II 

Calendar No. 90 

109TH CONGRESS 

1ST SESSION S. 873 

To amend title XVIII of the Social Security Act to deliver a meaningful 

benefit and lower prescription drug prices under the medicare program. 

IN THE SENATE OF THE UNITED STATES 

APRIL 21, 2005 

Mr. DURBIN introduced the following bill; which was read the first time 

APRIL 22, 2005 

Read the second time and placed on the calendar 

A BILL

To amend title XVIII of the Social Security Act to deliver 

a meaningful benefit and lower prescription drug prices 

under the medicare program.

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 Prescription 

5 Drug Savings and Choice Act of 2005’’. 
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1 SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRE2 SCRIPTION DRUG PLAN OPTION. 

3 (a) IN GENERAL.—Subpart 2 of part D of the Social 

4 Security Act is amended by inserting after section 1860D–

5 11 the following new section: 

6 ‘‘MEDICARE OPERATED PRESCRIPTION DRUG PLAN

7 OPTION

8 ‘‘SEC. 1860D–11A. (a) IN GENERAL.—Notwith9 standing any other provision of this part, for each year 

10 (beginning with 2006), in addition to any plans offered 

11 under section 1860D–11, the Secretary shall offer one or 

12 more medicare operated prescription drug plans (as de13 fined in subsection (c)) with a service area that consists 

14 of the entire United States and shall enter into negotia15 tions with pharmaceutical manufacturers to reduce the 

16 purchase cost of covered part D drugs for eligible part 

17 D individuals in accordance with subsection (b). 

18 ‘‘(b) NEGOTIATIONS.—Notwithstanding section 

19 1860D–11(i), for purposes of offering a medicare operated 

20 prescription drug plan under this section, the Secretary 

21 shall negotiate with pharmaceutical manufacturers with 

22 respect to the purchase price of covered part D drugs and 

23 shall encourage the use of more affordable therapeutic 

24 equivalents to the extent such practices do not override 

25 medical necessity as determined by the prescribing physi26 cian. To the extent practicable and consistent with the 
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1 previous sentence, the Secretary shall implement strate2 gies similar to those used by other Federal purchasers of 

3 prescription drugs, and other strategies, to reduce the pur4 chase cost of covered part D drugs. 

5 ‘‘(c) MEDICARE OPERATED PRESCRIPTION DRUG

6 PLAN DEFINED.—For purposes of this part, the term 

7 ‘medicare operated prescription drug plan’ means a pre8 scription drug plan that offers qualified prescription drug 

9 coverage and access to negotiated prices described in sec10 tion 1860D–2(a)(1)(A). Such a plan may offer supple11 mental prescription drug coverage in the same manner as 

12 other qualified prescription drug coverage offered by other 

13 prescription drug plans. 

14 ‘‘(d) MONTHLY BENEFICIARY PREMIUM.— 

15 ‘‘(1) QUALIFIED PRESCRIPTION DRUG COV16 ERAGE.—The monthly beneficiary premium for 

17 qualified prescription drug coverage and access to 

18 negotiated prices described in section 1860D–

19 2(a)(1)(A) to be charged under a medicare operated 

20 prescription drug plan shall be uniform nationally. 

21 Such premium for months in 2006 shall be $35 and 

22 for months in succeeding years shall be based on the 

23 average monthly per capita actuarial cost of offering 

24 the medicare operated prescription drug plan for the 

25 year involved, including administrative expenses. 
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1 ‘‘(2) SUPPLEMENTAL PRESCRIPTION DRUG COV2 ERAGE.—Insofar as a medicare operated prescrip3 tion drug plan offers supplemental prescription drug 

4 coverage, the Secretary may adjust the amount of 

5 the premium charged under paragraph (1). 

6 ‘‘(3) REQUIREMENT FOR AT LEAST ONE PLAN

7 WITH A $35 PREMIUM IN 2006.—The Secretary shall 

8 ensure that at least one medicare operated prescrip9 tion drug plan offered in 2006 has a monthly pre10 mium of $35.’’. 

11 (b) CONFORMING AMENDMENTS.— 

12 (1) Section 1860D–3(a) of the Social Security 

13 Act (42 U.S.C. 1395w–103(a)) is amended by add14 ing at the end the following new paragraph: 

15 ‘‘(4) AVAILABILITY OF THE MEDICARE OPER16 ATED PRESCRIPTION DRUG PLAN.— 

17 ‘‘(A) IN GENERAL.—A medicare operated 

18 prescription drug plan (as defined in section 

19 1860D–11A(c)) shall be offered nationally in 

20 accordance with section 1860D–11A. 

21 ‘‘(B) RELATIONSHIP TO OTHER PLANS.— 

22 ‘‘(i) IN GENERAL.—Subject to clause 

23 (ii), a medicare operated prescription drug 

24 plan shall be offered in addition to any 

25 qualifying plan or fallback prescription 
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1 drug plan offered in a PDP region and 

2 shall not be considered to be such a plan 

3 for purposes of meeting the requirements 

4 of this subsection. 

5 ‘‘(ii) DESIGNATION AS A FALLBACK

6 PLAN.—Notwithstanding any other provi7 sion of this part, the Secretary may des8 ignate the medicare operated prescription 

9 drug plan as the fallback prescription drug 

10 plan for any fallback service area (as de11 fined in section 1860D–11(g)(3)) deter12 mined to be appropriate by the Sec13 retary.’’. 

14 (2) Section 1860D–13(c)(3) of such Act (42 

15 U.S.C. 1395w–113(c)(3)) is amended— 

16 (A) in the heading, by inserting ‘‘and 

17 medicare operated prescription drug plans’’ 

18 after ‘‘Fallback plans’’; and 

19 (B) by inserting ‘‘or a medicare operated 

20 prescription drug plan’’ after ‘‘a fallback pre21 scription drug plan’’. 

22 (3) Section 1860D–16(b)(1) of such Act (42 

23 U.S.C. 1395w–116(b)(1)) is amended— 

24 (A) in subparagraph (C), by striking 

25 ‘‘and’’ after the semicolon at the end; 
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1 (B) in subparagraph (D), by striking the 

2 period at the end and inserting ‘‘; and’’; and 

3 (C) by adding at the end the following new 

4 subparagraph: 

5 ‘‘(E) payments for expenses incurred with 

6 respect to the operation of medicare operated 

7 prescription drug plans under section 1860D–

8 11A.’’. 

9 (4) Section 1860D–41(a) of such Act (42 

10 U.S.C. 141(a)) is amended by adding at the end the 

11 following new paragraph: 

12 ‘‘(19) MEDICARE OPERATED PRESCRIPTION

13 DRUG PLAN.—The term ‘medicare operated prescrip14 tion drug plan’ has the meaning given such term in 

15 section 1860D–11A(c).’’. 

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

17 this section shall take effect as if included in the enact18 ment of section 101 of the Medicare Prescription Drug, 

19 Improvement, and Modernization Act of 2003 (Public Law 

20 108–173; 117 Stat. 2071). 

Calendar No. 90 

109TH CONGRESS 

1ST SESSION S. 873 

A BILL

To amend title XVIII of the Social Security Act to 

tion drug prices under the medicare program. deliver a meaningful benefit and lower prescripAPRIL 22, 2005 

Read the second time and placed on the calendar