Title: Prescription Reduction in Costs for Everyone (PRICE) Act of 2017
Policy area: Health

Summary:
Prescription Reduction in Costs for Everyone (PRICE) Act of 2017
This bill amends title XVIII (Medicare) of the Social Security Act to require the President, with respect to offering one or more Medicare-operated prescription drug plan options, to: (1) negotiate prices with drug manufacturers, and (2) establish and apply a formulary and formulary incentives. In general, a Medicare-operated drug plan must meet the same requirements as apply to other prescription drug plans.
The President must report to Congress biannually on negotiations conducted by the President to achieve lower prices for Medicare beneficiaries.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1775 Introduced in House (IH)]

<DOC>






115th CONGRESS
  1st Session
                                H. R. 1775

To amend part D of title XVIII of the Social Security Act to direct the 
    President to negotiate prescription drug prices and establish a 
 formulary on behalf of Medicare beneficiaries, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 29, 2017

  Mr. DeFazio (for himself and Mr. Conyers) 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 jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
To amend part D of title XVIII of the Social Security Act to direct the 
    President to negotiate prescription drug prices and establish a 
 formulary on behalf of Medicare beneficiaries, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prescription Reduction in Costs for 
Everyone (PRICE) Act of 2017''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The President has announced his intention to bring down 
        prices of prescription drugs.
            (2) The President has touted his negotiating skills and 
        referred to himself as a ``master negotiator''.

SEC. 3. PRESIDENTIAL NEGOTIATION OF PRESCRIPTION DRUG PRICES.

    (a) Negotiation by President.--Section 1860D-11 of the Social 
Security Act (42 U.S.C. 1395w-111) is amended 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 President shall negotiate with pharmaceutical 
        manufacturers the prices (including discounts, rebates, and 
        other price concessions) that may be charged to PDP sponsors 
        and MA organizations for covered part D drugs for part D 
        eligible individuals 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 President to establish or 
                require a particular formulary.
                    ``(B) Construction.--Subparagraph (A) shall not be 
                construed as affecting the President'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 subsection shall be 
        construed as preventing the sponsor of a prescription drug 
        plan, or an organization offering 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 congress.--Not later than June 
        1, 2018, and every 6 months thereafter, the President shall 
        submit to the Committees on Ways and Means, Energy and 
        Commerce, and Oversight and Government Reform of the House of 
        Representatives and the Committee on Finance of the Senate a 
        report on negotiations conducted by the President to achieve 
        lower prices for Medicare beneficiaries, and the prices and 
        price discounts achieved by the President as a result of such 
        negotiations.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act and shall first 
apply to negotiations and prices for plan years beginning on January 1, 
2018.

SEC. 4. PRESIDENTIAL ESTABLISHMENT OF MEDICARE OPERATED PRESCRIPTION 
              DRUG PLAN OPTION.

    (a) In General.--Subpart 2 of part D of title XVIII of the Social 
Security Act is amended by inserting after section 1860D-11 (42 U.S.C. 
1395w-111) the following new section:

