I
105TH CONGRESS
2D SESSION
H. R. 4419
To amend the Public Health Service Act and the Employee Retirement
Income Security Act of 1974 to permit physicians to prescribe non-
formulary drugs when medically indicated.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 6, 1998
Mr. KLINK introduced the following bill; which was referred to the Committee
on Commerce, and in addition to the Committee on Education and the
Workforce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
A BILL
To amend the Public Health Service Act and the Employee
Retirement Income Security Act of 1974 to permit physi-
cians to prescribe non-formulary drugs when medically
indicated.
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 Guarantee
Act of 1998’’.
SEC. 2. ACCESS TO NEEDED PRESCRIPTION DRUGS.
(a) GROUP HEALTH PLANS.—
scribes a non-formulary alternative prescription drug, a
group health plan, or health insurance issuer may increase
the copayment rate for such alternative to twice the rate
applicable to comparable prescription drugs included in
the formulary.
‘‘(c) COVERAGE
OF APPROVED DRUGS.—A group
health plan (or health insurance coverage offered in con-
nection with such a plan) that provides any coverage of
prescription drugs shall not deny coverage of such a drug
if the use is included in the labeling authorized by the
application in effect for the drug pursuant to subsection
(b) or (j) of section 505 of the Federal Food, Drug, and
Cosmetic Act; or under subsection (f) of such section, or
an application approved under section 515 of such Act.
‘‘(d) NONDISCRIMINATION.—A group health plan, or
health insurance issuer that offers health insurance cov-
erage, shall not discriminate in participation, reimburse-
ment, or indemnification against a health professional,
who is acting within the scope of the health professional’s
license or certification under applicable State law, solely
based on the extent, type, or pattern of prescription drugs.
‘‘(e) ANY WILLING PHARMACIST.—A group health
plan, or health insurance issuer that offers health insur-
ance coverage, shall not exclude a pharmacist from its net-
work of providers if such pharmacist is willing to enter
into a contract with the plan or issuer to provide drugs
at the rate prescribed by the plan or issuer.
‘‘(f) NOTICE.—A group health plan under this part
shall comply with the notice requirement under section
713(f) of the Employee Retirement Income Security Act
of 1974 with respect to the requirements of this section
as if such section applied to such plan.’’.
(B) CONFORMING
AMENDMENT.—Section
2723(c) of such Act (42 U.S.C. 300gg–23(c)) is
amended by striking ‘‘section 2704’’ and insert-
ing ‘‘sections 2704 and 2706’’.
(2) AMENDMENTS TO THE EMPLOYEE RETIRE-
MENT INCOME SECURITY ACT OF 1974.—
(A) IN GENERAL.—Subpart B of part 7 of
subtitle B of title I of the Employee Retirement
Income Security Act of 1974 is amended by
adding at the end the following new section:
‘‘SEC. 713. ACCESS TO NEEDED PRESCRIPTION DRUGS.
‘‘(a) REQUIREMENT.—If a group health plan, or
health insurance issuer that offers health insurance cov-
erage in connection with a group health plan, provides
benefits with respect to prescription drugs but the plan
or coverage limits such benefits to (or provides more favor-
able benefits with respect to) drugs included in a for-
mulary, the plan or issuer shall—
‘‘(1) upon request, make available to the public
in printed form a description of the nature of any
formulary restrictions; and
‘‘(2) provide for exceptions from the formulary
restrictions limitation when the plan or beneficiary’s
physician, subject to reasonable review by the plan
or issuer, determines that a non-formulary alter-
native is medically beneficial based on a therapeutic
difference to the patient involved.
‘‘(b) INCREASE COPAYMENTS PERMITTED FOR NON-
FORMULARY DRUGS.—If a participating physician pre-
scribes a non-formulary alternative prescription drug, a
group health plan, or health insurance issuer may increase
the co-payment rate for such alternative to twice the rate
applicable to comparable prescription drugs included in
the formulary.
‘‘(c) COVERAGE
OF APPROVED DRUGS.—A group
health plan (or health insurance coverage offered in con-
nection with such a plan) that provides any coverage of
prescription drugs shall not deny coverage of such a drug
if the use is included in the labeling authorized by the
application in effect for the drug pursuant to subsection
(b) or (j) of section 505 of the Federal Food, Drug, and
Cosmetic Act; or under subsection (f) of such section, or
an application approved under section 515 of such Act.
