I 
108TH CONGRESS 
2D SESSION 
H. R. 4512 
To amend part D of title XVIII of the Social Security Act to authorize 
the Secretary of Health and Human Services to negotiate for lower 
prices for Medicare prescription drugs and to eliminate the gap in cov-
erage of Medicare prescription drug benefits, to authorize the Secretary 
of Health and Human Services to promulgate regulations for the re-
importation of prescription drugs, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 3, 2004 
Mr. WU introduced the following bill; which was referred to the Committee 
on Energy 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 juris-
diction of the committee concerned 
A BILL 
To amend part D of title XVIII of the Social Security 
Act to authorize the Secretary of Health and Human 
Services to negotiate for lower prices for Medicare pre-
scription drugs and to eliminate the gap in coverage 
of Medicare prescription drug benefits, to authorize the 
Secretary of Health and Human Services to promulgate 
regulations for the reimportation of prescription drugs, 
and for other purposes. 
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 ‘‘Medicare Prescription 
Drug Improvement Act’’. 
TITLE 
I—IMPROVEMENT 
OF 
MEDICARE 
PRESCRIPTION 
DRUG BENEFITS 
SEC. 101. PERMITTING THE NEGOTIATION OF FAIR PRICES 
FOR MEDICARE PRESCRIPTION DRUGS ON 
BEHALF OF MEDICARE BENEFICIARIES. 
Section 1860D–11 of the Social Security Act, as 
added by section 101(a) of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Pub-
lic Law 108–173), is amended by striking subsection (i) 
(relating to noninterference) and by inserting the fol-
lowing: 
‘‘(i) AUTHORITY TO NEGOTIATE PRICES WITH MAN-
UFACTURERS.—In order to ensure that beneficiaries en-
rolled under prescription drug plans, MA–PD plans, and 
qualified retiree prescription drug plans pay the lowest 
possible price, the Secretary shall have authority similar 
to that of the Secretary of Veterans Affairs, Secretary of 
Defense, and the heads of other Federal agencies and de-
partments that purchase prescription drugs in bulk to ne-
gotiate contracts with manufacturers of covered part D 
drugs, consistent with the requirements and in further-
ance of the goals of providing quality care and containing 
costs under this part.’’. 
SEC. 102. ELIMINATION OF GAP IN COVERAGE OF PRE-
SCRIPTION DRUG BENEFITS. 
(a) IN GENERAL.—Section 1860D–2(b) of the Social 
Security Act (42 U.S.C. 1395w–102(b)), as added by sec-
tion 101(a) of the Medicare Prescription Drug, Improve-
ment, and Modernization Act of 2003 (Public Law 108– 
173), is amended by striking paragraph (3) and inserting 
the following: 
‘‘(3) Repealed.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1860D–2 of the Social Security Act 
(42 U.S.C. 1395w–102) is amended— 
(A) in subsection (a)(2)(A)(i)(I), by strik-
ing ‘‘, or an increase in the initial coverage 
limit with respect to covered part D drugs’’; 
(B) in subsection (b)(2)(A), by striking 
‘‘and up to the initial coverage limit under 
paragraph (3)’’; 
(C) in subsection (b)(4)(C)(i)— 
(i) by striking the comma after ‘‘para-
graph (1)’’ and inserting ‘‘and’’; and 
(ii) by striking ‘‘, and for amounts for 
which benefits are not provided because of
the application of the initial coverage limit 
described in paragraph (3)’’; 
(D) in subsection (c)(1), by striking sub-
paragraph (C); and 
(E) in subsection (d)(1)(A), by striking ‘‘or 
an initial coverage limit (described in subsection 
(b)(3))’’. 
(2) Section 1860D–4(a)(4)(B) of such Act (42 
U.S.C. 1395w–104(a)(4)(B)) is amended to read as 
follows: 
‘‘(B) when prescription drug benefits are 
provided under this part, a notice of the bene-
fits in relation to the annual out-of-pocket 
threshold for the current year.’’. 
(3)(A) Section 1860D–14(a) of such Act (42 
U.S.C. 1395w–114(a)) is amended— 
(i) in paragraph (1), by striking subpara-
graph (C) and redesignating subparagraphs (D) 
and (E) as subparagraphs (C) and (D), respec-
tively; 
(ii) in paragraph (2), by striking subpara-
graph (C) and redesignating subparagraphs (D) 
and (E) as subparagraphs (C) and (D), respec-
tively; and
(iii) in paragraph (4)(A) in the matter pre-
ceding clause (i), by striking ‘‘paragraph 
(1)(D)(ii)’’ 
and 
inserting 
‘‘paragraph 
(1)(C)(ii)’’. 
