’ before 

6 the period; and 

7 (ii) by amending subparagraph (B) to 

8 read as follows: 

9 ‘‘(B) Certification from the importer or 

10 manufacturer of such product that the product 

11 meets all requirements of this Act.’’; and 

12 (E) by redesignating paragraphs (4) 

13 through (9) as paragraphs (3) through (8), re14 spectively; 

15 (5) by amending subsection (e) to read as fol16 lows: 

17 ‘‘(e) TESTING.— 

18 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

19 regulations under subsection (a) shall require that 

20 testing referred to in paragraphs (5) through (7) of 

21 subsection (d) be conducted by the importer of the 

22 covered product, unless the covered product is a pre23 scription drug subject to the requirements of section 

24 505C for counterfeit-resistant technologies. 


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1 ‘‘(2) EXCEPTION.—The testing requirements of 

2 paragraphs (5) through (7) of subsection (d) shall 

3 not apply to an importer unless the importer is a 

4 wholesaler.’’; 

5 (6) in subsection (f), by striking ‘‘or designated 

6 by the Secretary, subject to such limitations as the 

7 Secretary determines to be appropriate to protect 

8 the public health’’; 

9 (7) in subsection (g)— 

10 (A) by striking ‘‘counterfeit or’’; and 

11 (B) by striking ‘‘and the Secretary deter12 mines that the public is adequately protected 

13 from counterfeit and violative covered products 

14 being imported pursuant to subsection (a)’’; 

15 (8) in subsection (i)(1)— 

16 (A) by amending subparagraph (A) to read 

17 as follows: 

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

19 conduct, or contract with an entity to conduct, 

20 a study on the imports permitted pursuant to 

21 subsection (a), including consideration of the 

22 information received under subsection (d). In 

23 conducting such study, the Secretary or entity 

24 shall evaluate the compliance of importers with 

25 regulations under subsection (a), and the inciVerDate Aug 31 2005 22:01 Mar 01, 2007 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1218.IH H1218

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1 dence of shipments pursuant to such sub2 section, if any, that have been determined to be 

3 misbranded or adulterated, and determine how 

4 such compliance contrasts with the incidence of 

5 shipments of prescription drugs transported 

6 within the United States that have been deter7 mined to be misbranded or adulterated.’’; and 

8 (B) in subparagraph (B), by striking ‘‘Not 

9 later than 2 years after the effective date of 

10 final regulations under subsection (a),’’ and in11 serting ‘‘Not later than 18 months after the 

12 date of the enactment of the Pharmaceutical 

13 Market Access Act of 2007,’’; 

14 (9) in subsection (k)(2)— 

15 (A) by redesignating subparagraphs (D) 

16 and (E) as subparagraphs (E) and (F), respec17 tively; and 

18 (B) by inserting after subparagraph (C) 

19 the following: 

20 ‘‘(D) The term ‘qualifying individual’ 

21 means an individual who is not a pharmacist or 

22 a wholesaler.’’; and 

23 (10) by striking subsections (l) and (m). 


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1 SEC. 203. USE OF COUNTERFEIT-RESISTANT TECH2 NOLOGIES TO PREVENT COUNTERFEITING. 

3 (a) MISBRANDING.—Section 502 of the Federal 

4 Food, Drug, and Cosmetic Act (21 U.S.C. 352; deeming 

5 drugs and devices to be misbranded) is amended by adding 

6 at the end the following: 

7 ‘‘(y) If it is a drug subject to section 503(b), unless 

8 the packaging of such drug complies with the require9 ments of section 505C for counterfeit-resistant tech10 nologies.’’. 

11 (b) REQUIREMENTS.—Title V of the Federal Food, 

12 Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend13 ed by inserting after section 505B the following: 

14 ‘‘SEC. 505C. COUNTERFEIT-RESISTANT TECHNOLOGIES. 

15 ‘‘(a) INCORPORATION OF COUNTERFEIT-RESISTANT

16 TECHNOLOGIES INTO PRESCRIPTION DRUG PACK17 AGING.—The Secretary shall require that the packaging 

18 of any drug subject to section 503(b) incorporate— 

19 ‘‘(1) overt optically variable counterfeit-resist20 ant technologies that are described in subsection (b) 

21 and comply with the standards of subsection (c); or 

22 ‘‘(2) technologies that have an equivalent func23 tion of security, as determined by the Secretary. 

24 ‘‘(b) ELIGIBLE TECHNOLOGIES.—Technologies de25 scribed in this subsection— 


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1 ‘‘(1) shall be visible to the naked eye, providing 

2 for visual identification of product authenticity with3 out the need for readers, microscopes, lighting de4 vices, or scanners; 

5 ‘‘(2) shall be similar to that used by the Bureau 

6 of Engraving and Printing to secure United States 

7 currency; 

8 ‘‘(3) shall be manufactured and distributed in a 

9 highly secure, tightly controlled environment; and 

10 ‘‘(4) should incorporate additional layers of 

11 non-visible covert security features up to and includ12 ing forensic capability. 

13 ‘‘(c) STANDARDS FOR PACKAGING.— 

14 ‘‘(1) MULTIPLE ELEMENTS.—For the purpose 

15 of making it more difficult to counterfeit the pack16 aging of drugs subject to section 503(b), manufac17 turers of the drugs shall incorporate the technologies 

18 described in subsection (b) into multiple elements of 

19 the physical packaging of the drugs, including blister 

20 packs, shrink wrap, package labels, package seals, 

21 bottles, and boxes. 

22 ‘‘(2) LABELING OF SHIPPING CONTAINER.— 

23 Shipments of drugs described in subsection (a) shall 

24 include a label on the shipping container that incor25 porates the technologies described in subsection (b), 


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1 so that officials inspecting the packages will be able 

2 to determine the authenticity of the shipment. Chain 

3 of custody procedures shall apply to such labels and 

4 shall include procedures applicable to contractual 

5 agreements for the use and distribution of the labels, 

6 methods to audit the use of the labels, and database 

7 access for the relevant governmental agencies for 

8 audit or verification of the use and distribution of 

9 the labels.’’. 

Æ 


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