           ``medicare operated prescription drug plan option

    ``Sec. 1860D-11A.  (a) In General.--Notwithstanding any other 
provision of this part, for each year (beginning with 2018), in 
addition to any plans offered under section 1860D-11, the President 
shall offer one or more Medicare operated prescription drug plans (as 
defined in subsection (c)) with a service area that consists of the 
entire United States and shall enter into negotiations in accordance 
with subsection (b) with pharmaceutical manufacturers to reduce the 
purchase cost of covered part D drugs for eligible part D individuals 
who enroll in such a plan.
    ``(b) Negotiations.--For purposes of offering a Medicare operated 
prescription drug plan under this section, the President shall 
negotiate with pharmaceutical manufacturers with respect to the 
purchase price of covered part D drugs in a Medicare operated 
prescription drug plan and shall encourage the use of more affordable 
therapeutic equivalents to the extent such practices do not override 
medical necessity as determined by the prescribing physician. To the 
extent practicable and consistent with the previous sentence, the 
President shall implement strategies similar to those used by other 
Federal purchasers of prescription drugs, and other strategies, 
including the use of a formulary and formulary incentives in subsection 
(e), to reduce the purchase cost of covered part D drugs.
    ``(c) Medicare Operated Prescription Drug Plan Defined.--For 
purposes of this part, the term `Medicare operated prescription drug 
plan' means a prescription drug plan that offers qualified prescription 
drug coverage and access to negotiated prices described in section 
1860D-2(a)(1)(A). Such a plan may offer supplemental prescription drug 
coverage in the same manner as other qualified prescription drug 
coverage offered by other prescription drug plans.
    ``(d) Monthly Beneficiary Premium.--
            ``(1) Qualified prescription drug coverage.--The monthly 
        beneficiary premium for qualified prescription drug coverage 
        and access to negotiated prices described in section 1860D-
        2(a)(1)(A) to be charged under a Medicare operated prescription 
        drug plan shall be uniform nationally. Such premium for months 
        in 2018 and each succeeding year shall be based on the average 
        monthly per capita actuarial cost of offering the Medicare 
        operated prescription drug plan for the year involved, 
        including administrative expenses.
            ``(2) Supplemental prescription drug coverage.--Insofar as 
        a Medicare operated prescription drug plan offers supplemental 
        prescription drug coverage, the President may adjust the amount 
        of the premium charged under paragraph (1).
    ``(e) Use of a Formulary and Formulary Incentives.--
            ``(1) In general.--With respect to the operation of a 
        Medicare operated prescription drug plan, the President shall 
        establish and apply a formulary (and may include formulary 
        incentives described in paragraph (2)(C)(ii)) in accordance 
        with this subsection in order to--
                    ``(A) increase patient safety;
                    ``(B) increase appropriate use and reduce 
                inappropriate use of drugs; and
                    ``(C) reward value.
            ``(2) Development of initial formulary.--
                    ``(A) In general.--In selecting covered part D 
                drugs for inclusion in a formulary, the President shall 
                consider clinical benefit and price.
                    ``(B) Role of ahrq.--The Director of the Agency for 
                Healthcare Research and Quality shall be responsible 
                for assessing the clinical benefit of covered part D 
                drugs and making recommendations to the President 
                regarding which drugs should be included in the 
                formulary. In conducting such assessments and making 
                such recommendations, the Director shall--
                            ``(i) consider safety concerns including 
                        those identified by the Federal Food and Drug 
                        Administration;
                            ``(ii) use available data and evaluations, 
                        with priority given to randomized controlled 
                        trials, to examine clinical effectiveness, 
                        comparative effectiveness, safety, and enhanced 
                        compliance with a drug regimen;
                            ``(iii) use the same classes of drugs 
                        developed by United States Pharmacopeia for 
                        this part;
                            ``(iv) consider evaluations made by--
                                    ``(I) the Director under section 
                                1013 of the Medicare Prescription Drug, 
                                Improvement, and Modernization Act of 
                                2003;
                                    ``(II) other Federal entities, such 
                                as the Secretary of Veterans Affairs; 
                                and
                                    ``(III) other private and public 
                                entities, such as the Drug 
                                Effectiveness Review Project and 
                                Medicaid programs; and
                            ``(v) recommend to the President--
                                    ``(I) those drugs in a class that 
                                provide a greater clinical benefit, 
                                including fewer safety concerns or less 
                                risk of side effects, than another drug 
                                in the same class that should be 
                                included in the formulary;
                                    ``(II) those drugs in a class that 
                                provide less clinical benefit, 
