II 

108TH CONGRESS 

1ST SESSION S. 1974

To make improvements to the Medicare Prescription Drug, Improvement, 

and Modernization Act of 2003. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 25, 2003

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

to the Committee on Finance 

A BILL

To make improvements to the Medicare Prescription Drug, 

Improvement, and Modernization Act of 2003.

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 ‘‘Medicare Preservation 

5 and Drug Price Fairness Act’’. 

6 SEC. 2. AUTHORITY TO NEGOTIATE PRICES. 

7 Subsection (i) of section 1860D–11, as added by sec8 tion 101 of the Medicare Prescription Drug, Improvement, 

9 and Modernization Act of 2003, is repealed. 
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1 SEC. 3. REPEAL OF COMPARATIVE COST ADJUSTMENT 

2 (CCA) PROGRAM. 

3 Subtitle E of title II of the Medicare Prescription 

4 Drug, Improvement, and Modernization Act of 2003, and 

5 the amendments made by such subtitle, are repealed. 

6 SEC. 4. PHARMACEUTICAL MARKET ACCESS. 

7 (a) IMPORTATION OF PRESCRIPTION DRUGS.—Sec8 tion 804 of the Federal Food, Drug, and Cosmetic Act 

9 (21 U.S.C. 384) is amended—

10 (1) in subsection (a)—

11 (A) by striking ‘‘The Secretary’’ and in12 serting ‘‘Not later than 180 days after the date 

13 of the enactment of the Medicare Prescription 

14 Drug, Improvement, and Modernization Act of 

15 2003, the Secretary’’; and 

16 (B) by striking ‘‘pharmacists and whole17 salers’’ and inserting ‘‘pharmacists, wholesalers, 

18 and qualifying individuals’’; 

19 (2) in subsection (b)—

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

21 follows: 

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

23 pursuant to such subsection complies with sections 

24 501, 502, and 505, and other applicable require25 ments of this Act; and’’; 
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1 (B) in paragraph (2), by striking ‘‘, includ2 ing subsection (d); and’’ and inserting a period; 

3 and 

4 (C) by striking paragraph (3); 

5 (3) in subsection (c), by inserting ‘‘by phar6 macists and wholesalers (but not qualifying individ7 uals)’’ after ‘‘importation of covered products’’; 

8 (4) in subsection (d)—

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

10 (B) in paragraph (5), by striking ‘‘, includ11 ing the professional license number of the im12 porter, if any’’; 

13 (C) in paragraph (6)—

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

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

16 the period; 

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

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

19 the period; and 

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

21 ‘‘labeling’’; 

22 (D) in paragraph (7)—

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

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

25 the period; and 
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1 (ii) by amending subparagraph (B) to 

2 read as follows: 

3 ‘‘(B) Certification from the importer or 

4 manufacturer of such product that the product 

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

6 (E) by redesignating paragraphs (4) 

7 through (9) as paragraphs (3) through (8), re8 spectively; 

9 (5) by amending subsection (e) to read as fol10 lows: 

11 ‘‘(e) TESTING.—

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

13 regulations under subsection (a) shall require that 

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

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

16 covered product, unless the covered product is a pre17 scription drug subject to the requirements of section 

18 505B for counterfeit-resistant technologies. 

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

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

21 not apply to an importer unless the importer is a 

22 wholesaler.’’; 

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

24 by the Secretary, subject to such limitations as the 
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1 Secretary determines to be appropriate to protect 

2 the public health’’; 

3 (7) in subsection (g)—

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

5 (B) by striking ‘‘and the Secretary deter6 mines that the public is adequately protected 

7 from counterfeit and violative covered products 

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

9 (8) in subsection (i)(1)—

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

11 as follows: 

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

13 conduct, or contract with an entity to conduct, 

14 a study on the imports permitted pursuant to 

15 subsection (a), including consideration of the 

16 information received under subsection (d). In 

17 conducting such study, the Secretary or entity 

18 shall evaluate the compliance of importers with 

19 regulations under subsection (a), and the inci20 dence of shipments pursuant to such sub21 section, if any, that have been determined to be 

22 misbranded or adulterated, and determine how 

23 such compliance contrasts with the incidence of 

24 shipments of prescription drugs transported
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1 within the United States that have been deter2 mined to be misbranded or adulterated.’’; and 

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

4 later than 2 years after the effective date of 

5 final regulations under subsection (a),’’ and in6 serting ‘‘Not later than 18 months after the 

7 date of the enactment of the Medicare Prescrip8 tion Drug, Improvement, and Modernization 

9 Act of 2003,’’; 

10 (9) in subsection (k)(2)—

11 (A) by redesignating subparagraphs (D) 

12 and (E) as subparagraphs (E) and (F), respec13 tively; and 

14 (B) by inserting after subparagraph (C) 

15 the following: 

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

17 means an individual who is not a pharmacist or 

18 a wholesaler. ’’; and 

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

20 (b) USE OF COUNTERFEIT-RESISTANT TECH21 NOLOGIES TO PREVENT COUNTERFEITING.— 

22 (1) MISBRANDING.—Section 502 of the Federal 

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

24 deeming drugs and devices to be misbranded) is 

25 amended by adding at the end the following: 
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1 ‘‘(w) If it is a drug subject to section 503(b), unless 

2 the packaging of such drug complies with the require3 ments of section 505B for counterfeit-resistant tech4 nologies.’’. 

5 (2) REQUIREMENTS.—Title V of the Federal 

6 Food, Drug, and Cosmetic Act (21 U.S.C. 351 et 

7 seq.) is amended by inserting after section 505A the 

8 following: 

9 ‘‘SEC. 505B. COUNTERFEIT-RESISTANT TECHNOLOGIES. 

10 ‘‘(a) INCORPORATION OF COUNTERFEIT-RESISTANT

11 TECHNOLOGIES INTO PRESCRIPTION DRUG PACK12 AGING.—The Secretary shall require that the packaging 

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

14 ‘‘(1) overt optically variable counterfeit-resist15 ant technologies that are described in subsection (b) 

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

17 ‘‘(2) technologies that have an equivalent func18 tion of security, as determined by the Secretary. 

19 ‘‘(b) ELIGIBLE TECHNOLOGIES.—Technologies de20 scribed in this subsection—

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

22 for visual identification of product authenticity with23 out the need for readers, microscopes, lighting de24 vices, or scanners; 
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1 ‘‘(2) shall be similar to that used by the Bureau 

2 of Engraving and Printing to secure United States 

3 currency; 

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

5 highly secure, tightly controlled environment; and 

6 ‘‘(4) should incorporate additional layers of 

7 non-visible covert security features up to and includ8 ing forensic capability. 

9 ‘‘(c) STANDARDS FOR PACKAGING.—

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

11 of making it more difficult to counterfeit the pack12 aging of drugs subject to section 503(b), manufac13 turers of the drugs shall incorporate the technologies 

14 described in subsection (b) into multiple elements of 

15 the physical packaging of the drugs, including blister 

16 packs, shrink wrap, package labels, package seals, 

17 bottles, and boxes. 

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

19 Shipments of drugs described in subsection (a) shall 

20 include a label on the shipping container that incor21 porates the technologies described in subsection (b), 

22 so that officials inspecting the packages will be able 

23 to determine the authenticity of the shipment. Chain 

24 of custody procedures shall apply to such labels and 

25 shall include procedures applicable to contractual 
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1 agreements for the use and distribution of the labels, 

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

3 access for the relevant governmental agencies for 

4 audit or verification of the use and distribution of 

5 the labels.’’. 

6 (c) REPEAL.—Subtitle C of title XI of the Medicare 

7 Prescription Drug, Improvement, and Modernization Act 

8 of 2003, and the amendments made by such subtitle, are 

9 repealed. 

10 SEC. 5. ASSURING ACCESS TO COVERAGE. 

11 Paragraph (3) of section 1860D–3(a), as added by 

12 section 101 of the Medicare Prescription Drug, Improve13 ment, and Modernization Act of 2003, is amended to read 

14 as follows: 

15 ‘‘(3) QUALIFYING PLAN DEFINED.—For pur16 poses of this section, the term ‘qualifying plan’ 

17 means a prescription drug plan offered by a PDP 

18 sponsor.’’. 

19 SEC. 6. REPEAL OF MA REGIONAL PLAN STABILIZATION 

20 FUND. 

21 (a) IN GENERAL.—Section 1858 of the Social Secu22 rity Act, as added by section 221(c) of the Medicare Pre23 scription Drug, Improvement, and Modernization Act of 

24 2003, is amended—

25 (1) by striking subsection (e); 
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1 (2) by redesignating subsections (f), (g), and 

2 (h) as subsections (e), (f), and (g), respectively; and 

3 (3) in subsection (e), as so redesignated, by 

4 striking ‘‘subject to subsection (e),’’. 

5 (b) CONFORMING AMENDMENT.—Section 1851(i)(2) 

6 of the Social Security Act (42 U.S.C. 1395w–21(i)(2)), as 

7 amended by section 221(d)(5) of the Medicare Prescrip8 tion Drug, Improvement, and Modernization Act of 2003, 

9 is amended by striking ‘‘1858(h)’’ and inserting 

10 ‘‘1858(g)’’. 

11 SEC. 7. REPEAL OF HEALTH SAVINGS ACCOUNTS. 

12 Section 1201 of the Medicare Prescription Drug, Im13 provement, and Modernization Act of 2003, and the 

14 amendments made by such section, are repealed. 

15 SEC. 8. EFFECTIVE DATE. 

16 (a) IN GENERAL.—The amendments made by this 

17 Act shall take effect as if included in the enactment of 

18 the Medicare Prescription Drug, Improvement, and Mod19 ernization Act of 2003. 

20 (b) APPLICATION OF LAWS.—If any amendment to 

21 any provision of any Act is repealed by this Act, such pro22 vision shall be applied and administered as if the amend23 ment had never been enacted.

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