Prescription Drug Fairness for Seniors Act of 1998

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prescription Drug Fairness for 
Seniors Act of 1998''.

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 prescription drugs than the drug 
        manufacturers' most favored customers, such as health insurers, 
        health maintenance organizations, and the Federal Government.
            (2) On average, older Americans who buy their own 
        prescription drugs pay twice as much for prescription drugs as 
        the drug manufacturers' most favored 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 Administration, 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 
        prescription drugs at the favorable prices available to other 
        federally funded health care programs.
            (5) It has been estimated that implementation of the policy 
        set forth in this Act will reduce prescription prices for 
        Medicare beneficiaries by more than 40 percent.
            (6) In addition to substantially lowering health care costs 
        for older Americans, implementation 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.
    (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, by allowing pharmacies to purchase drugs 
for Medicare beneficiaries at the substantially reduced price available 
under the Federal Supply Schedule.

SEC. 3. MEDICARE BENEFICIARY DRUG BENEFIT CARD.

    The Secretary of Health and Human Services shall furnish to each 
Medicare beneficiary a drug benefit card that enables the beneficiary 
to purchase covered prescription drugs from participating pharmacies at 
reduced prices pursuant to section 4.

SEC. 4. PARTICIPATING PHARMACIES.

    (a) Agreements to Participate.--Any qualified pharmacy may enter 
into an agreement with the Secretary that enables the pharmacy to sell 
covered outpatient drugs to holders of Medicare drug benefit cards at a 
reduced price, by authorizing the pharmacy to operate as a 
participating pharmacy under this Act.
    (b) Right of Participating Pharmacies To Obtain Drugs.--An 
agreement under this section shall entitle the participating pharmacy 
to purchase any covered outpatient drug that is listed on the Federal 
Supply Schedule of the General Services Administration at the 
participating pharmacy discount price for that drug determined under 
subsection (d).
    (c) Quantity of Drugs Purchased.--An agreement under this section 
shall permit the participating pharmacy to purchase under this Act as 
much of a covered outpatient drug as is sold by the pharmacy to holders 
of Medicare drug benefit cards.
    (d) Participating Pharmacy Discount Price.--
            (1) In general.--The Secretary shall determine a 
        participating pharmacy discount price for each covered 
        outpatient drug.
            (2) Determination.--The participating pharmacy discount 
        price for a covered outpatient drug shall be determined by 
        adding--
                    (A) the price at which the drug is available to 
                Federal agencies from the Federal Supply Schedule under 
                section 8126 of title 38, United States Code; plus
                    (B) an amount that reflects the administrative 
                costs incurred by the Secretary in administering this 
                Act.

SEC. 5. ADMINISTRATION.

    (a) In General.--The Secretary shall administer this Act in a 
manner that uses existing methods of obtaining and distributing drugs 
to the maximum extent possible, consistent with efficiency and cost 
effectiveness.
    (b) Regulations.--The Secretary shall issue such regulations as may 
be necessary to implement this Act.

SEC. 6. REPORTS TO CONGRESS REGARDING EFFECTIVENESS 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 discriminatory 
        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 include 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) Covered outpatient drug.--The term ``covered outpatient 
        drug'' has the meaning given that term in section 1927(k)(2) of 
        the Social Security Act (42 U.S.C. 1396r-8(k)(2)).
            (2) 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.
            (3) Medicare drug benefit card.--The term ``Medicare drug 
        benefit card'' means such a card issued under section 3.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 8. EFFECTIVE DATE.

    The Secretary shall implement this Act as expeditiously as 
practicable and in a manner consistent with the obligations of the 
United States.

Summary: Prescription Drug Fairness for Seniors Act of 1998 - Directs the Secretary of Health and Human Services to furnish each Medicare beneficiary under title XVIII of the Social Security Act with a drug benefit card enabling the beneficiary to purchase covered outpatient prescription drugs listed on the Federal Supply Schedule from participating pharmacies at reduced prices.