                                including greater safety concerns or a 
                                greater risk of side effects, than 
                                another drug in the same class that 
                                should be excluded from the formulary; 
                                and
                                    ``(III) drugs in a class with same 
                                or similar clinical benefit for which 
                                it would be appropriate for the 
                                Secretary to competitively bid (or 
                                negotiate) for placement on the 
                                formulary.
                    ``(C) Consideration of ahrq recommendations.--
                            ``(i) In general.--The President, after 
                        taking into consideration the recommendations 
                        under subparagraph (B)(v), shall establish a 
                        formulary, and formulary incentives, to 
                        encourage use of covered part D drugs that--
                                    ``(I) have a lower cost and provide 
                                a greater clinical benefit than other 
                                drugs;
                                    ``(II) have a lower cost than other 
                                drugs with same or similar clinical 
                                benefit; and
                                    ``(III) have the same cost but 
                                provide greater clinical benefit than 
                                other drugs.
                            ``(ii) Formulary incentives.--The formulary 
                        incentives under clause (i) may be in the form 
                        of one or more of the following:
                                    ``(I) Tiered copayments.
                                    ``(II) Reference pricing.
                                    ``(III) Prior authorization.
                                    ``(IV) Step therapy.
                                    ``(V) Medication therapy 
                                management.
                                    ``(VI) Generic drug substitution.
                            ``(iii) Flexibility.--In applying such 
                        formulary incentives the President may decide 
                        not to impose any cost-sharing for a covered 
                        part D drug for which--
                                    ``(I) the elimination of cost 
                                sharing would be expected to increase 
                                compliance with a drug regimen; and
                                    ``(II) compliance would be expected 
                                to produce savings under part A or B or 
                                both.
            ``(3) Limitations on formulary.--In any formulary 
        established under this subsection, the formulary may not be 
        changed during a year, except--
                    ``(A) to add a generic version of a covered part D 
                drug that entered the market;
                    ``(B) to remove such a drug for which a safety 
                problem is found; and
                    ``(C) to add a drug that the President identifies 
                as a drug which treats a condition for which there has 
                not previously been a treatment option or for which a 
                clear and significant benefit has been demonstrated 
                over other covered part D drugs.
            ``(4) Adding drugs to the initial formulary.--
                    ``(A) Use of advisory committee.--The President 
                shall establish and appoint an advisory committee (in 
                this paragraph referred to as the `advisory 
                committee')--
                            ``(i) to review petitions from drug 
                        manufacturers, health care provider 
                        organizations, patient groups, and other 
                        entities for inclusion of a drug in, or other 
                        changes to, such formulary; and
                            ``(ii) to recommend any changes to the 
                        formulary established under this subsection.
                    ``(B) Composition.--The advisory committee shall be 
                composed of 9 members and shall include representatives 
                of physicians, pharmacists, and consumers and others 
                with expertise in evaluating prescription drugs. The 
                President shall select members based on their knowledge 
                of pharmaceuticals and the Medicare population. Members 
                shall be deemed to be special Government employees for 
                purposes of applying the conflict of interest 
                provisions under section 208 of title 18, United States 
                Code, and no waiver of such provisions for such a 
                member shall be permitted.
                    ``(C) Consultation.--The advisory committee shall 
                consult, as necessary, with physicians who are 
                specialists in treating the disease for which a drug is 
                being considered.
                    ``(D) Request for studies.--The advisory committee 
                may request the Agency for Healthcare Research and 
                Quality or an academic or research institution to study 
                and make a report on a petition described in 
                subparagraph (A)(ii) in order to assess--
                            ``(i) clinical effectiveness;
                            ``(ii) comparative effectiveness;
                            ``(iii) safety; and
                            ``(iv) enhanced compliance with a drug 
                        regimen.
                    ``(E) Recommendations.--The advisory committee 
                shall make recommendations to the President regarding--
                            ``(i) whether a covered part D drug is 
