I 

108TH CONGRESS 

2D SESSION H. R. 4512 

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 

JUNE 3, 2004 

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, as 

11 added by section 101(a) of the Medicare Prescription 

12 Drug, Improvement, and Modernization Act of 2003 (Pub13 lic Law 108–173), is amended by striking subsection (i) 

14 (relating to noninterference) and by inserting the fol15 lowing: 

16 ‘‘(i) AUTHORITY TO NEGOTIATE PRICES WITH MAN17 UFACTURERS.—In order to ensure that beneficiaries en18 rolled under prescription drug plans, MA–PD plans, and 

19 qualified retiree prescription drug plans pay the lowest 

20 possible price, the Secretary shall have authority similar 

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

22 Defense, and the heads of other Federal agencies and de23 partments that purchase prescription drugs in bulk to ne24 gotiate contracts with manufacturers of covered part D 

25 drugs, consistent with the requirements and in further-
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1 ance of the goals of providing quality care and containing 

2 costs under this part.’’. 

3 SEC. 102. ELIMINATION OF GAP IN COVERAGE OF PRE4 SCRIPTION DRUG BENEFITS. 

5 (a) IN GENERAL.—Section 1860D–2(b) of the Social 

6 Security Act (42 U.S.C. 1395w–102(b)), as added by sec7 tion 101(a) of the Medicare Prescription Drug, Improve8 ment, and Modernization Act of 2003 (Public Law 108– 

9 173), is amended by striking paragraph (3) and inserting 

10 the following: 

11 ‘‘(3) Repealed.’’. 

12 (b) CONFORMING AMENDMENTS.— 

13 (1) Section 1860D–2 of the Social Security Act 

14 (42 U.S.C. 1395w–102) is amended— 

15 (A) in subsection (a)(2)(A)(i)(I), by strik16 ing ‘‘, or an increase in the initial coverage 

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

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

19 ‘‘and up to the initial coverage limit under 

20 paragraph (3)’’; 

21 (C) in subsection (b)(4)(C)(i)— 

22 (i) by striking the comma after ‘‘para23 graph (1)’’ and inserting ‘‘and’’; and 

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

25 which benefits are not provided because of 
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1 the application of the initial coverage limit 

2 described in paragraph (3)’’; 

3 (D) in subsection (c)(1), by striking sub4 paragraph (C); and 

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

6 an initial coverage limit (described in subsection 

7 (b)(3))’’. 

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

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

10 follows: 

11 ‘‘(B) when prescription drug benefits are 

12 provided under this part, a notice of the bene13 fits in relation to the annual out-of-pocket 

14 threshold for the current year.’’. 

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

16 U.S.C. 1395w–114(a)) is amended— 

17 (i) in paragraph (1), by striking subpara18 graph (C) and redesignating subparagraphs (D) 

19 and (E) as subparagraphs (C) and (D), respec20 tively; 

21 (ii) in paragraph (2), by striking subpara22 graph (C) and redesignating subparagraphs (D) 

23 and (E) as subparagraphs (C) and (D), respec24 tively; and 
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1 (iii) in paragraph (4)(A) in the matter pre2 ceding clause (i), by striking ‘‘paragraph 

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

4 (1)(C)(ii)’’. 

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

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

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

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

9 (a)(2)(D)’’. 

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

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

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

13 ‘‘paragraphs (1)(C) and (2)(D)’’. 

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

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

16 paragraph (6) and redesignating paragraphs (7) 

17 through (18) as paragraphs (6) through (17), re18 spectively. 

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

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

21 ‘‘1860D–41(a)(14)’’ and inserting ‘‘1860D– 

22 41(a)(13)’’. 

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

24 this section shall take effect as if included in the enact-
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1 ment of the Medicare Prescription Drug, Improvement, 

2 and Modernization Act of 2003 (Public law 108–173). 

3 TITLE II—IMPORTATION OF 

4 PRESCRIPTION DRUGS 

5 SEC. 201. SHORT TITLE. 

6 This title may be cited as the ‘‘Pharmaceutical Mar7 ket Access Act of 2004’’. 

8 SEC. 202. IMPORTATION OF PRESCRIPTION DRUGS. 

9 (a) NULLIFICATION OF CERTAIN AMENDMENTS

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

11 Drug, and Cosmetic Act is amended— 

12 (1) in section 804 (21 U.S.C. 384), by amend13 ing the section to read as if section 1121(a) of Pub14 lic Law 108–173 had not been enacted; 

15 (2) in section 301 (21 U.S.C. 331), by amend16 ing the section to read as if section 1121(b)(1) of 

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

18 (3) in section 303 (21 U.S.C. 333), by amend19 ing the section to read as if section 1121(b)(2) of 

20 Public Law 108–173 had not been enacted. 

21 (b) IMPORTATION OF PRESCRIPTION DRUGS.—Sec22 tion 804 of the Federal Food, Drug, and Cosmetic Act 

23 (21 U.S.C. 384), as amended by subsection (a)(1) of this 

24 section, is amended— 

25 (1) in subsection (a)— 
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1 (A) by striking ‘‘The Secretary’’ and in2 serting ‘‘Not later than 180 days after the date 

3 of the enactment of the Pharmaceutical Market 

4 Access Act of 2003, the Secretary’’; and 

5 (B) by striking ‘‘pharmacists and whole6 salers’’ and inserting ‘‘pharmacists, wholesalers, 

7 and qualifying individuals’’; 

8 (2) in subsection (b)— 

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

10 follows: 

