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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1992 Introduced in Senate (IS)]

108th CONGRESS
  1st Session
                                S. 1992

To amend the Medicare Prescription Drug, Improvement, and Modernization 
  Act of 2003 to eliminate privatization of the medicare program, to 
   improve the medicare prescription drug benefit, to repeal health 
               savings accounts, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            December 9, 2003

  Mr. Kennedy introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To amend the Medicare Prescription Drug, Improvement, and Modernization 
  Act of 2003 to eliminate privatization of the medicare program, to 
   improve the medicare prescription drug benefit, to repeal health 
               savings accounts, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as ``Defense of Medicare 
and Real Medicare Prescription Drug Benefit Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                      TITLE I--DEFENSE OF MEDICARE

Sec. 101. Application of risk adjustment reflecting characteristics for 
                            the entire medicare population.
Sec. 102. Phase-in to payment at 100 percent of fee-for-service rate.
Sec. 103. Elimination of MA Regional Plan Stabilization Fund (slush 
                            fund).
Sec. 104. Repeal of premium support program.
Sec. 105. Repeal of medicare expenditures cap.
   TITLE II--ESTABLISHMENT OF REAL MEDICARE PRESCRIPTION DRUG BENEFIT

Sec. 201. Elimination of coverage gap.
Sec. 202. Elimination of discriminatory treatment of employer plans.
Sec. 203. Allowing medicaid wrap.
Sec. 204. Elimination of assets test.
Sec. 205. Requiring two prescription drug plans to avoid federal 
                            fallback.
Sec. 206. Secretary defining classes and categories under any 
                            formulary.
Sec. 207. Provision of wrap-around prescription drug coverage through 
                            medigap.
Sec. 208. No additional beneficiary premium.
Sec. 209. Elimination of State maintenance of effort.
            TITLE III--REDUCTION IN PRESCRIPTION DRUG PRICES

Sec. 301. Importation of prescription drugs.
Sec. 302. Negotiating fair prices for medicare prescription drugs.
              TITLE IV--REPEAL OF HEALTH SAVINGS ACCOUNTS

Sec. 401. Repeal of health savings accounts.

                      TITLE I--DEFENSE OF MEDICARE

SEC. 101. APPLICATION OF RISK ADJUSTMENT REFLECTING CHARACTERISTICS FOR 
              THE ENTIRE MEDICARE POPULATION.

    Effective January 1, 2005, in applying risk adjustment factors to 
payment to organizations under section 1853 of the Social Security Act 
(42 U.S.C. 1395w-23) in a budget neutral manner, the Secretary of 
Health and Human Services shall assure that such factors, in the 
aggregate, take into account the actuarial characteristics of the 
entire medicare population, and not merely the population of 
individuals enrolled under a plan under part C of title XVIII of such 
Act.

SEC. 102. PHASE-IN TO PAYMENT AT 100 PERCENT OF FEE-FOR-SERVICE RATE.

    Notwithstanding any other provision of law, the Secretary of Health 
and Human Services shall provide, in a phased-in manner over a 5-year 
period beginning with 2005, for adjustment of payment rates to 
organizations under section 1853 of the Social Security Act so that, at 
the end of such phase-in period, such payment rates reflect only the 
payment rate described in subsection (c)(1)(D) of such section 
(relating to 100 percent fee-for-service payment).

SEC. 103. ELIMINATION OF MA REGIONAL PLAN STABILIZATION FUND (SLUSH 
              FUND).

    Subsection (e) of section 1858 of the Social Security Act, as added 
by section 221(c) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003, is repealed.

SEC. 104. REPEAL OF PREMIUM SUPPORT PROGRAM.

    Effective as if included in the enactment of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003, subtitle 
E of title I of such Act is repealed and any provisions of law amended 
by such subtitle are restored as if such subtitle had not been enacted.

SEC. 105. REPEAL OF MEDICARE EXPENDITURE CAP.