                        found to provide a greater clinical benefit, 
                        including fewer safety concerns or less risk of 
                        side effects, than another drug in the same 
                        class that is currently included in the 
                        formulary and should be included in the 
                        formulary;
                            ``(ii) whether a covered part D drug is 
                        found to provide less clinical benefit, 
                        including greater safety concerns or a greater 
                        risk of side effects, than another drug in the 
                        same class that is currently included in the 
                        formulary and should not be included in the 
                        formulary; and
                            ``(iii) whether a covered part D drug has 
                        the same or similar clinical benefit to a drug 
                        in the same class that is currently included in 
                        the formulary and whether the drug should be 
                        included in the formulary.
                    ``(F) Limitations on review of manufacturer 
                petitions.--The advisory committee shall not review a 
                petition of a drug manufacturer under subparagraph 
                (A)(ii) with respect to a covered part D drug unless 
                the petition is accompanied by the following:
                            ``(i) Raw data from clinical trials on the 
                        safety and effectiveness of the drug.
                            ``(ii) Any data from clinical trials 
                        conducted using active controls on the drug or 
                        drugs that are the current standard of care.
                            ``(iii) Any available data on comparative 
                        effectiveness of the drug.
                            ``(iv) Any other information the President 
                        requires for the advisory committee to complete 
                        its review.
                    ``(G) Response to recommendations.--The President 
                shall review the recommendations of the advisory 
                committee and if the President accepts such 
                recommendations the President shall modify the 
                formulary established under this subsection 
                accordingly. Nothing in this section shall preclude the 
                President from adding to the formulary a drug for which 
                the Director of the Agency for Healthcare Research and 
                Quality or the advisory committee has not made a 
                recommendation.
                    ``(H) Notice of changes.--The President shall 
                provide timely notice to beneficiaries and health 
                professionals about changes to the formulary or 
                formulary incentives.
    ``(f) Informing Beneficiaries.--The President shall take steps to 
inform beneficiaries about the availability of a Medicare operated drug 
plan or plans including providing information in the annual handbook 
distributed to all beneficiaries and adding information to the official 
public Medicare Web site related to prescription drug coverage 
available through this part.
    ``(g) Application of All Other Requirements for Prescription Drug 
Plans.--Except as specifically provided in this section, any Medicare 
operated drug plan shall meet the same requirements as apply to any 
other prescription drug plan, including the requirements of section 
1860D-4(b)(1) relating to assuring pharmacy access.''.
    (b) Conforming Amendments.--
            (1) Section 1860D-3(a) of the Social Security Act (42 
        U.S.C. 1395w-103(a)) is amended by adding at the end the 
        following new paragraph:
            ``(4) Availability of the medicare operated prescription 
        drug plan.--A Medicare operated prescription drug plan (as 
        defined in section 1860D-11A(c)) shall be offered nationally in 
        accordance with section 1860D-11A.''.
            (2)(A) Section 1860D-3 of the Social Security Act (42 
        U.S.C. 1395w-103) is amended by adding at the end the following 
        new subsection:
    ``(c) Provisions Only Applicable in 2006 Through 2017.--The 
provisions of this section shall only apply with respect to 2006 
through 2017.''.
            (B) Section 1860D-11(g) of such Act (42 U.S.C. 1395w-
        111(g)) is amended by adding at the end the following new 
        paragraph:
            ``(8) No authority for fallback plans after 2017.--A 
        fallback prescription drug plan shall not be available after 
        December 31, 2017.''.
            (3) Section 1860D-13(c)(3) of the Social Security Act (42 
        U.S.C. 1395w-113(c)(3)) is amended--
                    (A) in the heading, by inserting ``and medicare 
                operated prescription drug plans'' after ``Fallback 
                plans''; and
                    (B) by inserting ``or a Medicare operated 
                prescription drug plan'' after ``a fallback 
                prescription drug plan''.
            (4) Section 1860D-16(b)(1) of the Social Security Act (42 
        U.S.C. 1395w-116(b)(1)) is amended--
                    (A) in subparagraph (C), by striking ``and'' after 
                the semicolon at the end;
                    (B) in subparagraph (D), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(E) payments for expenses incurred with respect 
                to the operation of Medicare operated prescription drug 
                plans under section 1860D-11A.''.
            (5) Section 1860D-41(a) of the Social Security Act (42 
        U.S.C. 1395w-151(a)) is amended by adding at the end the 
        following new paragraph:
            ``(19) Medicare operated prescription drug plan.--The term 
        `Medicare operated prescription drug plan' has the meaning 
        given such term in section 1860D-11A(c).''.
                                 <all>