(B) by adding at the end the following new 
clause: 
‘‘(iv) LIMITATION TO ENROLLMENT IN 
FEDERAL NATIONAL PRESCRIPTION DRUG 
DISCOUNT CARD PROGRAM IN 2005.—Not-
withstanding any other provision of this 
section, for periods beginning with January 
1, 2005, the only discount card program in 
which an individual may be enrolled under 
this section shall be the Federal national 
prescription drug discount card program 
described in subsection (l). Individuals en-
rolled in another program as of December 
31, 2004, who do not affirmatively 
disenroll from all discount card programs 
under this section are deemed to be en-
rolled in such Federal national prescription 
drug discount card program.’’. 
(b) ADDITIONAL PROGRAM REQUIREMENTS.—Such 
section is further amended by adding at the end the fol-
lowing new subsection: 
‘‘(l) PROVISIONS RELATING TO FEDERAL NATIONAL 
PRESCRIPTION DRUG DISCOUNT CARD PROGRAM.—
‘‘(1) ADDITIONAL REQUIREMENTS.—The Fed-
eral national prescription drug discount card pro-
gram described in subsection (a)(1)(C) shall also 
meet the following requirements: 
‘‘(A) DISCOUNTED PRICES.—Through di-
rect negotiations with prescription drug manu-
facturers, the discounted prices offered under 
the program shall be less than prices otherwise 
available in the retail market. Through such ne-
gotiations, the Secretary shall obtain discounted 
prices that are at least as low as the manufac-
turer’s average foreign price (as defined in 
paragraph (3)) for the drug involved. 
‘‘(B) PASSING THROUGH ALL SAVINGS.—
The full amount of discounted savings are 
passed through to enrollees. 
‘‘(C) FEE FOR CARD.—The annual fee for 
enrollment in the program shall be $30 (except 
as provided under subparagraphs (E) through 
(G) of subsection (c)(1)), which fees shall be 
available to the Secretary for administrative ex-
penses in offering such program. 
‘‘(D) NATIONAL AVAILABILITY.—The pro-
gram shall be made available to individuals re-
siding anyplace in the United States. 
‘‘(E) 
HANDLING
FEE
FOR
PHAR-
MACISTS.—The program shall be designed to
provide for a reasonable handling fee for phar-
macists in connection with the provision of 
drugs obtained under the program and shall be 
approximately equal to the average handling fee 
for pharmacists of other large insurance plans 
that administer drug benefits. 
‘‘(2) OVERSIGHT.—The oversight authority of 
the Secretary under subsection (i)(2) with respect to 
such Federal national prescription drug discount 
card program shall be exercised by the Inspector 
General of the Department of Health and Human 
Services. 
‘‘(3) AVERAGE FOREIGN PRICE DEFINED.—
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘average foreign price’ 
means, with respect to a covered discount card 
drug, the average price that the manufacturer 
of the drug realizes on the sale of drugs with 
the same active ingredient or ingredients that 
are consumed in Canada, France, Germany, 
Italy, Japan, and the United Kingdom, taking 
into account—
‘‘(i) any rebate, contract term or con-
dition, or other arrangement (whether with 
the purchaser or other persons) that has
the effect of reducing the amount realized 
by the manufacturer on the sale of the 
drugs; 
‘‘(ii) adjustments for any differences 
in dosage, formulation, or other relevant 
characteristics of the drugs; and 
‘‘(iii) any other contract or side agree-
ment that has the effect of adjusting the 
effective price of the drug, including agree-
ments to purchase non-drug products. 
‘‘(B) EXEMPT TRANSACTIONS.—The Sec-
retary may, by regulation, exempt from the cal-
culation of the average foreign price of a drug 
those prices realized by a manufacturer in 
transactions that are entered into for charitable 
purposes, for research purposes, or under other 
unusual circumstances, if the Secretary deter-
mines that the exemption is in the public inter-
est and is consistent with the purposes of this 
section.’’. 
(c) CONFORMING AMENDMENTS.—Such section is 
further amended—
(1) in subsection (h)(1)(A), by adding after and 
below clause (v) the following new sentence: