Title: Medicare Prescription Drug Savings and Choice Act of 2019
Policy area: Health

Summary:
Medicare Prescription Drug Savings and Choice Act of 2019
This bill requires the Centers for Medicare & Medicaid Services (CMS) to establish at least one prescription drug plan that is operated by Medicare.
Among other things, the plan must (1) serve the entire United States; and (2) be the default plan for enrollees under the Medicare prescription drug benefit, unless the enrollee chooses another plan.
Additionally, the CMS must negotiate prices for prescription drugs that are covered under the plan and, if appropriate, encourage the use of more affordable therapeutic equivalents. (Currently, the CMS is prohibited from negotiating the prices of covered drugs under the Medicare prescription drug benefit.) The Agency for Healthcare Research and Quality must assess the clinical benefits of drugs and make recommendations to the CMS regarding price negotiations, based on specified information (e.g., comparable international prices).

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4769 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 4769

To amend part D of title XVIII of the Social Security Act to deliver a 
    meaningful benefit and lower prescription drug prices under the 
                           Medicare program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 21, 2019

Ms. Schakowsky 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 deliver a 
    meaningful benefit and lower prescription drug prices under the 
                           Medicare program.

    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 ``Medicare Prescription Drug Savings 
and Choice Act of 2019''.

SEC. 2. 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 2021), in 
addition to any plans offered under section 1860D-11, the Secretary 
shall offer one or more Medicare operated prescription drug plans (as 
defined in subsection (d)) with a service area that consists of the 
entire United States and shall enter into negotiations in accordance 
with subsection (c) 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) Enrollment.--Notwithstanding subparagraphs (C) and (D) of 
section 1860D-1(b)(1), a Medicare operated prescription drug plan 
offered under this section shall serve as the default prescription drug 
plan for all part D enrollees unless another prescription drug plan is 
selected.
    ``(c) Negotiations.--Notwithstanding section 1860D-11(i), for 
purposes of offering a Medicare operated prescription drug plan under 
this section, the Secretary 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 Secretary shall implement negotiation and 
incentive strategies similar to those used by other Federal purchasers 
of prescription drugs to reduce the purchase cost of covered Part D 
drugs, and other strategies, as described in subsection (f), which may 
include the use of a pricing scale based on an international price 
index.
    ``(d) Medicare Operated Prescription Drug Plan Defined.--For 
purposes of this part, the term `Medicare operated prescription drug 
plan' means a comprehensive 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.
    ``(e) 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 2021 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 Secretary may adjust the amount 
        of the premium charged under paragraph (1).
    ``(f) Use of Negotiation and Benefit Design Incentives.--
            ``(1) In general.--With respect to the operation of a 
        Medicare operated prescription drug plan and in negotiating 
        with respect to the purchase price of covered part D drugs in 
        such plan, the Secretary shall reward value, increase 
        appropriate use of drugs, and ensure patient safety and access 
        to medications.
            ``(2) Role of ahrq.--The Director of the Agency for 
        Healthcare Research and Quality, in coordination with the 
        Administrator of the Centers for Medicare & Medicaid Services, 
        shall be responsible for assessing the clinical benefit of 
        covered part D drugs and making recommendations to the 
        Secretary regarding the negotiated prices of covered drugs and 
        any appropriate tiering or incentive strategies under the plan. 
        In conducting such assessments and making such recommendations, 
        the Director shall carry out the following activities:
                    ``(A) Consider the comparable international price 
                of such drugs based upon the median retail list price 
                of such drug (which shall be, as practicable, the 
                volume-weighted price for comparable units and dosage 
                forms) among a category of at least the following peer 
                reference countries: Canada, the United Kingdom, 
                France, Japan, Australia, and Germany.
                    ``(B) Consider safety concerns and post-market 
                data, including those identified by the Food and Drug 
                Administration and from national health registries.
                    ``(C) Use available data and evaluations, including 
                from research supported by the National Institutes of 
                Health, with priority given to randomized controlled 
                trials, to examine clinical effectiveness, comparative 
                effectiveness, safety, and enhanced compliance with a 
                drug regimen.
                    ``(D) Use the same classes of drugs developed by 
                United States Pharmacopeia for this part.
                    ``(E) 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, 
                        which may include the Drug Effectiveness Review 
                        Project and Medicaid programs.
                    ``(F) Consider recommendations made by the advisory 
                committee pursuant to paragraph (3)(F).
                    ``(G) Recommend to the Secretary 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.
            ``(3) Use of advisory committee.--
                    ``(A) In general.--The Secretary 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 regarding negotiated prices; and
                            ``(ii) to recommend any changes in order to 
                        further negotiations with respect to such 
                        prices.
                    ``(B) Composition.--Subject to subparagraph (C), 
                the advisory committee shall be composed of 9 members 
