I 
108TH CONGRESS 
1ST SESSION H. R. 1694
To establish an America Rx program to establish fairer pricing for prescrip-
tion drugs for individuals without access to prescription drugs at dis-
counted prices. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 9, 2003
Mr. MICHAUD (for himself, Mr. ALLEN, Mr. ABERCROMBIE, Mr. ALEXANDER, 
Mr. BROWN of Ohio, Mr. BERRY, Mr. BELL, Mr. CASE, Mr. CROWLEY, 
Mr. STARK, Mr. CARDOZA, Ms. DELAURO, Mr. FROST, Mr. HINCHEY, 
Mr. HOLDEN, Ms. JACKSON-LEE of Texas, Mr. HINOJOSA, Mr. ISRAEL, 
Mr. LYNCH, Mr. REYES, Mr. ROSS, Mr. PALLONE, Mr. POMEROY, Ms. 
SCHAKOWSKY, Mr. MEEHAN, Mr. SANDLIN, Mr. SANDERS, Mr. STEN-
HOLM, Mr. TURNER of Texas, Mr. WYNN, and Mr. STUPAK) introduced 
the following bill; which was referred to the Committee on Energy and 
Commerce 
A BILL 
To establish an America Rx program to establish fairer pric-
ing for prescription drugs for individuals without access 
to prescription drugs at discounted prices.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; FINDINGS; PURPOSE 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘America Rx Act of 2003’’. 
(b) FINDINGS.—Congress finds the following:
(1) Affordability is critical in providing access 
to prescription drugs for residents of the United 
States. 
(2) It is not the intention of the Congress to 
discourage employers and health insurers from pro-
viding coverage for prescription drugs, including dis-
counts for the purchase of those drugs. 
(c) PURPOSE.—The purpose of this Act is to establish 
an America Rx program that utilizes manufacturer re-
bates and pharmacy discounts to reduce prescription drug 
prices to those residents who are without access to dis-
counted prices for outpatient prescription drugs. 
SEC. 2. ESTABLISHMENT OF AMERICA RX PROGRAM. 
(a) ESTABLISHMENT.—
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall establish a program (in this 
section referred to as the ‘‘America Rx program’’) 
consistent with the provisions of this section to pro-
vide qualified residents with access to discounted 
prices for outpatient prescription drugs. 
(2) PRINCIPLES.—The Secretary shall design 
and execute the America Rx program in a manner 
consistent with the following principles: 
(A) Medicaid beneficiaries and other low-
income individuals, as well as senior citizens
and the disabled, are not hurt or disadvantaged 
as a result of the program’s implementation. 
(B) Pharmacies participating are ensured 
reasonable and timely payment of discounts 
they provide to qualified residents under the 
program. 
(C) The Federal Government will fully re-
imburse States for reasonable costs they incur 
in carrying out the program. 
(D) Individuals who apply for benefits 
under the program are screened for eligibility 
under the medicaid program and other applica-
ble Governmental health care programs and, if 
found eligible, are enrolled in such program or 
programs. 
(E) The Secretary provides for—
(i) outreach efforts to build public 
awareness of the program and maximize 
enrollment of qualified residents; and 
(ii) simplified eligibility procedures 
and uniform eligibility standards for quali-
fied residents. 
(3) QUALIFIED RESIDENT DEFINED.—For pur-
poses of this section, the term ‘‘qualified resident’’ 
means an individual who—
(A) a citizen or national of the United 
States (or an alien lawful residing permanently 
in the United States); and 
(B) as determined under regulations of the 
Secretary, is not covered under any public or 
private program that provides substantial bene-
fits (which may be discounted prices) towards 
the purchase of outpatient prescription drugs. 
(b) REBATE
AGREEMENTS
WITH
MANUFACTUR-
ERS.—
(1) IN GENERAL.—Under the America Rx pro-
gram the Secretary shall negotiate with manufactur-
ers of outpatient prescription drugs rebate agree-
ments with respect to drugs offered under the pro-
gram to qualified residents. 
(2) MINIMUM AMOUNT OF REBATES.—In nego-
tiating the amount of such a rebate under paragraph 
(1), the Secretary shall take into consideration the 
amount of the rebate calculated under the medicaid 
program, the average manufacturer price of pre-
scription drugs, and other information on prescrip-
tion drug prices and price discounts. The Secretary 
shall negotiate the amount of such rebates in a man-
ner so that the rebates on average are comparable 
to the average percentage rebate obtained in out-
patient prescription drugs provided under section 
1927(c) of the Social Security Act (42 U.S.C. 
