I
105TH CONGRESS
2D SESSION
H. R. 4627
To provide for substantial reductions in the price of prescription drugs for
Medicare beneficiaries.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 25, 1998
Mr. ALLEN (for himself, Mr. TURNER, Mr. TIERNEY, Mr. WAXMAN, Mr.
BERRY, Mr. BARRETT of Wisconsin, Mr. BROWN of Ohio, Mr. STUPAK,
Mr. WEYGAND, Mr. STARK, Ms. KILPATRICK, Mr. KUCINICH, Mr. SAND-
ERS, Mr. CUMMINGS, Mr. SERRANO, Mr. THOMPSON, Mr. POMEROY, Mr.
JOHNSON of Wisconsin, Mr. FRANK of Massachusetts, Mr. SANDLIN, Ms.
STABENOW, Mr. YATES, Mr. BORSKI, Mr. FROST, Mr. DAVIS of Illinois,
Mrs. THURMAN, Mr. KIND, and Mr. ABERCROMBIE) introduced the fol-
lowing bill; which was referred to the Committee on Commerce, and in
addition to the Committee on Ways and Means, for a period to be subse-
quently 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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Prescription Drug
Fairness for Seniors Act of 1998’’.
beneficiaries at low prices. Medicare beneficiaries are
denied this benefit and cannot obtain their prescrip-
tion drugs at the favorable prices available to other
federally funded health care programs.
(5) It has been estimated that implementation
of the policy set forth in this Act will reduce pre-
scription prices for Medicare beneficiaries by more
than 40 percent.
(6) In addition to substantially lowering health
care costs for older Americans, implementation of
the policy set forth in this Act will significantly im-
prove the health and well-being of older Americans
and lower the costs to the Federal taxpayer of the
Medicare program.
(b) PURPOSE.—The purpose of this Act is to protect
Medicare beneficiaries from discriminatory pricing by drug
manufacturers and to make prescription drugs available
to Medicare beneficiaries at substantially reduced prices,
by allowing pharmacies to purchase drugs for Medicare
beneficiaries at the substantially reduced price available
under the Federal Supply Schedule.
SEC. 3. MEDICARE BENEFICIARY DRUG BENEFIT CARD.
The Secretary of Health and Human Services shall
furnish to each Medicare beneficiary a drug benefit card
that enables the beneficiary to purchase covered prescrip-
tion drugs from participating pharmacies at reduced
prices pursuant to section 4.
SEC. 4. PARTICIPATING PHARMACIES.
(a) AGREEMENTS TO PARTICIPATE.—Any qualified
pharmacy may enter into an agreement with the Secretary
that enables the pharmacy to sell covered outpatient drugs
to holders of Medicare drug benefit cards at a reduced
price, by authorizing the pharmacy to operate as a partici-
pating pharmacy under this Act.
(b) RIGHT OF PARTICIPATING PHARMACIES TO OB-
TAIN DRUGS.—An agreement under this section shall enti-
tle the participating pharmacy to purchase any covered
outpatient drug that is listed on the Federal Supply
Schedule of the General Services Administration at the
participating pharmacy discount price for that drug deter-
mined under subsection (d).
(c) QUANTITY OF DRUGS PURCHASED.—An agree-
ment under this section shall permit the participating
pharmacy to purchase under this Act as much of a covered
outpatient drug as is sold by the pharmacy to holders of
Medicare drug benefit cards.
(d) PARTICIPATING PHARMACY DISCOUNT PRICE.—
(1) IN GENERAL.—The Secretary shall deter-
mine a participating pharmacy discount price for
each covered outpatient drug.
(2) DETERMINATION.—The participating phar-
macy discount price for a covered outpatient drug
shall be determined by adding—
(A) the price at which the drug is available
to Federal agencies from the Federal Supply
Schedule under section 8126 of title 38, United
States Code; plus
(B) an amount that reflects the adminis-
trative costs incurred by the Secretary in ad-
ministering this Act.
SEC. 5. ADMINISTRATION.
(a) IN GENERAL.—The Secretary shall administer
this Act in a manner that uses existing methods of obtain-
ing and distributing drugs to the maximum extent pos-
sible, consistent with efficiency and cost effectiveness.
(b) REGULATIONS.—The Secretary shall issue such
regulations as may be necessary to implement this Act.
SEC. 6. REPORTS TO CONGRESS REGARDING EFFECTIVE-
NESS OF ACT.
(a) IN GENERAL.—Not later than 2 years after the
date of the enactment of this Act, and annually thereafter,
the Secretary shall report to the Congress regarding the
effectiveness of this Act in—
(1) protecting Medicare beneficiaries from dis-
criminatory pricing by drug manufacturers; and
(2) making prescription drugs available to
Medicare beneficiaries at substantially reduced
prices.
(b) CONSULTATION.—In preparing such reports, the
Secretary shall consult with public health experts, affected
industries, organizations representing consumers and
older Americans, and other interested persons.
(c) RECOMMENDATIONS.—The Secretary shall in-
clude in such reports any recommendations they consider
appropriate for changes in this Act to further reduce the
cost of covered outpatient drugs to Medicare beneficiaries.
SEC. 7. DEFINITIONS.
In this Act:
(1) COVERED OUTPATIENT DRUG.—The term
‘‘covered outpatient drug’’ has the meaning given
that term in section 1927(k)(2) of the Social Secu-
rity Act (42 U.S.C. 1396r–8(k)(2)).
(2) 
MEDICARE
BENEFICIARY.—The 
term
‘‘Medicare beneficiary’’ means an individual entitled
to benefits under part A of title XVIII of the Social
Security Act or enrolled under part B of such title,
or both.
(3) MEDICARE
DRUG
BENEFIT
CARD.—The
term ‘‘Medicare drug benefit card’’ means such a
card issued under section 3.
(4) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
SEC. 8. EFFECTIVE DATE.
The Secretary shall implement this Act as expedi-
tiously as practicable and in a manner consistent with the
obligations of the United States.
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