                and shall include representatives of physicians, 
                pharmacists, consumers, and others with expertise in 
                evaluating prescription drugs. The Secretary 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) Banned individuals.--
                            ``(i) Drug company lobbyists.--No former 
                        registered drug manufacturer lobbyist--
                                    ``(I) may be appointed to the 
                                advisory committee; or
                                    ``(II) may be employed by the 
                                advisory committee during the 6-year 
                                period beginning on the date on which 
                                the registered lobbyist terminates its 
                                registration in accordance with section 
                                4(d) of the Lobbying Disclosure Act of 
                                1995 (2 U.S.C. 1603(d)) or the agent 
                                terminates its status, as applicable.
                            ``(ii) Senior executives of law-breaking 
                        companies.--No former senior executive of a 
                        covered entity (as defined in clause (iii))--
                                    ``(I) may be appointed to the 
                                Advisory Committee; or
                                    ``(II) may be employed by the 
                                Advisory Committee during the 6-year 
                                period beginning on the later of--
                                            ``(aa) the date of the 
                                        settlement described in item 
                                        (aa) of clause (iii)(II); or
                                            ``(bb) the date on which 
                                        the enforcement action 
                                        described in item (bb) of such 
                                        clause has concluded.
                            ``(iii) Covered entity.--The term `covered 
                        entity' means any entity that is--
                                    ``(I) a drug manufacturer; and
                                    ``(II)(aa) operating under Federal 
                                settlement including a Federal consent 
                                decree; or
                                    ``(bb) the subject of an 
                                enforcement action in a court of the 
                                United States or by an agency.
                    ``(D) Consultation.--The advisory committee shall 
                consult, as necessary, with physicians who are 
                specialists in treating the disease for which a drug is 
                being considered.
                    ``(E) 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)(i) in order to assess cost-
                effectiveness, clinical effectiveness, comparative 
                effectiveness, safety, and compliance with a drug 
                regimen.
                    ``(F) Recommendations.--The advisory committee 
                shall make recommendations to the Director of the 
                Agency for Healthcare Research and Quality regarding 
                the appropriate price at which to begin negotiations on 
                a part D drug pursuant to this section.
                    ``(G) Limitations on review of manufacturer 
                petitions.--The advisory committee shall not review a 
                petition of a drug manufacturer under subparagraph 
                (A)(i) 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 Secretary 
                        requires for the advisory committee to complete 
                        its review.
    ``(g) Informing Beneficiaries.--The Secretary shall take steps to 
inform part D eligible individuals not previously enrolled in a 
Medicare operated drug plan (including such individuals who are newly 
eligible to enroll under this part) regarding the enrollment of such 
individual in a Medicare operated drug plan in accordance with this 
section, including providing information in the annual handbook and 
adding information to the official public Medicare website related to 
prescription drug coverage available through this part.
    ``(h) 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(d)) 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 2020.--The 
provisions of this section shall only apply with respect to 2006 
through 2020.''.
            (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 2020.--A 
        fallback prescription drug plan shall not be available after 
        December 31, 2020.''.
            (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(d).''.
    (c) Rule of Construction.--Nothing in this section shall be 
interpreted to supersede any other negotiation authority granted to the 
Secretary under Federal law with respect to prescription drug prices.

SEC. 3. IMPROVED APPEALS PROCESS UNDER THE MEDICARE OPERATED 
              PRESCRIPTION DRUG PLAN.

    Section 1860D-4(h) of the Social Security Act (42 U.S.C. 1305w-
104(h)) is amended by adding at the end the following new paragraph:
            ``(4) Appeals process for medicare operated prescription 
        drug plan.--
                    ``(A) In general.--The Secretary shall develop a 
                well-defined process for appeals for denials of 
                benefits under this part under the Medicare operated 
                prescription drug plan (as defined in section 1860D-
                11A(d)). Such process shall be efficient, impose 
                minimal administrative burdens, and ensure the timely 
                procurement of medications. Medical necessity shall be 
                based on professional medical judgment, the medical 
                condition of the beneficiary, and other medical 
                evidence.
                    ``(B) Consultation in development of process.--In 
                developing the appeals process under subparagraph (A), 
                the Secretary shall consult with consumer and patient 
                groups, as well as other key stakeholders, to ensure 
                the goals described in subparagraph (A) are 
                achieved.''.
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