1396r–8(c)). 
(3) PAYMENT.—Such rebates shall be payable 
to the Secretary according to a schedule (not less 
often than quarterly) negotiated with manufacturers 
and shall be paid, directly or through States, to par-
ticipating pharmacies that provide discounts to 
qualified residents. 
(4) INCENTIVE.—In order to induce manufac-
turers of outpatient prescription drugs to enter into 
such rebate agreements, the Secretary shall, in a 
manner consistent with the design principle specified 
in subsection (a)(2), provide, in the case of a manu-
facturer that has not entered into such an agree-
ment, for a denial of a deduction under chapter 1 
of the Internal Revenue Code of 1986 for the 
amount of expenses of the manufacturer for adver-
tising and marketing of drugs of the manufacturer, 
other than expenses for free samples of drugs sub-
ject to section 503(b)(1) of the Federal Food Drug, 
and Cosmetic Act intended to be distributed to pa-
tients. 
(5) APPLICATION OF REBATES.—Amounts re-
ceived by the Secretary as rebates under this sub-
section shall be placed into an appropriate account 
in the Treasury and shall be available in advance of 
appropriations to the Secretary for the payment of 
discounts and other costs of participating phar-
macies in carrying out the America Rx program and 
for the payment of administrative costs in carrying 
out the program. 
(c) ARRANGEMENTS WITH PARTICIPATING PHAR-
MACIES.—
(1) IN GENERAL.—Under the America Rx pro-
gram arrangements are made with pharmacies for 
the provision of prescription drugs at discounted 
prices to qualified residents in a reasonably acces-
sible manner. Such arrangements shall provide 
that—
(A) each participating pharmacy shall—
(i) provide discounts on prices for out-
patient prescription drugs for qualified 
residents in return for prompt reimburse-
ment of the amount of such discounts and 
a reasonable dispensing fee; 
(ii) not charge qualified residents 
more (before such discounts) for outpatient 
prescription drugs than the amount that
individuals who are not qualified residents 
are charged for such drugs; and 
(iii) report to the Secretary (or the 
Secretary’s designee) information regard-
ing the discounts provided and fees in-
curred; and 
(B) the program shall—
(i) reimburse a participating retail 
pharmacy on a prompt basis (no less 
promptly than as provided under the medi-
care program) for discounted prices pro-
vided to qualified residents under the pro-
gram and for reasonable dispensing fees; 
and 
(ii) not impose any additional fees on 
such pharmacies in connection with partici-
pation in the program. 
(2) DISCOUNTED PRICES.—The amount of the 
discount provided to enrolled qualifying residents 
shall reflect the amount of rebates obtained, reduced 
by expenses relating to administrative costs of the 
Federal and State governments and of participating 
pharmacies. The Secretary shall specify the method 
for computing and applying discounts, including a
method for computing and applying discounts on a 
uniform, average percentage basis. 
(d) ADMINISTRATION.—
(1) IN GENERAL.—Under the America Rx pro-
gram the Secretary may enter into appropriate ar-
rangements with States under which States provide 
for the administration of the program in return for 
payment of the reasonable administrative expenses 
associated with such administration. 
(2) ADMINISTRATIVE
FUNCTIONS.—Such ad-
ministration functions may include—
(A) determinations of eligibility of qualified 
residents; 
(B) arrangements with participating phar-
macies; and 
(C) such other functions as the Secretary 
determines appropriate. 
(3) CONTRACTUAL
AUTHORITY.—In carrying 
out responsibilities under this section, the Secretary 
and States may enter into agreements with phar-
macy benefit managers and other third parties. 
(e) DEFINITIONS.—For purposes of this section: 
(1) The term ‘‘manufacturer’’ has the meaning 
given such term in section 1927(k)(5) of the Social 
Security Act (42 U.S.C. 1396r-8(k)(5)).
(2) The term ‘‘medicaid program’’ means a 
State program under title XIX of the Social Security 
Act, including such a program operating under a 
Statewide waiver under section 1115 of such Act. 
(3) The term ‘‘outpatient prescription drug’’ 
has the meaning given the term ‘‘covered outpatient 
drug’’ in section 1927(k)(2) of the Social Security 
Act (42 U.S.C. 1396r-8(k)(2)). 
(4) The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. 
(5) The term ‘‘State’’ has the meaning given 
such term for purposes of title XIX of the Social Se-
curity Act.
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