I 
108TH 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 
MARCH 20, 2003
Mr. ALLEN (for himself, Mr. BROWN of Ohio, Mr. BERRY, Ms. SCHAKOWSKY, 
Mr. CONYERS, Ms. ROYBAL-ALLARD, Mr. STARK, Ms. CORRINE BROWN 
of Florida, Mr. SERRANO, Mr. WAXMAN, Mr. KLECZKA, Mr. PALLONE, 
Mrs. MCCARTHY of New York, Ms. NORTON, Mr. KENNEDY of Rhode Is-
land, Mr. HINCHEY, Mr. PASTOR, Mr. CASE, Ms. WOOLSEY, Mr. GREEN 
of Texas, Mrs. MALONEY, Mr. OBERSTAR, Mr. FROST, Mr. WEXLER, Mr. 
SABO, Mr. NADLER, Mr. MCNULTY, Mr. MICHAUD, and Mr. KUCINICH) 
introduced the following bill; which was referred to the Committee on En-
ergy 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 jurisdic-
tion 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 2003’’.
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 
the effect of reducing the amount realized 
by the manufacturer on the sale of the 
drugs; and 
(ii) adjustments for any differences in 
dosage, formulation, or other relevant 
characteristics of the drugs. 
(B) EXEMPT
TRANSACTIONS.—The Sec-
retary may, by regulation, exempt from the cal-
culation of the average foreign price of a drug
those prices realized by a manufacturer in 
transactions that are entered into for charitable 
purposes, for research purposes, or under other 
unusual circumstances, if the Secretary deter-
mines that the exemption is in the public inter-
est and is consistent with the purposes of this 
Act. 
(2) COVERED
FOREIGN
NATION.—The term 
‘‘covered foreign nation’ means Canada, France, 
Germany, Italy, Japan, and the United Kingdom. 
(3) 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)). 
(4) DEBAR.—The term ‘‘debar’’ means to ex-
clude, pursuant to established administrative proce-
dures, from Government contracting and subcon-
tracting for a specified period of time commensurate 
with the seriousness of the failure or offense or the 
inadequacy of performance. 
(5) HOSPICE
PROGRAM.—The term ‘‘hospice 
program’’ has the meaning given that term under 
section 1861(dd)(2) of the Social Security Act (42 
U.S.C. 1395x(dd)(2)).
(6) 
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. 
(7) 
PARTICIPATING
MANUFACTURER.—The 
term ‘‘participating manufacturer’’ means any man-
ufacturer of drugs or biologicals that, on or after the 
date of the enactment of this Act, enters into a con-
tract or agreement with the United States for the 
sale or distribution of covered outpatient drugs to 
the United States. 
(8) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
SEC. 8. 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.
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