    Subtitle A of title VIII of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 is repealed and any 
provisions of law amended by such subtitle are restored as if such 
subtitle had not been enacted.

   TITLE II--ESTABLISHMENT OF REAL MEDICARE PRESCRIPTION DRUG BENEFIT

SEC. 201. ELIMINATION OF COVERAGE GAP.

    (a) In General.--Section 1860D-2(b) of the Social Security Act, as 
added by section 101(a) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003, is amended--
            (1) in paragraph (3)(A), by striking ``paragraph (4)'' and 
        inserting ``paragraphs (4) and (5)'';
            (2) by redesignating paragraph (5) as paragraph (7) and by 
        moving such paragraph to follow paragraph (6); and
            (3) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Phased-in elimination of coverage gap.--The coverage 
        provides continuation of benefits from the initial coverage 
        limit (under paragraph (3)) for expenditures incurred through 
        the total amount of expenditures at which benefits are 
        available under paragraph (4), subject to coinsurance of the 
        following:
                    ``(A) 2006, 2007, and 2008.--During the years 2006 
                through 2008, 75 percent (or actuarially equivalent, 
                using processes and methods established under section 
                1860D-11(c)) to an average expected payment of 75 
                percent of such costs.
                    ``(B) 2009, 2010, and 2011.--During the years 2009 
                through 2011, 50 percent (or actuarially equivalent, 
                using processes and methods established under section 
                1860D-11(c)) to an average expected payment of 50 
                percent of such costs.
                    ``(C) 2012 and subsequent years.--During 2012 and 
                each subsequent year, 25 percent (or actuarially 
                equivalent, using processes and methods established 
                under section 1860D-11(c)) to an average expected 
                payment of 25 percent of such costs.
        The provisions of paragraph (2)(B) shall apply under this 
        paragraph in the same manner as they apply with respect to 
        paragraph (2)(A).''.
    (b) Conforming Amendment.--Section 1860D-14(a) of such Act, as so 
added, is amended by striking subparagraph (C) of paragraphs (1) and 
(2).

SEC. 202. ELIMINATION OF DISCRIMINATORY TREATMENT OF EMPLOYER PLANS.

    (a) Elimination of True Out-of-Pocket Limitation.--Section 1860D-
2(b)(4)(C) of the Social Security Act, as added by section 101(a) of 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003, is amended to read as follows:
                    ``(C) Application.--In applying subparagraph (A), 
                incurred costs shall only include costs incurred with 
                respect to covered part D drugs for the annual 
                deductible described in paragraph (1), for cost-sharing 
                described in paragraph (2), and for amounts for which 
                benefits are not provided because of the application of 
                the initial coverage limit described in paragraph (3), 
                but does not include any costs incurred for covered 
                part D drugs which are not included (or treated as 
                being included) in the plan's formulary.''.
    (b) Equalization of Subsidies.--Notwithstanding any other provision 
of law, the Secretary of Health and Human Services shall provide for 
such increase in the special subsidy payment amounts under section 
1860D-22(a)(3) of the Social Security Act, as added by section 101(a) 
of the Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003, as may be appropriate to provide for payments in the aggregate 
equivalent to the payments that would have been made under section 
1860D-15 of such Act if the individuals were not enrolled in a 
qualified retiree prescription drug plan. In making such computation, 
the Secretary shall not take into account the application of the 
amendments made by section 1202 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003.

SEC. 203. ALLOWING MEDICAID WRAP.

    Section 1935(d) of the Social Security Act, as added by section 
103(c) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003, is repealed.

SEC. 204. ELIMINATION OF ASSETS TEST.

    (a) In General.--Section 1860D-14 of the Social Security Act, as 
added by section 101(a) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003, is amended as follows:
            (1) In subsection (a)(1), strike ``and who meets the 
        resource requirements of paragraph (3)(B)''.
            (2) In subsection (a)(3)(A), add ``and'' at the end of 
        clause (i), strike ``; and'' at the end of clause (ii) and 
        inserting period, and strike clause (iii).
            (3) In subsection (a)(3), strike subparagraphs (D) and (E).
    (b) Conforming Amendment.--Section 107(e) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 is 
repealed.

