I
105TH CONGRESS
2D SESSION
H. R. 4646
To provide for substantial reductions in the price of prescription drugs for
Medicare beneficiaries.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 26, 1998
Mr. TURNER (for himself, Mr. MALONEY of Connecticut, Ms. CARSON, Mr.
GOODE, Mr. KUCINICH, Mr. EVANS, Mr. LUTHER, Ms. MCKINNEY, Mrs.
MCCARTHY of New York, Mr. MCGOVERN, Mr. STUPAK, Ms. PELOSI,
Mr. SPRATT, Mr. PETERSON of Minnesota, Mr. JOHN, Ms. STABENOW,
Mr. DAVIS of Illinois, Mr. POMEROY, Ms. DEGETTE, Mr. TIERNEY, Mr.
FORD, Mr. FARR of California, Mr. MINGE, Mr. WAXMAN, Mr. BERRY,
Ms. SANCHEZ, Mr. DELAHUNT, Ms. EDDIE BERNICE JOHNSON of Texas,
Mr. JACKSON of Illinois, Ms. HOOLEY of Oregon, Mr. TANNER, Mrs.
CAPPS, Mr. BISHOP, Mr. ENGEL, Mr. BROWN of Ohio, Mr. SAWYER, Ms.
JACKSON-LEE of Texas, Mr. PALLONE, Mr. CLEMENT, Ms. ESHOO, Mr.
WEXLER, Mr. MEEKS of New York, Mr. CONDIT, Mr. BLUMENAUER, Mr.
KIND, Mrs. MALONEY of New York, Mr. MATSUI, Mr. SANDLIN, Mr.
ORTIZ, Mr. STENHOLM, Mr. LAMPSON, Mr. GREEN, Mr. HINOJOSA, Mr.
FROST, Mr. RODRIGUEZ, Mr. BENTSEN, Mr. HALL of Texas, Mr. BOS-
WELL, Mr. WEYGAND, Mrs. THURMAN, Mr. PASCRELL, and Mr.
CRAMER) introduced the following bill; which was referred to the Commit-
tee on 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 provide for substantial reductions in the price of
prescription drugs for Medicare beneficiaries.
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 ‘‘Prescription Drug
Fairness Act’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds the following:
(1) Senior citizens are the major consumers of
prescription drugs in the United States and are pay-
ing the highest prices for prescription drugs.
(2) The discriminatory pricing practices of
major drug manufacturers results in senior citizens
paying over twice the price that drug manufacturers
charge their most-favored customers, such as Health
Maintenance Organizations (HMOs) and hospital
chains.
(3) Medicare beneficiaries without prescription
drug coverage represent the most vulnerable seg-
ment of prescription drug customers. Making pre-
scription drugs available to them at lower prices
would lower the health care costs for this population,
improve the health and well-being of this population
and consequently, lower the cost to the taxpayers of
the Medicare program.
tle the participating pharmacy to purchase any covered
outpatient drug that is listed on the Federal Supply
Schedule of the General Services Administration at the
participating pharmacy discount price for that drug deter-
mined under subsection (d).
(c) QUANTITY OF DRUGS PURCHASED.—An agree-
ment under this section shall permit the participating
pharmacy to purchase under this Act as much of a covered
outpatient drug as is sold by the pharmacy to Medicare
beneficiaries.
(d) PARTICIPATING PHARMACY DISCOUNT PRICE.—
(1) IN GENERAL.—The Secretary shall deter-
mine a participating pharmacy discount price for
each covered outpatient drug.
(2) DETERMINATION.—The participating phar-
macy discount price for a covered outpatient drug
shall be determined by adding—
(A) the price at which the drug is available
to Federal agencies from the Federal Supply
Schedule under section 8126 of title 38, United
States Code; plus
(B) an amount that reflects the adminis-
trative costs incurred by the Secretary in ad-
ministering this Act.
(e) SPECIAL RULE FOR MEDICARE BENEFICIARIES
ENROLLED IN A HOSPICE PROGRAM.—In the case of a
Medicare beneficiary who makes an election to receive hos-
pice care under section 1812(d)(1) of the Social Security
Act (42 U.S.C. 1395d(d)(1)) provided by, or under ar-
rangements made by, a particular hospice program under
part A of title XVIII of such Act, the hospice program
may enter into agreements with a participating pharmacy
to procure for and deliver to such a Medicare beneficiary
covered outpatient drugs at a reduced price under this sec-
tion.
SEC. 4. ADMINISTRATION.
(a) IN GENERAL.—The Secretary shall administer
this Act in a manner that uses existing methods of obtain-
ing and distributing drugs to the maximum extent pos-
sible, consistent with efficiency and cost effectiveness.
(b) REGULATIONS.—The Secretary shall issue such
regulations as may be necessary to implement this Act.
SEC. 5. REPORTS TO CONGRESS REGARDING EFFECTIVE-
NESS OF ACT.
(a) IN GENERAL.—Not later than 2 years after the
date of the enactment of this Act, and annually thereafter,
the Secretary shall report to the Congress regarding the
effectiveness of this Act in—
(1) protecting Medicare beneficiaries from dis-
criminatory pricing by drug manufacturers; and
(2) making prescription drugs available to
Medicare beneficiaries at substantially reduced
prices.
(b) CONSULTATION.—In preparing such reports, the
Secretary shall consult with public health experts, affected
industries, organizations representing consumers and
older Americans, and other interested persons.
(c) RECOMMENDATIONS.—The Secretary shall in-
clude in such reports any recommendations they consider
appropriate for changes in this Act to further reduce the
cost of covered outpatient drugs to Medicare beneficiaries.
SEC. 6. DEFINITIONS.
In this Act:
(1) COVERED OUTPATIENT DRUG.—The term
‘‘covered outpatient drug’’ has the meaning given
that term in section 1927(k)(2) of the Social Secu-
rity Act (42 U.S.C. 1396r–8(k)(2)).
(2) 
MEDICARE
BENEFICIARY.—The 
term
‘‘Medicare beneficiary’’ means an individual entitled
to benefits under part A of title XVIII of the Social
Security Act or enrolled under part B of such title,
or both.
(3) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
SEC. 7. EFFECTIVE DATE.
The Secretary shall implement this Act as expedi-
tiously as practicable and in a manner consistent with the
obligations of the United States.
Æ