I
107TH CONGRESS
1ST SESSION
H. R. 1400
To provide for substantial reductions in the price of prescription drugs for
Medicare beneficiaries.
IN THE HOUSE OF REPRESENTATIVES
APRIL 4, 2001
Mr. ALLEN (for himself, Mr. WAXMAN, Mr. STARK, Mr. BERRY, Mr. BONIOR,
Mr. FROST, Mr. OBEY, Mrs. THURMAN, Mr. DOGGETT, Mr. BROWN of
Ohio, Mr. GREEN of Texas, Ms. DELAURO, Mr. PALLONE, Mr. SHOWS,
Mr. SANDERS, Ms. SCHAKOWSKY, Mr. CROWLEY, Mr. HINCHEY, Mr.
BALDACCI, Mr. ABERCROMBIE, Mr. ANDREWS, Mr. BACA, Mr. BAIRD,
Ms. BALDWIN, Mr. BARRETT, Ms. BERKLEY, Mr. BLAGOJEVICH, Mr.
BLUMENAUER, Mr. BORSKI, Mr. BOYD, Mr. BRADY of Pennsylvania, Ms.
BROWN of Florida, Ms. CARSON of Indiana, Mrs. CLAYTON, Mr. CLEM-
ENT, Mr. CONYERS, Mr. CUMMINGS, Mr. DAVIS of Illinois, Mr. DEFAZIO,
Ms. DEGETTE, Mr. DELAHUNT, Mr. EVANS, Mr. FALEOMAVAEGA, Mr.
FILNER, Mr. HASTINGS of Florida, Ms. HOOLEY of Oregon, Ms. JACK-
SON-LEE of Texas, Mr. JEFFERSON, Mrs. JONES of Ohio, Ms. KAPTUR,
Mr. KENNEDY of Rhode Island, Mr. KILDEE, Mr. KLECZKA, Mr.
KUCINICH, Mr. LAMPSON, Mr. LANTOS, Mr. LARSON of Connecticut, Ms.
LEE, Mr. LEWIS of Georgia, Mrs. LOWEY, Mrs. MCCARTHY of New York,
Ms. MCCOLLUM, Mr. MCGOVERN, Ms. MCKINNEY, Mr. MCNULTY, Mrs.
MALONEY of New York, Mr. MARKEY, Mr. MASCARA, Mr. MEEHAN, Mrs.
MEEK of Florida, Mr. MEEKS of New York, Ms. MILLENDER-MCDON-
ALD, Mr. GEORGE MILLER of California, Mrs. MINK of Hawaii, Mr.
MOAKLEY, Mr. NADLER, Mrs. NAPOLITANO, Ms. NORTON, Mr. OBER-
STAR, Mr. OLVER, Mr. ORTIZ, Mr. OWENS, Mr. PASTOR, Mr. PAYNE, Ms.
PELOSI, Mr. PHELPS, Mr. POMEROY, Mr. RAHALL, Mr. REYES, Ms. RIV-
ERS, Ms. ROYBAL-ALLARD, Mr. SANDLIN, Mr. SAYWER, Mr. SERRANO,
Ms. SLAUGHTER, Mr. STRICKLAND, Mr. STUPAK, Mr. THOMPSON of Mis-
sissippi, Mr. TIERNEY, Mr. UDALL of New Mexico, Mr. UNDERWOOD,
Ms. VELA´ZQUEZ, Ms. WATERS, Mr. WEINER, Mr. WEXLER, Ms. WOOL-
SEY, and Mr. WYNN) introduced the following bill; which was referred to
the Committee on Energy and Commerce, and in addition to the Com-
mittee 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 for Seniors Act of 2001’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds the following:
(1) Manufacturers of prescription drugs engage
in price discrimination practices that compel many
older Americans to pay substantially more for pre-
scription drugs than consumers in foreign nations
and the drug manufacturers’ most favored U.S. cus-
tomers, such as health insurers, health maintenance
organizations, and the Federal Government.