SEC. 205. REQUIRING TWO PRESCRIPTION DRUG PLANS TO AVOID FEDERAL 
              FALLBACK.

    Section 1860D-3(a) of the Social Security Act, as added by section 
101(a) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003, is amended--
            (1) in paragraph (1), by striking ``qualifying plans (as 
        defined in paragraph (3)'' and inserting ``prescription drug 
        plans'';
            (2) in paragraph (2), by striking ``qualifying plans'' and 
        inserting ``prescription drug plans'';
            (3) by striking paragraph (3).

SEC. 206. SECRETARY DEFINING CLASSES AND CATEGORIES UNDER ANY 
              FORMULARY.

    Notwithstanding any other provision of law, no formulary may be 
established or applied under part D of title XVIII of the Social 
Security Act, as added by section 101(a) of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003, unless the classes 
and categories used under such formulary are such classes and 
categories as the Secretary of Health and Human Services shall specify.

SEC. 207. PROVISION OF WRAP-AROUND PRESCRIPTION DRUG COVERAGE THROUGH 
              MEDIGAP.

    Section 1882(v) of the Social Security Act (42 U.S.C. 1395ss(v)), 
as added by section 104(a) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003, is amended as follows:
            (1) In paragraph (1)(A), by inserting ``, other than such a 
        policy that provides wrap-around prescription drug coverage 
        included within a range of such coverage approved under 
        subparagraph (D)(ii),'' after ``paragraph (6)(A))''.
            (2) Add at the end of paragraph (1) the following new 
        subparagraph:
                    ``(D) Wrap-around prescription drug coverage.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of this subsection, a medigap 
                        Rx policy that provides wrap-around 
                        prescription drug coverage included within a 
                        range of such coverage approved by the 
                        Secretary under clause (ii) may be offered to 
                        part D enrollees.
                            ``(ii) Development of standards.--The 
                        Secretary shall approve a range of wrap-around 
                        prescription drug coverage that may be offered 
                        under this subparagraph to part D enrollees.''.

SEC. 208. NO ADDITIONAL BENEFICIARY PREMIUM.

    Notwithstanding any other provision of law, the Secretary of Health 
and Human Services shall provide for such adjustment in payments to PDP 
sponsors under part D of title XVIII of the Social Security Act, and to 
MA organizations offering MA-PD plans under part C of such title, as 
may be appropriate to assure that premiums of part D eligible 
individuals under prescription drug plans and under MA-PD plans are not 
increased as a result of this Act (and the amendments made by this 
Act).

SEC. 209. ELIMINATION OF STATE MAINTENANCE OF EFFORT.

    Section 1935(c)(5) of the Social Security Act, as added by section 
103(c) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003, is amended--
            (1) by striking ``or'' at the end of subparagraph (I); and
            (2) by striking subparagraph (J) and inserting the 
        following new subparagraphs:
                    ``(J) in each of 2014 and 2015 is 75 percent;
                    ``(K) in 2016 is 67.5 percent;
                    ``(L) in 2017 is 60 percent;
                    ``(M) in 2018 is 52.5 percent;
                    ``(N) in 2019 is 45 percent;
                    ``(O) in 2020 is 37.5 percent;
                    ``(P) in 2021 is 30 percent;
                    ``(Q) in 2022 is 22.5 percent;
                    ``(R) in 2023 is 15 percent;
                    ``(S) in 2024 is 7.5 percent; or
                    ``(T) after December 2024, is 0 percent.''.

            TITLE III--REDUCTION IN PRESCRIPTION DRUG PRICES

SEC. 301. IMPORTATION OF PRESCRIPTION DRUGS.

    (a) In General.--Chapter VIII of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 381 et seq.) is amended by striking section 804 
and inserting the following:

``SEC. 804. IMPORTATION OF PRESCRIPTION DRUGS.

