I 
109TH CONGRESS 
2D SESSION 
H. R. 4697 
To amend title XVIII of the Social Security Act to replace the Medicare 
prescription drug benefit adopted by the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 with a revised and sim-
plified prescription benefit program for all Medicare beneficiaries. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 1, 2006 
Mr. SANDERS (for himself, Mr. KUCINICH, Mr. DEFAZIO, Mr. OWENS, Ms. 
LEE, Mr. HINCHEY, Mr. PAYNE, Mr. GRIJALVA, Mr. OLVER, Mr. STARK, 
Ms. WOOLSEY, Mr. NADLER, Mr. MCGOVERN, Ms. KAPTUR, Mr. CON-
YERS, Ms. CORRINE BROWN of Florida, Mrs. EMERSON, and Mr. 
TIERNEY) introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committee on 
Ways and Means, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to replace 
the Medicare prescription drug benefit adopted by the 
Medicare Prescription Drug, Improvement, and Mod-
ernization Act of 2003 with a revised and simplified 
prescription benefit program for all Medicare bene-
ficiaries. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Medicare Drugs for Seniors (MEDS) Act of 2006’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents 
Sec. 2. Findings 
Sec. 3. Repeal and transition 
Sec. 4. Prescription medicine benefit program 
‘‘PART D—PRESCRIPTION MEDICINE BENEFIT FOR THE AGED AND 
DISABLED 
‘‘Sec. 1860. Establishment of prescription medicine benefit program for 
the aged and disabled 
‘‘Sec. 1860A. Scope of benefits 
‘‘Sec. 1860B. Payment of benefits; benefit limits 
‘‘Sec. 1860C. Eligibility and enrollment 
‘‘Sec. 1860D. Premiums 
‘‘Sec. 1860E. Special eligibility, enrollment, and copayment rules for low- 
income individuals 
‘‘Sec. 1860F. Prescription Medicine Insurance Account 
‘‘Sec. 1860G. Administration of benefits 
‘‘Sec. 1860H. Employer Incentive Program for employment-based retiree 
medicine coverage 
‘‘Sec. 1860I. Promotion of pharmaceutical research on break-through 
medicines while providing program cost containment 
‘‘Sec. 1860J. Appropriations to cover Government contributions 
‘‘Sec. 1860K. Prescription medicine defined 
Sec. 5. Substantial reductions in the price of prescription drugs for medicare 
beneficiaries 
Sec. 6. Importation of certain prescription drugs 
‘‘Sec. 804. Commercial and personal importation of prescription drugs 
‘‘Sec. 805. Disposition of certain drugs denied admission 
‘‘Sec. 503B. Internet sales of prescription drugs 
Sec. 7. Reasonable price agreement for federally funded research 
Sec. 8. GAO ongoing studies and reports on program; miscellaneous reports 
Sec. 9. Medigap transition provisions 
SEC. 2. FINDINGS. 
Congress makes the following findings: 
(1) The first month of implementation of the 
Medicare prescription drug benefit enacted by the 
amendments made by title I of the Medicare Pre-
scription Drug, Improvement, and Modernization 
Act of 2003 (Public Law 108–173) revealed inherent 
problems with the structure of the benefit and dem-
onstrated that the benefit is complicated and con-
fusing to individuals eligible for the benefit. 
(2) During such first month, hundreds of thou-
sands of low-income Medicare beneficiaries had dif-
ficulty obtaining their covered prescription drugs; 
many were turned away from the pharmacies with-
out their covered prescription drugs and many oth-
ers were overcharged for their covered prescription 
drugs. 
(3) Since implementation of such prescription 
drug benefit 26 states needed to intervene to ensure 
that their low-income Medicare beneficiaries ob-
tained their covered prescription drugs and many 
States have been forced to declare public health 
emergencies. 
(4) The amendments made by title I of the 
Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 do not ensure the long- 
term financial viability of the Medicare prescription 
drug benefit enacted by such title through cost-con-
tainment measures, and contains a provision that ex-
plicitly prohibits Medicare from negotiating for lower
prescription drug prices, which is a practice of the 
Department of Veterans Affairs (VA). 
(5) All Medicare beneficiaries should have ac-
cess to a voluntary, reliable, affordable, and defined 
outpatient medicine benefit that is part of the Medi-
care program and that assists with the high cost of 
prescription medicines and protects such bene-
ficiaries from excessive out-of-pocket costs. 
(6) Americans unjustly pay up to 5 times more 
to fill their prescriptions than consumers in other 
countries. 
(7) The United States is the largest market for 
pharmaceuticals in the world, yet American con-
sumers pay the highest prices for brand pharma-
ceuticals in the world. 
(8) A prescription drug is neither safe nor ef-
fective to an individual who cannot afford it. 
(9) Allowing and structuring the importation of 
prescription drugs to ensure access to safe and af-
fordable drugs approved by the Food and Drug Ad-
ministration will provide a level of safety to Amer-
ican consumers that they do not currently enjoy. 
(10) 
American 
seniors 
will 
spend 
$1,800,000,000,000 on pharmaceuticals over the 
next 10 years.
(11) Allowing open pharmaceutical markets 
could 
save 
American 
consumers 
at 
least 
$38,000,000,000 each year. 
SEC. 3. REPEAL AND TRANSITION. 
(a) REPEAL OF MEDICARE PART D BENEFIT AND 
TRANSITION TO NEW MEDICARE PRESCRIPTION MEDI-
CINE BENEFIT PROGRAM.—The amendments made by 
title I of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (Public Law 108–173) are 
repealed as of December 31, 2006, and the provisions of 
law amended by such title shall read as if such title had 
not been enacted. 
(b) TRANSITION.—The Secretary of Health and 
Human Services shall provide for an appropriate transi-
tion from administering the Social Security Act in accord-
ance with the amendments made by title I of the Medicare 
Prescription Drug, Improvement, and Modernization Act 
of 2003 (Public Law 108–173) to administering such Act 
in accordance with the amendments made by section 4 of 
this Act. 
SEC. 4. PRESCRIPTION MEDICINE BENEFIT PROGRAM. 
(a) IN GENERAL.—Title XVIII of the Social Security 
Act (42 U.S.C. 1395 et seq.) is amended— 
(1) by redesignating part D as part E; and
(2) by inserting after part C the following new 
part: 
‘‘PART D—PRESCRIPTION MEDICINE BENEFIT FOR THE 
AGED AND DISABLED 
‘‘ESTABLISHMENT OF PRESCRIPTION MEDICINE BENEFIT 
PROGRAM FOR THE AGED AND DISABLED 
‘‘SEC. 1860. There is established a voluntary insur-
ance program to provide prescription medicine benefits, 
including pharmacy services, in accordance with the provi-
sions of this part for individuals who are aged or disabled 
or have end-stage renal disease and who elect to enroll 
under such program, to be financed from premium pay-
ments by enrollees together with contributions from funds 
appropriated by the Federal Government. 
‘‘SCOPE OF BENEFITS 
‘‘SEC. 1860A. (a) IN GENERAL.—The benefits pro-
vided to an individual enrolled in the insurance program 
under this part shall consist of— 
‘‘(1) payments made, in accordance with the 
provisions of this part, for covered prescription 
medicines (as specified in subsection (b)) dispensed 
by any pharmacy participating in the program under 
this part (and, in circumstances designated by the 
Secretary, by a nonparticipating pharmacy), includ-
ing any specifically named medicine prescribed for 
the individual by a qualified health care professional