(2) Older Americans who buy their own pre-
scription drugs often pay twice as much for prescrip-
tion drugs as consumers in foreign nations and the
drug manufacturers’ most favored U.S. customers.
In some cases, older Americans pay 10 times more
for prescription drugs than such customers.
(3) The discriminatory pricing by major drug
manufacturers sustains their high profits (for exam-
ple, $27,300,000,000 in 1999), but causes financial
hardship and impairs the health and well-being of
millions of older Americans. Many older Americans
are forced to choose between buying their food and
buying their medicines.
(4) Foreign nations and U.S. federally funded
health care programs use purchasing power to ob-
tain prescription drugs at low prices. Medicare bene-
ficiaries are denied this benefit and cannot obtain
their prescription drugs at the lower prices available
to such nations and programs.
(5) Implementation of the policy set forth in
this Act will reduce prices for brand name prescrip-
tion drugs for many Medicare beneficiaries by an av-
erage of 40 percent.
(6) In addition to substantially lowering the
costs of prescription drugs for older Americans, im-
plementation of the policy set forth in this Act will
significantly improve the health and well-being of
older Americans and lower the costs to the Federal
taxpayer of the Medicare program.
(7) Older Americans who are terminally ill and
receiving hospice care services represent some of the
most vulnerable individuals in our nation. Making
prescription drugs available to Medicare beneficiaries
under the care of Medicare-certified hospices will as-
sist in extending the benefits of lower prescription
drug prices to those most vulnerable and in need.
(b) PURPOSE.—The purpose of this Act is to protect
Medicare beneficiaries from discriminatory pricing by drug
manufacturers and to make prescription drugs available
to Medicare beneficiaries at substantially reduced prices.
SEC. 3. PARTICIPATING MANUFACTURERS.
(a) IN GENERAL.—Each participating manufacturer
of a covered outpatient drug shall make available for pur-
chase by each pharmacy such covered outpatient drug in
the amount described in subsection (b) at the price de-
scribed in subsection (c).
(b) DESCRIPTION
OF AMOUNT
OF DRUGS.—The
amount of a covered outpatient drug that a participating
manufacturer shall make available for purchase by a phar-
macy is an amount equal to the aggregate amount of the
covered outpatient drug sold or distributed by the phar-
macy to Medicare beneficiaries.
(c) DESCRIPTION OF PRICE.—The price at which a
participating manufacturer shall make a covered out-
patient drug available for purchase by a pharmacy is a
price no greater than the manufacturer’s average foreign
price.
(d) ENFORCEMENT.—The United States shall debar
a manufacturer of drugs or biologicals that does not com-
ply with the provisions of this Act.
SEC. 4. SPECIAL PROVISION WITH RESPECT TO HOSPICE
PROGRAMS.
For purposes of determining the amount of a covered
outpatient drug that a participating manufacturer shall
make available for purchase by a pharmacy under section
3, there shall be included in the calculation of such
amount the amount of the covered outpatient drug sold
or distributed by a pharmacy to a hospice program. In
calculating such amount, only amounts of the covered out-
patient drug furnished to a Medicare beneficiary enrolled
in the hospice program shall be included.
SEC. 5. ADMINISTRATION.
The Secretary shall issue such regulations as may be
necessary to implement this Act.
SEC. 6. 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 the Secretary
considers appropriate for changes in this Act to further
reduce the cost of covered outpatient drugs to Medicare
beneficiaries.
SEC. 7. DEFINITIONS.
In this Act:
(1) AVERAGE FOREIGN PRICE.—
(A) IN GENERAL.—The term ‘‘average for-
eign price’’ means, with respect to a covered
outpatient drug, the average price that the
manufacturer of the drug realizes on the sale of
drugs with the same active ingredient or ingre-
dients that are consumed in covered foreign na-
tions, taking into account—
(i) any rebate, contract term or condi-
tion, or other arrangement (whether with
the purchaser or other persons) that has