    ``(a) Definitions.--In this section:
            ``(1) Canadian pharmacist.--The term `Canadian pharmacist' 
        means a person licensed in Canada to practice pharmacy, 
        including the dispensing and selling of prescription drugs.
            ``(2) Canadian wholesaler.--The term `Canadian wholesaler' 
        means a person licensed in Canada to distribute within Canada 
        prescription drugs that have been approved by Health Canada.
            ``(3) Canadian exporter.--The term `Canadian exporter' 
        means a Canadian pharmacist or Canadian wholesaler.
            ``(4) Importer.--The term `importer' means a pharmacist or 
        wholesaler.
            ``(5) Pharmacist.--The term `pharmacist' means a person 
        licensed by a State to practice pharmacy, including the 
        dispensing and selling of prescription drugs.
            ``(6) Prescription drug.--The term `prescription drug' 
        means a drug subject to section 503(b), other than--
                    ``(A) a controlled substance (as defined in section 
                102 of the Controlled Substances Act (21 U.S.C. 802));
                    ``(B) a biological product (as defined in section 
                351 of the Public Health Service Act (42 U.S.C. 262));
                    ``(C) an infused drug (including a peritoneal 
                dialysis solution);
                    ``(D) an intravenously injected drug; or
                    ``(E) a drug that is inhaled during surgery.
            ``(7) Qualifying laboratory.--The term `qualifying 
        laboratory' means a laboratory in the United States that has 
        been approved by the Secretary for the purposes of this 
        section.
            ``(8) Wholesaler.--
                    ``(A) In general.--The term `wholesaler' means a 
                person licensed as a wholesaler or distributor of 
                prescription drugs in the United States under section 
                503(e)(2)(A).
                    ``(B) Exclusion.--The term `wholesaler' does not 
                include a person authorized to import drugs under 
                section 801(d)(1).
    ``(b) Regulations.--No later than 18 months after the date of 
enactment of this section, the Secretary, after consultation with the 
United States Trade Representative and the Commissioner of Customs, 
shall promulgate regulations permitting pharmacists and wholesalers to 
import prescription drugs from Canada into the United States.
    ``(c) Limitation.--The regulations under subsection (b) shall--
            ``(1) require that a Canadian exporter--
                    ``(A) register with the Secretary the name and 
                place of business of the Canadian exporter (and 
                including the place of business of each warehouse and 
                establishment of the Canadian exporter);
                    ``(B) export only prescription drugs that have been 
                approved by Health Canada and meet all requirements of 
                Canadian law;
                    ``(C) permit inspections by the Secretary 
                (including inspections of all records, including 
                financial records) of each warehouse and establishment 
                of the Canadian exporter; and
                    ``(D) pay an inspection fee to the Secretary on a 
                semiannual basis not to exceed 5 percent of the total 
                price of prescription drugs exported by the Canadian 
                exporter to the United States under the regulations 
                (which fees the Secretary shall use solely to inspect 
                the warehouses and establishments of Canadian exporters 
                and to monitor imports of prescription drugs at ports 
                of entry);
            ``(2) require that each prescription drug imported under 
        the regulations be imported directly from a Canadian exporter 
        through a limited number of ports of entry (at which the 
        Secretary shall monitor such imports);
            ``(3) require that safeguards be in place to ensure that 
        each prescription drug imported under the regulations complies 
        with section 505 (including with respect to being safe and 
        effective for the intended use of the prescription drug), with 
        sections 501 and 502, and with other applicable requirements of 
        this Act;
            ``(4) require that an importer of a prescription drug under 
        the regulations comply with subsections (d)(1) and (e); and
            ``(5) contain any additional provisions determined by the 
        Secretary to be appropriate as a safeguard to protect the 
        public health or as a means to facilitate the importation of 
        prescription drugs.
    ``(d) Information and Records.--
            ``(1) In general.--The regulations under subsection (b) 
        shall require an importer of a prescription drug under 
        subsection (b) to submit to the Secretary the following 
        information and documentation:
                    ``(A) The name and quantity of the active 
                ingredient of the prescription drug.
                    ``(B) A description of the dosage form of the 
                prescription drug.
                    ``(C) The date on which the prescription drug is 
                shipped.
