Prescription Drug and Health Improvement Act of 2016

To amend part D of title XVIII of the Social Security Act to require the Secretary of Health and Human Services to negotiate for lower prices for Medicare prescription drugs. 1. Short title This Act may be cited as the Prescription Drug and Health Improvement Act of 2016 2. Negotiating fair prices for Medicare prescription drugs (a) Negotiating fair prices (1) In general Section 1860D–11 of the Social Security Act 42 U.S.C. 1395w–111 (i) Negotiating fair prices with manufacturers (1) In general Notwithstanding any other provision of law, in furtherance of the goals of providing quality care and containing costs under this part, the Secretary shall, with respect to applicable covered part D drugs, and may, with respect to other covered part D drugs, negotiate, as appropriate (in a manner which may be similar to Federal entities), with pharmaceutical manufacturers the prices (which may include discounts, rebates, and other price concessions) that may be charged to PDP sponsors and MA organizations for such drugs for part D eligible individuals who are enrolled in a prescription drug plan or in an MA–PD plan. (2) Applicable covered part D drug defined For purposes of this subsection, the term applicable covered part D drug (A) Spending on a per beneficiary basis. (B) Spending under this title. (C) Unit cost increases over the preceding years. (D) Initial launch price. (E) Any other criteria determined by the Secretary. . (2) Effective date The amendment made by paragraph (1) shall take effect on the date of the enactment of this Act and shall first apply to negotiations and prices for plan years beginning on January 1, 2018. (b) Biannual reports to Congress (1) In general Not later than 3 years after the date of the enactment of this Act, and every 6 months thereafter, the Secretary of Health and Human Services shall submit to Congress a report on the following: (A) The negotiations conducted by the Secretary under section 1860D–11(i) of the Social Security Act ( 42 U.S.C. 1395w–111(i) Social Security Act 42 U.S.C. 1395w–102(e) (B) Data on spending under part D of the Medicare program on covered part D drugs, including data on covered part D drugs with— (i) high spending on a per beneficiary basis; (ii) high spending for the program overall; and (iii) high unit cost increases over the past five years. (C) A list of the covered part D drugs with no therapeutic substitute and data on spending under part D of the Medicare program on such drugs. (2) Public availability of report The Secretary of Health and Human Services shall publish on the Internet website of the Centers for Medicare & Medicaid Services a copy of each report submitted under paragraph (1).

Summary: Prescription Drug and Health Improvement Act of 2016 This bill amends title XVIII (Medicare) of the Social Security Act to require the Centers for Medicare & Medicaid Services (CMS) to negotiate lower prices on behalf of Medicare and Medicare Advantage (MA) beneficiaries for covered prescription drugs that CMS deems appropriate for negotiation based on: (1) program and per-beneficiary spending, (2) unit cost increases over the preceding years, (3) initial launch price, and (4) any other criteria determined by CMS. CMS may negotiate lower prices on behalf of Medicare and MA beneficiaries for other covered prescription drugs, as well.