pharmacists, and consumers and others with ex-
pertise in evaluating prescription drugs. The 
Secretary shall select members based on their 
knowledge of pharmaceuticals and the Medicare 
population. Members shall be deemed to be spe-
cial Government employees for purposes of ap-
plying the conflict of interest provisions under 
section 208 of title 18, United States Code, and 
no waiver of such provisions for such a member 
shall be permitted. 
‘‘(C) CONSULTATION.—The advisory com-
mittee shall consult, as necessary, with physi-
cians who are specialists in treating the disease 
for which a drug is being considered. 
‘‘(D) REQUEST FOR STUDIES.—The advi-
sory committee may request the Agency for 
Healthcare Research and Quality or an aca-
demic or research institution to study and make 
a report on a petition described in subpara-
graph (A)(ii) in order to assess— 
‘‘(i) clinical effectiveness; 
‘‘(ii) comparative effectiveness; 
‘‘(iii) safety; and 
‘‘(iv) enhanced compliance with a 
drug regimen. 
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‘‘(E) RECOMMENDATIONS.—The advisory 
committee shall make recommendations to the 
Secretary regarding— 
‘‘(i) whether a covered part D drug is 
found to provide a greater clinical benefit, 
including fewer safety concerns or less risk 
of side-effects, than another drug in the 
same class that is currently included in the 
formulary and should be included in the 
formulary; 
‘‘(ii) whether a covered part D drug is 
found to provide less clinical benefit, in-
cluding greater safety concerns or a great-
er risk of side-effects, than another drug in 
the same class that is currently included in 
the formulary and should not be included 
in the formulary; and 
‘‘(iii) whether a covered part D drug 
has the same or similar clinical benefit to 
a drug in the same class that is currently 
included in the formulary and whether the 
drug should be included in the formulary. 
‘‘(F) LIMITATIONS ON REVIEW OF MANU-
FACTURER
PETITIONS.—The advisory com-
mittee shall not review a petition of a drug 
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manufacturer under subparagraph (A)(ii) with 
respect to a covered part D drug unless the pe-
tition is accompanied by the following: 
‘‘(i) Raw data from clinical trials on 
the safety and effectiveness of the drug. 
‘‘(ii) Any data from clinical trials con-
ducted using active controls on the drug or 
drugs that are the current standard of 
care. 
‘‘(iii) Any available data on compara-
tive effectiveness of the drug. 
‘‘(iv) Any other information the Sec-
retary requires for the advisory committee 
to complete its review. 
‘‘(G) RESPONSE TO RECOMMENDATIONS.— 
The Secretary shall review the recommenda-
tions of the advisory committee and if the Sec-
retary accepts such recommendations the Sec-
retary shall modify the formulary established 
under this subsection accordingly. Nothing in 
this section shall preclude the Secretary from 
adding to the formulary a drug for which the 
Director of the Agency for Healthcare Research 
and Quality or the advisory committee has not 
made a recommendation. 
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‘‘(H) NOTICE
OF
CHANGES.—The Sec-
retary shall provide timely notice to bene-
ficiaries and health professionals about changes 
to the formulary or formulary incentives. 
‘‘(f) INFORMING
BENEFICIARIES.—The Secretary 
shall take steps to inform beneficiaries about the avail-
ability of a Medicare operated drug plan or plans including 
providing information in the annual handbook distributed 
to all beneficiaries and adding information to the official 
public Medicare Web site related to prescription drug cov-
erage available through this part. 
‘‘(g) APPLICATION OF ALL OTHER REQUIREMENTS 
FOR PRESCRIPTION DRUG PLANS.—Except as specifically 
provided in this section, any Medicare operated drug plan 
shall meet the same requirements as apply to any other 
prescription drug plan, including the requirements of sec-
tion 1860D–4(b)(1) relating to assuring pharmacy ac-
cess).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1860D–3(a) of the Social Security 
Act (42 U.S.C. 1395w–103(a)) is amended by add-
ing at the end the following new paragraph: 
‘‘(4) AVAILABILITY OF THE MEDICARE OPER-
ATED PRESCRIPTION DRUG PLAN.—A Medicare op-
erated prescription drug plan (as defined in section 
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1860D–11A(c)) shall be offered nationally in accord-
ance with section 1860D–11A.’’. 
(2)(A) Section 1860D–3 of the Social Security 
Act (42 U.S.C. 1395w–103) is amended by adding 
at the end the following new subsection: 
‘‘(c) PROVISIONS
ONLY
APPLICABLE
IN
2006 
THROUGH 2011.—The provisions of this section shall only 
apply with respect to 2006 through 2011.’’. 
(B) Section 1860D–11(g) of such Act (42 
U.S.C. 1395w–111(g)) is amended by adding at the 
end the following new paragraph: 
‘‘(8) NO
AUTHORITY
FOR
FALLBACK
PLANS 
AFTER 2011.—A fallback prescription drug plan shall 
not be available after December 31, 2011.’’. 
(3) Section 1860D–13(c)(3) of the Social Secu-
rity Act (42 U.S.C. 1395w–113(c)(3)) is amended— 
(A) in the heading, by inserting ‘‘AND 
MEDICARE
OPERATED
PRESCRIPTION
DRUG 
PLANS’’ after ‘‘FALLBACK PLANS’’; and 
(B) by inserting ‘‘or a Medicare operated 
prescription drug plan’’ after ‘‘a fallback pre-
scription drug plan’’. 
(4) Section 1860D–16(b)(1) of the Social Secu-
rity Act (42 U.S.C.1395w–116(b)(1)) is amended— 
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(A) in subparagraph (C), by striking 
‘‘and’’ after the semicolon at the end; 
(B) in subparagraph (D), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(E) payments for expenses incurred with 
respect to the operation of Medicare operated 
prescription drug plans under section 1860D– 
11A.’’. 
(5) Section 1860D–41(a) of the Social Security 
Act (42 U.S.C. 1395w–151(a)) is amended by add-
ing at the end the following new paragraph: 
‘‘(19) MEDICARE
OPERATED
PRESCRIPTION 
DRUG PLAN.—The term ‘Medicare operated prescrip-
tion drug plan’ has the meaning given such term in 
section 1860D–11A(c).’’. 
SEC. 3. IMPROVED APPEALS PROCESS UNDER THE MEDI-
CARE OPERATED PRESCRIPTION DRUG PLAN. 
Section 1860D–4(h) of the Social Security Act (42 
U.S.C. 1305w–104(h)) is amended by adding at the end 
the following new paragraph: 
‘‘(4) APPEALS PROCESS FOR MEDICARE OPER-
ATED PRESCRIPTION DRUG PLAN.— 
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