I 
116TH CONGRESS 
1ST SESSION H. R. 4769 
To amend part D of 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 
OCTOBER 21, 2019 
Ms. SCHAKOWSKY introduced the following bill; which was referred to the 
Committee 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 part D of 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 2019’’. 
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SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRE-
SCRIPTION DRUG PLAN OPTION. 
(a) IN GENERAL.—Subpart 2 of part D of title XVIII 
of the Social Security Act is amended by inserting after 
section 1860D–11 (42 U.S.C. 1395w–111) 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 2021), 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 (d)) with a service area that consists 
of the entire United States and shall enter into negotia-
tions in accordance with subsection (c) with pharma-
ceutical manufacturers to reduce the purchase cost of cov-
ered part D drugs for eligible part D individuals who en-
roll in such a plan. 
‘‘(b) 
ENROLLMENT.—Notwithstanding 
subpara-
graphs (C) and (D) of section 1860D–1(b)(1), a Medicare 
operated prescription drug plan offered under this section 
shall serve as the default prescription drug plan for all 
part D enrollees unless another prescription drug plan is 
selected. 
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‘‘(c) 
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 in 
a Medicare operated prescription drug plan and shall en-
courage the use of more affordable therapeutic equivalents 
to the extent such practices do not override medical neces-
sity as determined by the prescribing physician. To the 
extent practicable and consistent with the previous sen-
tence, the Secretary shall implement negotiation and in-
centive strategies similar to those used by other Federal 
purchasers of prescription drugs to reduce the purchase 
cost of covered Part D drugs, and other strategies, as de-
scribed in subsection (f), which may include the use of a 
pricing scale based on an international price index. 
‘‘(d) MEDICARE OPERATED PRESCRIPTION DRUG 
PLAN DEFINED.—For purposes of this part, the term 
‘Medicare operated prescription drug plan’ means a com-
prehensive prescription drug plan that offers qualified pre-
scription drug coverage and access to negotiated prices de-
scribed in section 1860D–2(a)(1)(A). Such a plan may 
offer supplemental prescription drug coverage in the same 
manner as other qualified prescription drug coverage of-
fered by other prescription drug plans. 
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‘‘(e) 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 2021 and each suc-
ceeding year shall be based on the average monthly 
per capita actuarial cost of offering the Medicare op-
erated 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). 
‘‘(f) USE OF NEGOTIATION AND BENEFIT DESIGN 
INCENTIVES.— 
‘‘(1) IN GENERAL.—With respect to the oper-
ation of a Medicare operated prescription drug plan 
and in negotiating with respect to the purchase price 
of covered part D drugs in such plan, the Secretary 
shall reward value, increase appropriate use of 
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drugs, and ensure patient safety and access to medi-
cations. 
‘‘(2) ROLE
OF
AHRQ.—The Director of the 
Agency for Healthcare Research and Quality, in co-
ordination with the Administrator of the Centers for 
Medicare & Medicaid Services, shall be responsible 
for assessing the clinical benefit of covered part D 
drugs and making recommendations to the Secretary 
regarding the negotiated prices of covered drugs and 
any appropriate tiering or incentive strategies under 
the plan. In conducting such assessments and mak-
ing such recommendations, the Director shall carry 
out the following activities: 
‘‘(A) 
Consider 
the 
comparable 
inter-
national price of such drugs based upon the me-
dian retail list price of such drug (which shall 
be, as practicable, the volume-weighted price for 
comparable units and dosage forms) among a 
category of at least the following peer reference 
countries: 
Canada, 
the 
United 
Kingdom, 
France, Japan, Australia, and Germany. 
‘‘(B) Consider safety concerns and post- 
market data, including those identified by the 
Food and Drug Administration and from na-
tional health registries. 
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‘‘(C) Use available data and evaluations, 
including from research supported by the Na-
tional Institutes of Health, with priority given 
to randomized controlled trials, to examine clin-
ical effectiveness, comparative effectiveness, 
safety, and enhanced compliance with a drug 
regimen. 
‘‘(D) Use the same classes of drugs devel-
oped by United States Pharmacopeia for this 
part. 
‘‘(E) Consider evaluations made by— 
‘‘(i) the Director under section 1013 
of the Medicare Prescription Drug, Im-
provement, and Modernization Act of 
2003; 
‘‘(ii) other Federal entities, such as 
the Secretary of Veterans Affairs; and 
‘‘(iii) other private and public entities, 
which may include the Drug Effectiveness 
Review Project and Medicaid programs. 
‘‘(F) Consider recommendations made by 
the advisory committee pursuant to paragraph 
(3)(F). 
‘‘(G) Recommend to the Secretary those 
drugs in a class that provide a greater clinical 
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benefit, including fewer safety concerns or less 
risk of side-effects, than another drug in the 
same class. 
