I 
108TH CONGRESS 
2D SESSION 
H. R. 3767
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 HOUSE OF REPRESENTATIVES 
FEBRUARY 4, 2004
Mr. BERRY (for himself, Ms. SCHAKOWSKY, Mr. ALLEN, Mr. PALLONE, Mr. 
HINCHEY, 
Mrs. 
MCCARTHY
of 
New 
York, 
Ms. 
SOLIS, 
Mrs. 
CHRISTENSEN, Mr. GRIJALVA, Mr. BOUCHER, Mrs. TAUSCHER, Mr. 
ROSS, Mr. TAYLOR of Mississippi, Ms. ROYBAL-ALLARD, Ms. LEE, Mr. 
SERRANO, Mr. STARK, Mr. MEEHAN, Mr. CUMMINGS, Mr. WAXMAN, Mr. 
CONYERS, Mr. BISHOP of New York, and Ms. DELAURO) introduced the 
following bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committee on Ways and Means, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
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.
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 ‘‘Medicare Prescription 
Drug Savings and Choice Act of 2004’’.
SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRE-
SCRIPTION DRUG PLAN OPTION. 
(a) IN GENERAL.—Subpart 2 of part D of the Social 
Security Act, as added by section 101 of the Medicare Pre-
scription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108–173), is amended by inserting 
after section 1860D–11 the following new section: 
‘‘MEDICARE OPERATED PRESCRIPTION DRUG PLAN 
OPTION 
‘‘SEC. 1860D–11A. (a) IN
GENERAL.—Notwith-
standing any other provision of this part, for each year 
(beginning with 2006), in addition to any plans offered 
under section 1860D–11, the Secretary shall offer one or 
more medicare operated prescription drug plans (as de-
fined in subsection (c)) with a service area that consists 
of the entire United States and shall enter into negotia-
tions with pharmaceutical manufacturers to reduce the 
purchase cost of covered part D drugs for eligible part 
D individuals in accordance with subsection (b). 
‘‘(b) 
NEGOTIATIONS.—Notwithstanding 
section 
1860D–11(i), for purposes of offering a medicare operated 
prescription drug plan under this section, the Secretary 
shall negotiate with pharmaceutical manufacturers with 
respect to the purchase price of covered part D drugs and 
shall encourage the use of more affordable therapeutic 
equivalents to the extent such practices do not override
medical necessity as determined by the prescribing physi-
cian. To the extent practicable and consistent with the 
previous sentence, the Secretary shall implement strate-
gies similar to those used by other Federal purchasers of 
prescription drugs, and other strategies, to reduce the pur-
chase cost of covered part D drugs. 
‘‘(c) MEDICARE OPERATED PRESCRIPTION DRUG 
PLAN DEFINED.—For purposes of this part, the term 
‘medicare operated prescription drug plan’ means a pre-
scription drug plan that offers qualified prescription drug 
coverage and access to negotiated prices described in sec-
tion 1860D–2(a)(1)(A). Such a plan may offer supple-
mental prescription drug coverage in the same manner as 
other qualified prescription drug coverage offered by other 
prescription drug plans. 
‘‘(d) MONTHLY BENEFICIARY PREMIUM.—
‘‘(1) QUALIFIED
PRESCRIPTION
DRUG
COV-
ERAGE.—The monthly beneficiary premium for 
qualified prescription drug coverage and access to 
negotiated prices described in section 1860D–
2(a)(1)(A) to be charged under a medicare operated 
prescription drug plan shall be uniform nationally. 
Such premium for months in 2006 shall be $35 and 
for months in succeeding years shall be based on the 
average monthly per capita actuarial cost of offering
the medicare operated prescription drug plan for the 
year involved, including administrative expenses. 
‘‘(2) SUPPLEMENTAL PRESCRIPTION DRUG COV-
ERAGE.—Insofar as a medicare operated prescrip-
tion drug plan offers supplemental prescription drug 
coverage, the Secretary may adjust the amount of 
the premium charged under paragraph (1). 
‘‘(3) REQUIREMENT FOR AT LEAST ONE PLAN 
WITH
A $35 PREMIUM
IN 2006.—The Secretary 
shall ensure that at least one medicare operated pre-
scription drug plan offered in 2006 has a monthly 
premium of $35. ’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 1860D–3(a) of the Social Security 
Act, as added by section 101 of the Medicare Pre-
scription Drug, Improvement, and Modernization 
Act of 2003, is amended by adding at the end the 
following new paragraph: 
‘‘(4) AVAILABILITY OF THE MEDICARE OPER-
ATED PRESCRIPTION DRUG PLAN.—
‘‘(A) IN GENERAL.—A medicare operated 
prescription drug plan (as defined in section 
1860D–11A(c)) shall be offered nationally in 
accordance with section 1860D–11A. 
‘‘(B) RELATIONSHIP TO OTHER PLANS.—