                    ``(D) The quantity of the prescription drug that is 
                shipped.
                    ``(E) The point of origin and destination of the 
                prescription drug.
                    ``(F) The price paid by the importer for the 
                prescription drug.
                    ``(G) Documentation from the foreign seller 
                specifying--
                            ``(i) the original source of the 
                        prescription drug; and
                            ``(ii) the quantity of each lot of the 
                        prescription drug originally received by the 
                        seller from that source.
                    ``(H) The lot or control number assigned to the 
                prescription drug by the manufacturer of the 
                prescription drug.
                    ``(I) The name, address, telephone number, and 
                professional license number (if any) of the importer.
                    ``(J)(i) In the case of a prescription drug that is 
                shipped directly from the first foreign recipient of 
                the prescription drug from the manufacturer:
                            ``(I) Documentation demonstrating that the 
                        prescription drug was received by the recipient 
                        from the manufacturer and subsequently shipped 
                        by the first foreign recipient to the importer.
                            ``(II) Documentation of the quantity of 
                        each lot of the prescription drug received by 
                        the first foreign recipient demonstrating that 
                        the quantity being imported into the United 
                        States is not more than the quantity that was 
                        received by the first foreign recipient.
                            ``(III)(aa) In the case of an initial 
                        imported shipment, documentation demonstrating 
                        that each batch of the prescription drug in the 
                        shipment was statistically sampled and tested 
                        for authenticity and degradation.
                            ``(bb) In the case of any subsequent 
                        shipment, documentation demonstrating that a 
                        statistically valid sample of the shipment was 
                        tested for authenticity and degradation.
                    ``(ii) In the case of a prescription drug that is 
                not shipped directly from the first foreign recipient 
                of the prescription drug from the manufacturer, 
                documentation demonstrating that each batch in each 
                shipment offered for importation into the United States 
                was statistically sampled and tested for authenticity 
                and degradation.
                    ``(K) Certification from the importer or 
                manufacturer of the prescription drug that the 
                prescription drug--
                            ``(i) is approved for marketing in the 
                        United States; and
                            ``(ii) meets all labeling requirements 
                        under this Act.
                    ``(L) Laboratory records, including complete data 
                derived from all tests necessary to ensure that the 
                prescription drug is in compliance with established 
                specifications and standards.
                    ``(M) Documentation demonstrating that the testing 
                required by subparagraphs (J) and (L) was conducted at 
                a qualifying laboratory.
                    ``(N) Any other information that the Secretary 
                determines is necessary to ensure the protection of the 
                public health.
            ``(2) Maintenance by the secretary.--The Secretary shall 
        maintain information and documentation submitted under 
        paragraph (1) for such period of time as the Secretary 
        determines to be necessary.
    ``(e) Testing.--The regulations under subsection (b) shall 
require--
            ``(1) that testing described in subparagraphs (J) and (L) 
        of subsection (d)(1) be conducted by the importer or by the 
        manufacturer of the prescription drug at a qualified 
        laboratory;
            ``(2) if the tests are conducted by the importer--
                    ``(A) that information needed to--
                            ``(i) authenticate the prescription drug 
                        being tested; and
                            ``(ii) confirm that the labeling of the 
                        prescription drug complies with labeling 
                        requirements under this Act;
                be supplied by the manufacturer of the prescription 
                drug to the pharmacist or wholesaler; and
                    ``(B) that the information supplied under 
                subparagraph (A) be kept in strict confidence and used 
                only for purposes of testing or otherwise complying 
                with this Act; and
            ``(3) may include such additional provisions as the 
        Secretary determines to be appropriate to provide for the 
        protection of trade secrets and commercial or financial 