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

12 pursuant to such subsection complies with sections 

13 501, 502, and 505, and other applicable require14 ments of this Act; and’’; 

15 (B) in paragraph (2), by striking ‘‘, includ16 ing subsection (d); and’’ and inserting a period; 

17 and 

18 (C) by striking paragraph (3); 

19 (3) in subsection (c), by inserting ‘‘by phar20 macists and wholesalers (but not qualifying individ21 uals)’’ after ‘‘importation of covered products’’; 

22 (4) in subsection (d)— 

23 (A) by striking paragraphs (3) and (10); 
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1 (B) in paragraph (5), by striking ‘‘, includ2 ing the professional license number of the im3 porter, if any’’; 

4 (C) in paragraph (6)— 

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

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

7 the period; 

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

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

10 the period; and 

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

12 ‘‘labeling’’; 

13 (D) in paragraph (7)— 

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

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

16 the period; and 

17 (ii) by amending subparagraph (B) to 

18 read as follows: 

19 ‘‘(B) Certification from the importer or 

20 manufacturer of such product that the product 

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

22 (E) by redesignating paragraphs (4) 

23 through (9) as paragraphs (3) through (8), re24 spectively; 
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1 (5) by amending subsection (e) to read as fol2 lows: 

3 ‘‘(e) TESTING.— 

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

5 regulations under subsection (a) shall require that 

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

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

8 covered product, unless the covered product is a pre9 scription drug subject to the requirements of section 

10 505C for counterfeit-resistant technologies. 

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

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

13 not apply to an importer unless the importer is a 

14 wholesaler.’’; 

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

16 by the Secretary, subject to such limitations as the 

17 Secretary determines to be appropriate to protect 

18 the public health’’; 

19 (7) in subsection (g)— 

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

21 (B) by striking ‘‘and the Secretary deter22 mines that the public is adequately protected 

23 from counterfeit and violative covered products 

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

25 (8) in subsection (i)(1)— 
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1 (A) by amending subparagraph (A) to read 

2 as follows: 

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

4 conduct, or contract with an entity to conduct, 

5 a study on the imports permitted pursuant to 

6 subsection (a), including consideration of the 

7 information received under subsection (d). In 

8 conducting such study, the Secretary or entity 

9 shall evaluate the compliance of importers with 

10 regulations under subsection (a), and the inci11 dence of shipments pursuant to such sub12 section, if any, that have been determined to be 

13 misbranded or adulterated, and determine how 

14 such compliance contrasts with the incidence of 

15 shipments of prescription drugs transported 

16 within the United States that have been deter17 mined to be misbranded or adulterated.’’; and 

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

19 later than 2 years after the effective date of 

20 final regulations under subsection (a),’’ and in21 serting ‘‘Not later than 18 months after the 

22 date of the enactment of the Pharmaceutical 

23 Market Access Act of 2003,’’; 

24 (9) in subsection (k)(2)— 
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1 (A) by redesignating subparagraphs (D) 

2 and (E) as subparagraphs (E) and (F), respec3 tively; and 

4 (B) by inserting after subparagraph (C) 

5 the following: 

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

7 means an individual who is not a pharmacist or 

8 a wholesaler.’’; and 

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

10 SEC. 203. USE OF COUNTERFEIT-RESISTANT TECH11 NOLOGIES TO PREVENT COUNTERFEITING. 

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

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

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

15 at the end the following: 

16 ‘‘(w) If it is a drug subject to section 503(b), unless 

17 the packaging of such drug complies with the require18 ments of section 505C for counterfeit-resistant tech19 nologies.’’. 

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

21 Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend22 ed by inserting after section 505B the following: 

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

24 ‘‘(a) INCORPORATION OF COUNTERFEIT-RESISTANT

25 TECHNOLOGIES INTO PRESCRIPTION DRUG PACK-
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1 AGING.—The Secretary shall require that the packaging 

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

3 ‘‘(1) overt optically variable counterfeit-resist4 ant technologies that are described in subsection (b) 

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

6 ‘‘(2) technologies that have an equivalent func7 tion of security, as determined by the Secretary. 

8 ‘‘(b) ELIGIBLE TECHNOLOGIES.—Technologies de9 scribed in this subsection— 

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

11 for visual identification of product authenticity with12 out the need for readers, microscopes, lighting de13 vices, or scanners; 

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

15 of Engraving and Printing to secure United States 

16 currency; 

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

18 highly secure, tightly controlled environment; and 

19 ‘‘(4) should incorporate additional layers of 

20 non-visible covert security features up to and includ21 ing forensic capability. 

22 ‘‘(c) STANDARDS FOR PACKAGING.— 

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

24 of making it more difficult to counterfeit the pack25 aging of drugs subject to section 503(b), manufac-
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1 turers of the drugs shall incorporate the technologies 

2 described in subsection (b) into multiple elements of 

3 the physical packaging of the drugs, including blister 

4 packs, shrink wrap, package labels, package seals, 

5 bottles, and boxes. 

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

7 Shipments of drugs described in subsection (a) shall 

8 include a label on the shipping container that incor9 porates the technologies described in subsection (b), 

10 so that officials inspecting the packages will be able 

11 to determine the authenticity of the shipment. Chain 

12 of custody procedures shall apply to such labels and 

13 shall include procedures applicable to contractual 

14 agreements for the use and distribution of the labels, 

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

16 access for the relevant governmental agencies for 

17 audit or verification of the use and distribution of 

18 the labels.’’. 

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