SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medicare Prescription 
Drug Affordability Act of 2008’’. 
SEC. 2. LIMITING MEDICARE PART D COST INCREASES TO 
THE SOCIAL SECURITY COST-OF-LIVING IN-
CREASE. 
(a) IN GENERAL.—Section 1860D–11(e)(2) of the 
Social Security Act (42 U.S.C. 1395w–111) is amended 
by adding at the end the following new subparagraph: 
‘‘(E) BID AMOUNT INCREASE BY NO MORE 
THAN
SOCIAL
SECURITY
COST-OF-LIVING
IN-
CREASE.— 
‘‘(i) IN GENERAL.—The Secretary de-
termines that the amount of the bid sub-
mitted for the plan year under subsection 
(b) is not greater than— 
‘‘(I) the amount of the bid ap-
proved for such plan for the previous 
plan year, increased by 
‘‘(II) the SS COLA percentage. 
‘‘(ii) EXCEPTION FOR A PLAN WITH 
NO PREVIOUS PLAN YEAR.—The require-
ment of clause (i) shall not apply with re-
spect to a plan for which there was no pre-
vious plan year. 
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‘‘(iii) SS 
COLA
PERCENTAGE
DE-
FINED.—For purposes of this subpara-
graph, the term ‘SS COLA percentage’ 
with respect to a plan year in a calendar 
year is the percentage increase under sec-
tion 215(i) in primary insurance amounts 
effective for December of the second pre-
vious calendar year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply with respect to plan years begin-
ning on or after January 1, 2009. 
SEC. 3. NEGOTIATION OF LOWER COVERED PART D DRUG 
PRICES ON BEHALF OF MEDICARE BENE-
FICIARIES. 
(a) NEGOTIATION BY HHS.—Section 1860D–11 of 
the Social Security Act (42 U.S.C. 1395w–111) is amend-
ed by striking subsection (i) (relating to noninterference) 
and inserting the following: 
‘‘(i) NEGOTIATION OF LOWER DRUG PRICES.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Secretary shall negotiate with 
pharmaceutical manufacturers the prices (including 
discounts, rebates, and other price concessions) that 
may be charged to PDP sponsors and MA organiza-
tions for covered part D drugs for part D eligible in-
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dividuals who are enrolled under a prescription drug 
plan or under an MA–PD plan. 
‘‘(2) 
NO
CHANGE
IN
RULES
FOR 
FORMULARIES.— 
‘‘(A) IN GENERAL.—Nothing in paragraph 
(1) shall be construed to authorize the Sec-
retary to establish or require a particular for-
mulary. 
‘‘(B) CONSTRUCTION.—Subparagraph (A) 
shall not be construed as affecting the Sec-
retary’s authority to ensure appropriate and 
adequate access to covered part D drugs under 
prescription drug plans and under MA–PD 
plans, including compliance of such plans with 
formulary requirements under section 1860D– 
4(b)(3). 
‘‘(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as preventing the sponsor 
of a prescription drug plan, or an organization offer-
ing an MA–PD plan, from obtaining a discount or 
reduction of the price for a covered part D drug 
below the price negotiated under paragraph (1). 
‘‘(4) SEMI-ANNUAL
REPORTS
TO
THE
CON-
GRESS.—Not later than June 1, 2008, and every six 
months thereafter, the Secretary shall submit to the 
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Committees on Ways and Means, Energy and Com-
merce, and Oversight and Government Reform of 
the House of Representatives and the Committee on 
Finance of the Senate a report on negotiations con-
ducted by the Secretary to achieve lower prices for 
Medicare beneficiaries, and the prices and price dis-
counts achieved by the Secretary as a result of such 
negotiations.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act and shall first apply to negotiations and 
prices for plan years beginning on January 1, 2009. 
Æ 
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