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 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.

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 (Public Law 108-173), is amended by striking 
subsection (i) (relating to noninterference) and by inserting the 
following:
    ``(i) Authority to Negotiate Prices With Manufacturers.--In order 
to ensure that beneficiaries enrolled 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 departments that purchase 
prescription drugs in bulk to negotiate contracts with manufacturers of 
covered part D drugs, consistent with the requirements and in 
furtherance of the goals of providing quality care and containing costs 
under this part.''.

SEC. 102. ELIMINATION OF GAP IN COVERAGE OF PRESCRIPTION DRUG BENEFITS.

    (a) In General.--Section 1860D-2(b) of the Social Security Act (42 
U.S.C. 1395w-102(b)), as added by section 101(a) of the Medicare 
Prescription Drug, Improvement, 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            ``(3) Repealed.''.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 striking ``, 
                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 ``paragraph 
                        (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 subparagraph 
                (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 benefits 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 subparagraph (C) 
                and redesignating subparagraphs (D) and (E) as 
                subparagraphs (C) and (D), respectively;
                    (ii) in paragraph (2), by striking subparagraph (C) 
                and redesignating subparagraphs (D) and (E) as 
                subparagraphs (C) and (D), respectively; and
                    (iii) in paragraph (4)(A) in the matter preceding 
                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), respectively.
            (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 enactment 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 Market 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 amending the section 
        to read as if section 1121(a) of Public Law 108-173 had not 
        been enacted;
            (2) in section 301 (21 U.S.C. 331), by amending 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 amending the section 
        to read as if section 1121(b)(2) of Public Law 108-173 had not 
        been enacted.
    (b) Importation of Prescription Drugs.--Section 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 inserting 
                ``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 wholesalers'' 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 requirements of this Act; and'';
                    (B) in paragraph (2), by striking ``, including 
                subsection (d); and'' and inserting a period; and
                    (C) by striking paragraph (3);
            (3) in subsection (c), by inserting ``by pharmacists and 
        wholesalers (but not qualifying individuals)'' after 
        ``importation of covered products'';
            (4) in subsection (d)--
                    (A) by striking paragraphs (3) and (10);
                    (B) in paragraph (5), by striking ``, including the 
                professional license number of the importer, 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), respectively;
            (5) by amending subsection (e) to read as follows:
    ``(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 prescription 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 determines 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 
                incidence of shipments pursuant to such subsection, 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 determined 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 inserting ``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), respectively; 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 TECHNOLOGIES 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 requirements of section 505C 
for counterfeit-resistant technologies.''.
    (b) Requirements.--Title V of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 351 et seq.) is amended by inserting after section 505B 
the following:

``SEC. 505C. COUNTERFEIT-RESISTANT TECHNOLOGIES.

    ``(a) Incorporation of Counterfeit-Resistant Technologies Into 
Prescription Drug Packaging.--The Secretary shall require that the 
packaging of any drug subject to section 503(b) incorporate--
            ``(1) overt optically variable counterfeit-resistant 
        technologies that are described in subsection (b) and comply 
        with the standards of subsection (c); or
            ``(2) technologies that have an equivalent function of 
        security, as determined by the Secretary.
    ``(b) Eligible Technologies.--Technologies described in this 
subsection--
            ``(1) shall be visible to the naked eye, providing for 
        visual identification of product authenticity without the need 
        for readers, microscopes, lighting devices, 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 including forensic 
        capability.
    ``(c) Standards for Packaging.--
            ``(1) Multiple elements.--For the purpose of making it more 
        difficult to counterfeit the packaging of drugs subject to 
        section 503(b), manufacturers 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 incorporates 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.''.

Summary: Medicare Prescription Drug Improvement Act - Amends title XVIII (Medicare) of the Social Security Act to repeal provisions prohibiting the Secretary of Health and Human Services from interfering with the negotiations between drug manufacturers and pharmacies and prescription drug plan sponsors. Grants the Secretary authority similar to that of the Secretary of Veterans Affairs, Secretary of Defense, and the heads of other Federal agencies and departments that purchase prescription drugs in bulk to negotiate contracts with manufacturers of covered Medicare part D (Voluntary Prescription Drug Benefit Program) drugs.

Eliminates the initial coverage limit on the maximum costs that may be recognized for payment purposes (including the annual deductible) with respect to prescription drug benefits.

Pharmaceutical Market Access Act of 2004 - Amends the Federal Food, Drug and Cosmetic Act to: (1) repeal certain sections of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 relating to importation of prescription drugs from Canada. and (2) restore previous law. Amends such restored law to direct the Secretary to promulgate regulations allowing qualifying individuals (in addition to pharmacists and wholesalers) to import covered products.



Repeals the mandate that the Secretary require that a foreign seller specify the original source of the product and the amount of each lot of the product originally received.

Amends provisions regarding the testing of imported covered products. Declares that specified tests shall not be required unless the importer is a wholesaler. Requires such tests to be conducted by the importer-wholesaler unless a product is a prescription drug subject to the provisions of this Act pertaining to counterfeit-resistant packaging.



Classifies prescription drugs as misbranded if they do not incorporate specified counterfeit-resistant technologies in packaging. Directs the Secretary to require that the packaging of any subject drug incorporate specified overt optically variable counterfeit-resistant technologies.