‘‘(3) USE OF ADVISORY COMMITTEE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish and appoint an advisory committee (in 
this paragraph referred to as the ‘advisory com-
mittee’)— 
‘‘(i) to review petitions from drug 
manufacturers, health care provider orga-
nizations, patient groups, and other enti-
ties regarding negotiated prices; and 
‘‘(ii) to recommend any changes in 
order to further negotiations with respect 
to such prices. 
‘‘(B) COMPOSITION.—Subject to subpara-
graph (C), the advisory committee shall be com-
posed of 9 members and shall include represent-
atives of physicians, pharmacists, consumers, 
and others with expertise in evaluating prescrip-
tion drugs. The Secretary shall select members 
based on their knowledge of pharmaceuticals 
and the Medicare population. Members shall be 
deemed to be special Government employees for 
purposes of applying the conflict of interest pro-
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visions under section 208 of title 18, United 
States Code, and no waiver of such provisions 
for such a member shall be permitted. 
‘‘(C) BANNED INDIVIDUALS.— 
‘‘(i) DRUG COMPANY LOBBYISTS.—No 
former registered drug manufacturer lob-
byist— 
‘‘(I) may be appointed to the ad-
visory committee; or 
‘‘(II) may be employed by the ad-
visory committee during the 6-year 
period beginning on the date on which 
the registered lobbyist terminates its 
registration in accordance with section 
4(d) of the Lobbying Disclosure Act 
of 1995 (2 U.S.C. 1603(d)) or the 
agent terminates its status, as appli-
cable. 
‘‘(ii) SENIOR
EXECUTIVES
OF
LAW- 
BREAKING COMPANIES.—No former senior 
executive of a covered entity (as defined in 
clause (iii))— 
‘‘(I) may be appointed to the Ad-
visory Committee; or 
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‘‘(II) may be employed by the 
Advisory Committee during the 6-year 
period beginning on the later of— 
‘‘(aa) the date of the settle-
ment described in item (aa) of 
clause (iii)(II); or 
‘‘(bb) the date on which the 
enforcement action described in 
item (bb) of such clause has con-
cluded. 
‘‘(iii) COVERED
ENTITY.—The term 
‘covered entity’ means any entity that is— 
‘‘(I) a drug manufacturer; and 
‘‘(II)(aa) operating under Fed-
eral settlement including a Federal 
consent decree; or 
‘‘(bb) the subject of an enforce-
ment action in a court of the United 
States or by an agency. 
‘‘(D) 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. 
‘‘(E) REQUEST FOR STUDIES.—The advi-
sory committee may request the Agency for 
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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)(i) in order to assess cost-effective-
ness, clinical effectiveness, comparative effec-
tiveness, safety, and compliance with a drug 
regimen. 
‘‘(F) RECOMMENDATIONS.—The advisory 
committee shall make recommendations to the 
Director of the Agency for Healthcare Research 
and Quality regarding the appropriate price at 
which to begin negotiations on a part D drug 
pursuant to this section. 
‘‘(G) LIMITATIONS ON REVIEW OF MANU-
FACTURER
PETITIONS.—The advisory com-
mittee shall not review a petition of a drug 
manufacturer under subparagraph (A)(i) 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. 
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‘‘(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) INFORMING BENEFICIARIES.—The Secretary 
shall take steps to inform part D eligible individuals not 
previously enrolled in a Medicare operated drug plan (in-
cluding such individuals who are newly eligible to enroll 
under this part) regarding the enrollment of such indi-
vidual in a Medicare operated drug plan in accordance 
with this section, including providing information in the 
annual handbook and adding information to the official 
public Medicare website related to prescription drug cov-
erage available through this part. 
‘‘(h) 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.— 
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(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 
1860D–11A(d)) shall be offered nationally in ac-
cordance 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 2020.—The provisions of this section shall only 
apply with respect to 2006 through 2020.’’. 
(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 2020.—A fallback prescription drug plan shall 
not be available after December 31, 2020.’’. 
(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 
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(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— 
(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(d).’’. 
(c) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be interpreted to supersede any other negotia-
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tion authority granted to the Secretary under Federal law 
with respect to prescription drug prices. 
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.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
develop a well-defined process for appeals for 
denials of benefits under this part under the 
Medicare operated prescription drug plan (as 
defined in section 1860D–11A(d)). Such proc-
ess shall be efficient, impose minimal adminis-
trative burdens, and ensure the timely procure-
ment of medications. Medical necessity shall be 
based on professional medical judgment, the 
medical condition of the beneficiary, and other 
medical evidence. 
‘‘(B) CONSULTATION IN DEVELOPMENT OF 
PROCESS.—In developing the appeals process 
under subparagraph (A), the Secretary shall 
consult with consumer and patient groups, as 
well as other key stakeholders, to ensure the 
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goals described in subparagraph (A) are 
achieved.’’. 
Æ 
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