I

105TH CONGRESS

2D SESSION H. R. 4794

To provide for substantial reductions in the price of prescription drugs for

Medicare beneficiaries.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 10, 1998

Mr. CRAMER introduced the following bill; which was referred to the Committee on 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 provide for substantial reductions in the price of

prescription drugs for Medicare beneficiaries.

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 ‘‘Fairness in Prescrip5 tion Drug Prices Act’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—The Congress finds the following:
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1 (1) Senior citizens are the major consumers of

2 prescription drugs in the United States and are pay3 ing the highest prices for prescription drugs.

4 (2) The discriminatory pricing practices of

5 major drug manufacturers results in senior citizens

6 paying over twice the price that drug manufacturers

7 charge their most-favored customers, such as Health

8 Maintenance Organizations (HMOs) and hospital

9 chains.

10 (3) Medicare beneficiaries without prescription

11 drug coverage represent the most vulnerable seg12 ment of prescription drug customers. Making pre13 scription drugs available to them at lower prices

14 would lower the health care costs for this population,

15 improve the health and well-being of this population

16 and consequently, lower the cost to the taxpayers of

17 the Medicare program.

18 (4) Authorizing the wholesale purchase of pre19 scription drugs at the Federal Supply Schedule

20 prices plus administrative costs will result in a bene21 fit to the Medicare population without cost to the

22 taxpayers.

23 (5) Authorizing similar benefits through hospice

24 programs will assist in extending the benefits of
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1 lower prescription drug prices to those with terminal

2 illnesses.

3 (b) PURPOSE.—The purpose of this Act is to protect

4 Medicare beneficiaries from discriminatory pricing by drug

5 manufacturers and to make prescription drugs available

6 to Medicare beneficiaries at substantially reduced prices,

7 by allowing pharmacies to purchase drugs for Medicare

8 beneficiaries at the substantially reduced price available

9 under the Federal Supply Schedule.

10 SEC. 3. PARTICIPATING PHARMACIES.

11 (a) AGREEMENTS TO PARTICIPATE.—Any qualified

12 pharmacy may enter into an agreement with the Secretary

13 that enables the pharmacy to sell covered outpatient drugs

14 to Medicare beneficiaries at a reduced price, by authoriz15 ing the pharmacy to operate as a participating pharmacy

16 under this Act.

17 (b) RIGHT OF PARTICIPATING PHARMACIES TO OB18 TAIN DRUGS.—An agreement under this section shall enti19 tle the participating pharmacy to purchase any covered

20 outpatient drug that is listed on the Federal Supply

21 Schedule of the General Services Administration at the

22 participating pharmacy discount price for that drug deter23 mined under subsection (d).

24 (c) QUANTITY OF DRUGS PURCHASED.—An agree25 ment under this section shall permit the participating
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1 pharmacy to purchase under this Act as much of a covered

2 outpatient drug as is sold by the pharmacy to Medicare

3 beneficiaries.

4 (d) PARTICIPATING PHARMACY DISCOUNT PRICE.—

5 (1) IN GENERAL.—The Secretary shall deter6 mine a participating pharmacy discount price for

7 each covered outpatient drug.

8 (2) DETERMINATION.—The participating phar9 macy discount price for a covered outpatient drug

10 shall be determined by adding—

11 (A) the price at which the drug is available

12 to Federal agencies from the Federal Supply

13 Schedule under section 8126 of title 38, United

14 States Code; plus

15 (B) an amount that reflects the adminis16 trative costs incurred by the Secretary in ad17 ministering this Act.

18 (e) SPECIAL RULE FOR MEDICARE BENEFICIARIES

19 ENROLLED IN A HOSPICE PROGRAM.—In the case of a

20 Medicare beneficiary who makes an election to receive hos21 pice care under section 1812(d)(1) of the Social Security

22 Act (42 U.S.C. 1395d(d)(1)) provided by, or under ar23 rangements made by, a particular hospice program under

24 part A of title XVIII of such Act, the hospice program

25 may enter into agreements with a participating pharmacy
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1 to procure for and deliver to such a Medicare beneficiary

2 covered outpatient drugs at a reduced price under this sec3 tion.

4 SEC. 4. ADMINISTRATION.

5 (a) IN GENERAL.—The Secretary shall administer

6 this Act in a manner that uses existing methods of obtain7 ing and distributing drugs to the maximum extent pos8 sible, consistent with efficiency and cost effectiveness.

9 (b) REGULATIONS.—The Secretary shall issue such

10 regulations as may be necessary to implement this Act.

11 SEC. 5. REPORTS TO CONGRESS REGARDING EFFECTIVE12 NESS OF ACT.

13 (a) IN GENERAL.—Not later than 2 years after the

14 date of the enactment of this Act, and annually thereafter,

15 the Secretary shall report to the Congress regarding the

16 effectiveness of this Act in—

17 (1) protecting Medicare beneficiaries from dis18 criminatory pricing by drug manufacturers; and

19 (2) making prescription drugs available to

20 Medicare beneficiaries at substantially reduced

21 prices.

22 (b) CONSULTATION.—In preparing such reports, the

23 Secretary shall consult with public health experts, affected

24 industries, organizations representing consumers and

25 older Americans, and other interested persons.
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1 (c) RECOMMENDATIONS.—The Secretary shall in2 clude in such reports any recommendations they consider

3 appropriate for changes in this Act to further reduce the

4 cost of covered outpatient drugs to Medicare beneficiaries.

5 SEC. 6. DEFINITIONS.

6 In this Act:

7 (1) COVERED OUTPATIENT DRUG.—The term

8 ‘‘covered outpatient drug’’ has the meaning given

9 that term in section 1927(k)(2) of the Social Secu10 rity Act (42 U.S.C. 1396r–8(k)(2)).

11 (2) MEDICARE BENEFICIARY.—The term

12 ‘‘Medicare beneficiary’’ means an individual entitled

13 to benefits under part A of title XVIII of the Social

14 Security Act or enrolled under part B of such title,

15 or both.

16 (3) SECRETARY.—The term ‘‘Secretary’’ means

17 the Secretary of Health and Human Services.

18 SEC. 7. EFFECTIVE DATE.

19 The Secretary shall implement this Act as expedi20 tiously as practicable and in a manner consistent with the

21 obligations of the United States.

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