(B) Section 1860D–14(c)(1) of such Act (42 
U.S.C. 1395w–114(c)(1)) is amended in the second 
sentence by striking ‘‘subsections (a)(1)(D) and 
(a)(2)(E)’’ and inserting ‘‘subsections (a)(1)(C) and 
(a)(2)(D)’’. 
(C) Section 1860D–15(e)(1)(B) of such Act (42 
U.S.C. 1395w–115(e)(1)(B)) is amended by striking 
‘‘paragraphs (1)(D) and (2)(E)’’ and inserting 
‘‘paragraphs (1)(C) and (2)(D)’’. 
(4)(A) Section 1860D–41(a)(6) of such Act (42 
U.S.C. 1395w–151(a)(6)) is amended by striking 
paragraph (6) and redesignating paragraphs (7) 
through (18) as paragraphs (6) through (17), re-
spectively. 
(B) Section 1860D–1(a)(1)(A) of such Act (42 
U.S.C. 1395w–101(a)(1)(A)) is amended by striking 
‘‘1860D–41(a)(14)’’ 
and 
inserting 
‘‘1860D– 
41(a)(13)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in the enact-
ment of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (Public law 108–173). 
TITLE II—IMPORTATION OF 
PRESCRIPTION DRUGS 
SEC. 201. SHORT TITLE. 
This title may be cited as the ‘‘Pharmaceutical Mar-
ket Access Act of 2004’’. 
SEC. 202. IMPORTATION OF PRESCRIPTION DRUGS. 
(a) NULLIFICATION
OF
CERTAIN
AMENDMENTS 
MADE BY PUBLIC LAW 108–173.—The Federal Food, 
Drug, and Cosmetic Act is amended— 
(1) in section 804 (21 U.S.C. 384), by amend-
ing the section to read as if section 1121(a) of Pub-
lic Law 108–173 had not been enacted; 
(2) in section 301 (21 U.S.C. 331), by amend-
ing the section to read as if section 1121(b)(1) of 
Public Law 108–173 had not been enacted; and 
(3) in section 303 (21 U.S.C. 333), by amend-
ing the section to read as if section 1121(b)(2) of 
Public Law 108–173 had not been enacted. 
(b) IMPORTATION OF PRESCRIPTION DRUGS.—Sec-
tion 804 of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 384), as amended by subsection (a)(1) of this 
section, is amended— 
(1) in subsection (a)—
(A) by striking ‘‘The Secretary’’ and in-
serting ‘‘Not later than 180 days after the date 
of the enactment of the Pharmaceutical Market 
Access Act of 2003, the Secretary’’; and 
(B) by striking ‘‘pharmacists and whole-
salers’’ and inserting ‘‘pharmacists, wholesalers, 
and qualifying individuals’’; 
(2) in subsection (b)— 
(A) by amending paragraph (1) to read as 
follows: 
‘‘(1) require that each covered product imported 
pursuant to such subsection complies with sections 
501, 502, and 505, and other applicable require-
ments of this Act; and’’; 
(B) in paragraph (2), by striking ‘‘, includ-
ing subsection (d); and’’ and inserting a period; 
and 
(C) by striking paragraph (3); 
(3) in subsection (c), by inserting ‘‘by phar-
macists and wholesalers (but not qualifying individ-
uals)’’ after ‘‘importation of covered products’’; 
(4) in subsection (d)— 
(A) by striking paragraphs (3) and (10);
(B) in paragraph (5), by striking ‘‘, includ-
ing the professional license number of the im-
porter, if any’’; 
(C) in paragraph (6)— 
(i) in subparagraph (C), by inserting 
‘‘(if required under subsection (e))’’ before 
the period; 
(ii) in subparagraph (D), by inserting 
‘‘(if required under subsection (e))’’ before 
the period; and 
(iii) in subparagraph (E), by striking 
‘‘labeling’’; 
(D) in paragraph (7)— 
(i) in subparagraph (A), by inserting 
‘‘(if required under subsection (e))’’ before 
the period; and 
(ii) by amending subparagraph (B) to 
read as follows: 
‘‘(B) Certification from the importer or 
manufacturer of such product that the product 
meets all requirements of this Act.’’; and 
(E) 
by 
redesignating 
paragraphs 
(4) 
through (9) as paragraphs (3) through (8), re-
spectively;
(5) by amending subsection (e) to read as fol-
lows: 
‘‘(e) TESTING.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
regulations under subsection (a) shall require that 
testing referred to in paragraphs (5) through (7) of 
subsection (d) be conducted by the importer of the 
covered product, unless the covered product is a pre-
scription drug subject to the requirements of section 
505C for counterfeit-resistant technologies. 