‘‘(d) NONDISCRIMINATION.—A group health plan, or
health insurance issuer that offers health insurance cov-
erage, shall not discriminate in participation, reimburse-
ment, or indemnification against a health professional,
who is acting within the scope of the health professional’s
license or certification under applicable State law, solely
based on the extent, type, or pattern of prescription drugs.
‘‘(e) ANY WILLING PHARMACIST.—A group health
plan, or health insurance issuer that offers health insur-
ance coverage, shall not exclude a pharmacist from its net-
work of providers if such pharmacist is willing to enter
into a contract with the plan or issuer to provide drugs
at the rate prescribed by the plan or issuer.
‘‘(f) NOTICE UNDER GROUP HEALTH PLAN.—The
imposition of the requirements of this section shall be
treated as a material modification in the terms of the plan
described in section 102(a)(1), for purposes of assuring
notice of such requirements under the plan; except that
the summary description required to be provided under the
last sentence of section 104(b)(1) with respect to such
modification shall be provided by not later than 60 days
after the first day of the first plan year in which such
requirements apply.’’.
(B) CONFORMING AND CLERICAL AMEND-
MENTS.—(i) Section 731(c) of such Act (29
U.S.C. 1191(c)) is amended by striking ‘‘sec-
tion 711’’ and inserting ‘‘sections 711 and
713’’.
(ii) Section 732(a) of such Act (29 U.S.C.
1191a(a)) is amended by striking ‘‘section 711’’
and inserting ‘‘sections 711 and 713’’.
(iii) The table of contents in section 1 of
such Act is amended by inserting after the item
relating to section 712 the following new item:
‘‘Sec. 713. Access to needed prescription drugs.’’.
(b) INDIVIDUAL HEALTH INSURANCE.—
(1) IN GENERAL.—Subpart 3 of part B of title
XXVII of the Public Health Service Act is amended
by adding at the end the following new section:
‘‘SEC. 2752. ACCESS TO NEEDED PRESCRIPTION DRUGS.
‘‘(a) IN GENERAL.—The provisions of section 2706
shall apply to health insurance coverage offered by a
health insurance issuer in the individual market in the
same manner as they apply to health insurance coverage
offered by a health insurance issuer in connection with a
group health plan in the small or large group market.
‘‘(b) NOTICE.—A health insurance issuer under this
part shall comply with the notice requirement under sec-
tion 713(f) of the Employee Retirement Income Security
Act of 1974 with respect to the requirements referred to
in subsection (a) as if such section applied to such issuer
and such issuer were a group health plan.’’.
(2) 
CONFORMING
AMENDMENT.—Section
2762(b)(2) of such Act (42 U.S.C. 300gg–62(b)(2))
is amended by striking ‘‘section 2751’’ and inserting
‘‘sections 2751 and 2752’’.
(d) EFFECTIVE DATES.—
(1) GROUP MARKET REFORMS.—
(A) IN GENERAL.—The amendments made
by subsection (a) shall apply with respect to
plan years beginning on or after January 1,
1999.
(B) SPECIAL RULE FOR COLLECTIVE BAR-
GAINING AGREEMENTS.—In the case of a group
health plan maintained pursuant to 1 or more
collective bargaining agreements between em-
ployee representatives and 1 or more employers
ratified before such date, the amendments made
by such subsections shall not apply to plan
years beginning before the later of—
(i) the date on which the last collec-
tive bargaining agreements relating to the
plan terminates (determined without re-
gard to any extension thereof agreed to
after the date of enactment of this Act), or
(ii) January 1, 1999.
For purposes of clause (i), any plan amendment
made pursuant to a collective bargaining agree-
ment relating to the plan which amends the
plan solely to conform to any requirement
added by such clause shall not be treated as a
termination of such collective bargaining agree-
ment.
(2) INDIVIDUAL MARKET AMENDMENTS.—The
amendments made by subsection (c) shall apply with
respect to health insurance coverage offered, sold,
issued, renewed, in effect, or operated in the individ-
ual market on or after January 1, 1999.
(e) COORDINATED REGULATIONS.—Section 104(1) of
Health Insurance Portability and Accountability Act of
1996 is amended by striking ‘‘this subtitle (and the
amendments made by this subtitle and section 401)’’ and
inserting ‘‘the provisions of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of
1974, the provisions of parts A and C of title XXVII of
the Public Health Service Act, and chapter 100 of the In-
ternal Revenue Code of 1986’’.
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