        information that is privileged or confidential.
    ``(f) Suspension of Importation.--The Secretary shall require that 
importations of a specific prescription drug or importations by a 
specific importer or from a specific Canadian exporter under subsection 
(b) be immediately suspended on discovery of a pattern of 
importation of that specific prescription drug or by that specific 
importer or Canadian exporter of drugs that are counterfeit or in 
violation of any requirement under this section, until an investigation 
is completed and the Secretary determines that the public is adequately 
protected from counterfeit and violative prescription drugs being 
imported under subsection (b).
    ``(g) Approved Labeling.--The manufacturer of a prescription drug 
shall provide an importer written authorization for the importer to 
use, at no cost, the approved labeling for the prescription drug.
    ``(h) Prohibition of Discrimination.--
            ``(1) In general.--It shall be unlawful for a manufacturer 
        of a prescription drug to discriminate against, or cause any 
        other person to discriminate against, a pharmacist, wholesaler, 
        or Canadian exporter that purchases or offers to purchase a 
        prescription drug from the manufacturer or from any person that 
        distributes a prescription drug manufactured by the drug 
        manufacturer.
            ``(2) Discrimination.--For the purposes of paragraph (1), a 
        manufacturer of a prescription drug shall be considered to 
        discriminate against a pharmacist, wholesaler, or Canadian 
        exporter if the manufacturer enters into a contract for sale of 
        a prescription drug, places a limit on supply, or employs any 
        other measure, that has the effect of--
                    ``(A) providing pharmacists, wholesalers, or 
                Canadian exporters access to prescription drugs on 
                terms or conditions that are less favorable than the 
                terms or conditions provided to a foreign purchaser 
                (other than a charitable or humanitarian organization) 
                of the prescription drug; or
                    ``(B) restricting the access of pharmacists, 
                wholesalers, or Canadian exporters to a prescription 
                drug that is permitted to be imported into the United 
                States under this section.
    ``(i) Charitable Contributions.--Notwithstanding any other 
provision of this section, section 801(d)(1) continues to apply to a 
prescription drug that is donated or otherwise supplied at no charge by 
the manufacturer of the drug to a charitable or humanitarian 
organization (including the United Nations and affiliates) or to a 
government of a foreign country.
    ``(j) Waiver Authority for Importation by Individuals.--
            ``(1) Declarations.--Congress declares that in the 
        enforcement against individuals of the prohibition of 
        importation of prescription drugs and devices, the Secretary 
        should--
                    ``(A) focus enforcement on cases in which the 
                importation by an individual poses a significant threat 
                to public health; and
                    ``(B) exercise discretion to permit individuals to 
                make such importations in circumstances in which--
                            ``(i) the importation is clearly for 
                        personal use; and
                            ``(ii) the prescription drug or device 
                        imported does not appear to present an 
                        unreasonable risk to the individual.
            ``(2) Waiver authority.--
                    ``(A) In general.--The Secretary may grant to 
                individuals, by regulation or on a case-by-case basis, 
                a waiver of the prohibition of importation of a 
                prescription drug or device or class of prescription 
                drugs or devices, under such conditions as the 
                Secretary determines to be appropriate.
                    ``(B) Guidance on case-by-case waivers.--The 
                Secretary shall publish, and update as necessary, 
                guidance that accurately describes circumstances in 
                which the Secretary will consistently grant waivers on 
                a case-by-case basis under subparagraph (A), so that 
                individuals may know with the greatest practicable 
                degree of certainty whether a particular importation 
                for personal use will be permitted.
            ``(3) Drugs imported from canada.--In particular, the 
        Secretary shall by regulation grant individuals a waiver to 
        permit individuals to import into the United States a 
        prescription drug that--
                    ``(A) is imported from a licensed pharmacy for 
                personal use by an individual, not for resale, in 
                quantities that do not exceed a 90-day supply;
                    ``(B) is accompanied by a copy of a valid 
                prescription;
                    ``(C) is imported from Canada, from a Canadian 
                exporter registered with the Secretary;
                    ``(D) is a prescription drug approved by the 
                Secretary under chapter V;