‘‘(2) EXCEPTION.—The testing requirements of 
paragraphs (5) through (7) of subsection (d) shall 
not apply to an importer unless the importer is a 
wholesaler.’’; 
(6) in subsection (f), by striking ‘‘or designated 
by the Secretary, subject to such limitations as the 
Secretary determines to be appropriate to protect 
the public health’’; 
(7) in subsection (g)— 
(A) by striking ‘‘counterfeit or’’; and 
(B) by striking ‘‘and the Secretary deter-
mines that the public is adequately protected 
from counterfeit and violative covered products 
being imported pursuant to subsection (a)’’; 
(8) in subsection (i)(1)—
(A) by amending subparagraph (A) to read 
as follows: 
‘‘(A) IN
GENERAL.—The Secretary shall 
conduct, or contract with an entity to conduct, 
a study on the imports permitted pursuant to 
subsection (a), including consideration of the 
information received under subsection (d). In 
conducting such study, the Secretary or entity 
shall evaluate the compliance of importers with 
regulations under subsection (a), and the inci-
dence of shipments pursuant to such sub-
section, if any, that have been determined to be 
misbranded or adulterated, and determine how 
such compliance contrasts with the incidence of 
shipments of prescription drugs transported 
within the United States that have been deter-
mined to be misbranded or adulterated.’’; and 
(B) in subparagraph (B), by striking ‘‘Not 
later than 2 years after the effective date of 
final regulations under subsection (a),’’ and in-
serting ‘‘Not later than 18 months after the 
date of the enactment of the Pharmaceutical 
Market Access Act of 2003,’’; 
(9) in subsection (k)(2)—
(A) by redesignating subparagraphs (D) 
and (E) as subparagraphs (E) and (F), respec-
tively; and 
(B) by inserting after subparagraph (C) 
the following: 
‘‘(D) The term ‘qualifying individual’ 
means an individual who is not a pharmacist or 
a wholesaler.’’; and 
(10) by striking subsections (l) and (m). 
SEC. 
203. 
USE 
OF 
COUNTERFEIT-RESISTANT 
TECH-
NOLOGIES TO PREVENT COUNTERFEITING. 
(a) MISBRANDING.—Section 502 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 352; deeming 
drugs and devices to be misbranded) is amended by adding 
at the end the following: 
‘‘(w) If it is a drug subject to section 503(b), unless 
the packaging of such drug complies with the require-
ments of section 505C for counterfeit-resistant tech-
nologies.’’. 
(b) REQUIREMENTS.—Title V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend-
ed by inserting after section 505B the following: 
‘‘SEC. 505C. COUNTERFEIT-RESISTANT TECHNOLOGIES. 
‘‘(a) INCORPORATION OF COUNTERFEIT-RESISTANT 
TECHNOLOGIES
INTO
PRESCRIPTION
DRUG
PACK-
AGING.—The Secretary shall require that the packaging 
of any drug subject to section 503(b) incorporate— 
‘‘(1) overt optically variable counterfeit-resist-
ant technologies that are described in subsection (b) 
and comply with the standards of subsection (c); or 
‘‘(2) technologies that have an equivalent func-
tion of security, as determined by the Secretary. 
‘‘(b) ELIGIBLE TECHNOLOGIES.—Technologies de-
scribed in this subsection— 
‘‘(1) shall be visible to the naked eye, providing 
for visual identification of product authenticity with-
out the need for readers, microscopes, lighting de-
vices, or scanners; 
‘‘(2) shall be similar to that used by the Bureau 
of Engraving and Printing to secure United States 
currency; 
‘‘(3) shall be manufactured and distributed in a 
highly secure, tightly controlled environment; and 
‘‘(4) should incorporate additional layers of 
non-visible covert security features up to and includ-
ing forensic capability. 
‘‘(c) STANDARDS FOR PACKAGING.— 
‘‘(1) MULTIPLE ELEMENTS.—For the purpose 
of making it more difficult to counterfeit the pack-
aging of drugs subject to section 503(b), manufac-
turers of the drugs shall incorporate the technologies 
described in subsection (b) into multiple elements of 
the physical packaging of the drugs, including blister 
packs, shrink wrap, package labels, package seals, 
bottles, and boxes. 
‘‘(2) LABELING
OF
SHIPPING
CONTAINER.— 
Shipments of drugs described in subsection (a) shall 
include a label on the shipping container that incor-
porates the technologies described in subsection (b), 
so that officials inspecting the packages will be able 
to determine the authenticity of the shipment. Chain 
of custody procedures shall apply to such labels and 
shall include procedures applicable to contractual 
agreements for the use and distribution of the labels, 
methods to audit the use of the labels, and database 
access for the relevant governmental agencies for 
audit or verification of the use and distribution of 
the labels.’’. 
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