I
106TH CONGRESS
1ST SESSION
H. R. 664
To provide for substantial reductions in the price of prescription drugs for
Medicare beneficiaries.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 10, 1999
Mr. ALLEN (for himself, Mr. TURNER, Mr. WAXMAN, Mr. BERRY, Mr. STARK,
Mr. SANDERS, Mrs. CAPPS, Mr. TIERNEY, Mr. LAMPSON, Ms.
STABENOW, Mr. DAVIS of Illinois, Mr. KENNEDY of Rhode Island, Ms.
DELAURO, Mr. WEXLER, Mr. FROST, Mr. MCGOVERN, Mr. CUMMINGS,
Mr. THOMPSON of Mississippi, Mr. SANDLIN, Mr. FORD, Mr. BROWN of
Ohio, Mr. WEYGAND, Ms. KILPATRICK, Mr. POMEROY, Mr. BORSKI, Mr.
OLVER, Mrs. THURMAN, Mr. BLUMENAUER, Mr. SERRANO, Mr.
BALDACCI, Mr. MATSUI, Mr. DELAHUNT, Ms. SLAUGHTER, Ms. HOOLEY
of Oregon, Mrs. MCCARTHY of New York, Mr. CRAMER, Mr. HINCHEY,
Mr. FRANK of Massachusetts, Mr. ANDREWS, Mr. MEEHAN, Mr. FILNER,
Mr. KLECZKA, Mr. BARRETT of Wisconsin, Mr. STUPAK, Mr. ABER-
CROMBIE, Mr. ACKERMAN, Mr. LUTHER, Mr. PALLONE, Mr. MEEKS of
New York, Ms. JACKSON-LEE of Texas, Mr. OBEY, Mr. MALONEY of
Connecticut, Mr. KUCINICH, Mr. EVANS, Ms. MCKINNEY, Ms. SANCHEZ,
Mr. BENTSEN, Ms. MILLENDER-MCDONALD, Mr. BISHOP, Mr. SHOWS,
and Mr. BOSWELL) introduced the following bill; which was referred to
the Committee 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 juris-
diction 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 1999’’.
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 the drug manufacturers’ most
favored customers, such as health insurers, health
maintenance organizations, and the Federal Govern-
ment.
(2) On average, older Americans who buy their
own prescription drugs pay twice as much for pre-
scription drugs as the drug manufacturers’ most fa-
vored customers. In some cases, older Americans pay
over 15 times more for prescription drugs than the
most favored customers.
(3) The discriminatory pricing by major drug
manufacturers sustains their annual profits of
$20,000,000,000, but causes financial hardship and
impairs the health and well-being of millions of older
Americans. More than one in eight older Americans
are forced to choose between buying their food and
buying their medicines.
(4) Most federally funded health care programs,
including Medicaid, the Veterans Health Administra-
tion, the Public Health Service, and the Indian
Health Service, obtain prescription drugs for their
beneficiaries at low prices. Medicare beneficiaries are
denied this benefit and cannot obtain their prescrip-
tion drugs at the favorable prices available to other
federally funded health care programs.
(5) Implementation of the policy set forth in
this Act is estimated to reduce prescription drug
prices for Medicare beneficiaries by more than 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 the
price equal to the lower of the following:
(1) The lowest price paid for the covered out-
patient drug by any agency or department of the
United States.
(2) The manufacturer’s best price for the cov-
ered 
outpatient 
drug, 
as 
defined 
in 
section
1927(c)(1)(C) of the Social Security Act (42 U.S.C.
1396r–8(c)(1)(C)).
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 they consider
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) 
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.
(2) 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)).
(3) 
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.
(4) 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)).
(5) 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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