                    ``(E) is in the form of a final finished dosage 
                that was manufactured in an establishment registered 
                under section 510; and
                    ``(F) is imported under such other conditions as 
                the Secretary determines to be necessary to ensure 
                public safety.
    ``(k) Studies; Reports.--
            ``(1) By the institute of medicine of the national academy 
        of sciences.--
                    ``(A) Study.--
                            ``(i) In general.--The Secretary shall 
                        request that the Institute of Medicine of the 
                        National Academy of Sciences conduct a study 
                        of--
                                    ``(I) importations of prescription 
                                drugs made under the regulations under 
                                subsection (b); and
                                    ``(II) information and 
                                documentation submitted under 
                                subsection (d).
                            ``(ii) Requirements.--In conducting the 
                        study, the Institute of Medicine shall--
                                    ``(I) evaluate the compliance of 
                                importers with the regulations under 
                                subsection (b);
                                    ``(II) compare the number of 
                                shipments under the regulations under 
                                subsection (b) during the study period 
                                that are determined to be counterfeit, 
                                misbranded, or adulterated, and compare 
                                that number with the number of 
                                shipments made during the study period 
                                within the United States that are 
                                determined to be counterfeit, 
                                misbranded, or adulterated; and
                                    ``(III) consult with the Secretary, 
                                the United States Trade Representative, 
                                and the Commissioner of Patents and 
                                Trademarks to evaluate the effect of 
                                importations under the regulations 
                                under subsection (b) on trade and 
                                patent rights under Federal law.
                    ``(B) Report.--Not later than 2 years after the 
                effective date of the regulations under subsection (b), 
                the Institute of Medicine shall submit to Congress a 
                report describing the findings of the study under 
                subparagraph (A).
            ``(2) By the comptroller general.--
                    ``(A) Study.--The Comptroller General of the United 
                States shall conduct a study to determine the effect of 
                this section on the price of prescription drugs sold to 
                consumers at retail.
                    ``(B) Report.--Not later than 18 months after the 
                effective date of the regulations under subsection (b), 
                the Comptroller General of the United States shall 
                submit to Congress a report describing the findings of 
                the study under subparagraph (A).
    ``(l) Construction.--Nothing in this section limits the authority 
of the Secretary relating to the importation of prescription drugs, 
other than with respect to section 801(d)(1) as provided in this 
section.
    ``(m) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.''.
    (b) Conforming Amendments.--The Federal Food, Drug, and Cosmetic 
Act is amended--
            (1) in section 301(aa) (21 U.S.C. 331(aa)), by striking 
        ``covered product in violation of section 804'' and inserting 
        ``prescription drug in violation of section 804''; and
            (2) in section 303(a)(6) (21 U.S.C. 333(a)(6), by striking 
        ``covered product pursuant to section 804(a)'' and inserting 
        ``prescription drug under section 804(b)''.

SEC. 302. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION DRUGS.

    Section 1860D-11 of the Social Security Act, as added by section 
101(a) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003, is amended by striking subsection (i) 
(relating to noninterference) and by inserting the following:
    ``(i) Authority to Negotiate Prices With Manufacturers.--In order 
to ensure that beneficiaries enrolled under prescription drug plans and 
MA-PD plans pay the lowest possible price, the Secretary shall have 
authority similar to that of other Federal entities that purchase 
prescription drugs in bulk to negotiate contracts with manufacturers of 
covered part D drugs, consistent with the requirements and in 
furtherance of the goals of providing quality care and containing costs 
under this part.''.

              TITLE IV--REPEAL OF HEALTH SAVINGS ACCOUNTS

SEC. 401. REPEAL OF HEALTH SAVINGS ACCOUNTS.

    Section 1201 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 is repealed and any provisions of law amended 
by such section are restored as if such section had not been enacted.
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