‘‘(3) OPTIONAL COVERAGE OF MEDICARE PRE-
SCRIPTION
DRUG
COST-SHARING.—Notwithstanding 
paragraph (1), a State may, at its option, provide 
medical assistance under the plan under this title for 
the deductible and cost-sharing imposed under a 
prescription drug plan (or an MA–PD plan) for full- 
benefit dual eligible individuals and payment shall be 
available under section 1903(a) with respect to such 
assistance provided. ’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall be effective as if included in the enact-
ment of Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108–173). 
SEC. 4. MEDICARE COVERAGE OF OFF-LABEL USES OF PRE-
SCRIPTION DRUGS AND BIOLOGICALS. 
(a) IN GENERAL.—Section 1860D—2(e) of the So-
cial Security Act (42 U.S.C. 1395w–102(e)) is amended 
at the end by adding the following new paragraph: 
‘‘(4) RULE OF CONSTRUCTION.—Nothing in this sub-
section shall be construed as excluding from the definition 
of the term ‘covered part D drug’— 
‘‘(A) a drug described in paragraph (1)(A) on 
the sole basis that such drug is prescribed by a phy-
sician for a use other than a use included in the la-
beling of such drug pursuant to the approval of the 
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safety and effectiveness of such drug as a prescrip-
tion drug under section 505 or 507 of the Federal 
Food, Drug, and Cosmetic Act or approval of such 
drug under section 505(j) of such Act; or 
‘‘(B) a biological product described in para-
graph (1)(B) on the sole basis that such product is 
prescribed by a physician for a use other than a use 
included in the labeling of such product pursuant to 
the licensure of such product under section 351 of 
the Public Health Service Act; 
even if the unlabeled use of the drug or product is not 
included in a standard clinical reference compendia used 
by clinicians for purposes of providing guidance to such 
clinicians with respect to unlabeled uses of such a drug 
or product.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall be effective as if included in the enact-
ment of Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108–173). 
SEC. 5. AUTHORIZATION FOR SECRETARY OF HEALTH AND 
HUMAN SERVICES TO WAIVE DENIAL OF PRE-
SCRIPTION DRUG COVERAGE. 
(a) IN GENERAL.—Section 1860D–4(h) of the Social 
Security Act (42 U.S.C. 1395w–104(h)) is amended at the 
end by adding the following new paragraph: 
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‘‘(4) AUTHORIZATION FOR SECRETARY TO WAIVE 
DENIAL OF PRESCRIPTION DRUG COVERAGE.—After a 
part D eligible individual has exhausted all rights of such 
individual under this subsection and subsection (g), with 
respect to a determination made under this subsection or 
subsection (g) for a prescription drug plan not to provide 
for coverage of a covered part D drug (or a determination 
related to the application of tiered cost-sharing described 
in subsection (g)(2)), the individual may apply to the Sec-
retary for a waiver that requires the prescription drug 
plan to provide for such coverage (or provide for an excep-
tion to the structure of such tiered cost-sharing). Upon 
receipt of such application, the Secretary may grant such 
waiver if the prescribing physician certifies that the cov-
erage of such prescription drug is medically necessary with 
respect to the individual.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall be effective as if included in the enact-
ment of Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108–173). 
SEC. 6. HOLDING PHARMACIES HARMLESS FOR CERTAIN 
COSTS INCURRED DURING IMPLEMENTATION 
OF MEDICARE PART D. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services shall provide for such payments to phar-
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macies as may be necessary to reimburse pharmacies fully 
for— 
(1) transaction fees associated with any point- 
of-sale facilitated identification and enrollment proc-
ess established by the Secretary to facilitate, at 
point of sale, the identification of drug plan assign-
ment of full-benefit dual eligible individuals (as de-
fined in section 1935(c)(6) of the Social Security 
Act (42 U.S.C. 1396u–5(c)(6)) or the enrollment of 
previously unidentified or new full-benefit dual eligi-
ble individuals into Medicare prescription drug cov-
erage under part D of title XVIII of the Social Secu-
rity Act; 
(2) costs associated with technology or software 
upgrades necessary to make any identification and 
enrollment inquiries as part of a process described in 
paragraph (1); and 
(3) costs of providing prescription drugs and bi-
ological products to part D eligible individuals (as 
defined in section 1860D–1(a)(3)(A) of such Act (42 
U.S.C. 1395w–101(a)(3)(A)) whose prescription 
drug plans could not be identified, if the pharmacy 
involved was not reimbursed for such costs upon 
completion of plan reconciliation. 
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