Medicare Drug Card Guaranteed Savings Act - Amends part D (Voluntary Prescription Drug Benefit Program) of title XVIII (Medicare) of the Social Security Act to provide for the offering of a Federal national prescription drug discount card program. Charges a $30 fee for the card under the program. Provides for direct negotiations by the Secretary of Health and Human Services with prescription drug manufacturers to obtain discount prices that are to be less than prices otherwise available in the retail market. Provides that: (1) for periods beginning with January 1, 2005, the only discount card program in which an individual may be enrolled shall be the Federal national prescription drug discount card program; and (2) individuals enrolled in another program as of December 31, 2004, who do not affirmatively disenroll from all discount card programs are deemed to be enrolled in such Federal national prescription drug discount card program.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4919 Introduced in House (IH)]
108th CONGRESS
2d Session
H. R. 4919
To amend part D of title XVIII of the Social Security Act to provide
for the offering of a Federal national prescription drug discount card
program.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 22, 2004
Mr. Allen (for himself and Mr. Michaud) 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 provide
for the offering of a Federal national prescription drug discount card
program.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS.
(a) Short Title.--This Act may be cited as the ``Medicare Drug Card
Guaranteed Savings Act''.
(b) Findings.--Congress finds the following:
(1) Americans who buy their own prescription drugs often
pay twice as much for prescription drugs as consumers in
foreign nations or as the price the Department of Veterans
Affairs obtains by negotiating directly with the pharmaceutical
manufacturers. In some cases, older Americans pay 10 times more
for prescription drugs than such customers. Prescription drug
prices have increased 3.4 percent during the first quarter of
2004, nearly three times the rate of inflation.
(2) The Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law No: 108-173) established
a program for the endorsement of medicare drug discount card
programs in order to provide for reduced prices for drugs for
medicare beneficiaries and provide a subsidy for low-income
medicare beneficiaries.
(3) There are currently more than 70 endorsed medicare drug
discount card programs. Medicare drug discount card programs
can change the drugs that they offer and the size of the
discounts every seven days. Medicare beneficiaries are allowed
to change their current medicare drug discount card program
only once, during an annual enrollment period between November
15 and December 31, 2004.
(4) Enrollment in medicare drug discount card programs has
been less than projected due to the complexity of the programs,
the limited number of drugs covered under most programs, the
changing prescription drug needs of beneficiaries, and
beneficiaries' concern that the programs do not guarantee real
savings on prescription drug purchases. As of July 19, 2004,
fewer than 14 percent of low-income medicare beneficiaries who
qualify for the $600 subsidy under the law have enrolled in a
medicare drug discount card program.
(5) Currently, medicare discount drug card sponsors are
required to pass on to enrollees only an undefined ``share'' of
the rebates they secure from drug manufacturers and card
sponsors can use the remaining savings for administrative costs
and profit. The law does not require the sponsors to reveal to
enrollees the size of the rebates secured from drug
manufacturers or to disclose what portion of those rebates are
kept by the sponsors and not passed on to enrollees.
(6) There is a need for a Federal national medicare
prescription drug discount card program that offers guaranteed
discounts on all prescription drugs and that aggregates the
buying power of all medicare beneficiaries in order to
negotiate significant reductions in price.
SEC. 2. OFFERING OF FEDERAL NATIONAL PRESCRIPTION DRUG DISCOUNT CARD
PROGRAM.
(a) Offering of Program.--
(1) In general.--Subsection (a)(1) of section 1860D-31 of
the Social Security Act (42 U.S.C. 1395w-141) is amended--
(A) by striking ``and'' at the end of subparagraph
(A);
(B) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(C) to provide for the offering of a Federal
national prescription drug discount card program that
is available for discount card eligible individuals
throughout the United States (including the
territories) and that meets the requirements under
subsection (l)(1) in addition to the requirements
otherwise applicable to an endorsed discount card
program.''.
(2) Exclusive program in 2005.--Subsection (c)(1)(C) of
such section is amended--
(A) in clause (i), by striking ``clauses (ii) and
(iii)'' and inserting ``clauses (ii) through (iv)'';
and
(B) by adding at the end the following new clause:
``(iv) Limitation to enrollment in federal
national prescription drug discount card
program in 2005.--Notwithstanding any other
provision of this section, for periods
beginning with January 1, 2005, the only
discount card program in which an individual
may be enrolled under this section shall be the
Federal national prescription drug discount
card program described in subsection (l).
Individuals enrolled in another program as of
December 31, 2004, who do not affirmatively
disenroll from all discount card programs under
this section are deemed to be enrolled in such
Federal national prescription drug discount
card program.''.
(b) Additional Program Requirements.--Such section is further
amended by adding at the end the following new subsection:
``(l) Provisions Relating to Federal National Prescription Drug
Discount Card Program.--
``(1) Additional requirements.--The Federal national
prescription drug discount card program described in subsection
(a)(1)(C) shall also meet the following requirements:
``(A) Discounted prices.--Through direct
negotiations with prescription drug manufacturers, the
discounted prices offered under the program shall be
less than prices otherwise available in the retail
market. Through such negotiations, the Secretary shall
obtain discounted prices that are at least as low as
the manufacturer's average foreign price (as defined in
paragraph (3)) for the drug involved.
``(B) Passing through all savings.--The full amount
of discounted savings are passed through to enrollees.
``(C) Fee for card.--The annual fee for enrollment
in the program shall be $30 (except as provided under
subparagraphs (E) through (G) of subsection (c)(1)),
which fees shall be available to the Secretary for
administrative expenses in offering such program.
``(D) National availability.--The program shall be
made available to individuals residing anyplace in the
United States.
``(E) Handling fee for pharmacists.--The program
shall be designed to provide for a reasonable handling
fee for pharmacists in connection with the provision of
drugs obtained under the program and shall be
approximately equal to the average handling fee for
pharmacists of other large insurance plans that
administer drug benefits.
``(2) Oversight.--The oversight authority of the Secretary
under subsection (i)(2) with respect to such Federal national
prescription drug discount card program shall be exercised by
the Inspector General of the Department of Health and Human
Services.
``(3) Average foreign price defined.--
``(A) In general.--For purposes of this subsection,
the term `average foreign price' means, with respect to
a covered discount card drug, the average price that
the manufacturer of the drug realizes on the sale of
drugs with the same active ingredient or ingredients
that are consumed in Canada, France, Germany, Italy,
Japan, and the United Kingdom, taking into account--
``(i) any rebate, contract term or
condition, or other arrangement (whether with
the purchaser or other persons) that has the
effect of reducing the amount realized by the
manufacturer on the sale of the drugs;
``(ii) adjustments for any differences in
dosage, formulation, or other relevant
characteristics of the drugs; and
``(iii) any other contract or side
agreement that has the effect of adjusting the
effective price of the drug, including
agreements to purchase non-drug products.
``(B) Exempt transactions.--The Secretary may, by
regulation, exempt from the calculation of the average
foreign price of a drug those prices realized by a
manufacturer in transactions that are entered into for
charitable purposes, for research purposes, or under
other unusual circumstances, if the Secretary
determines that the exemption is in the public interest
and is consistent with the purposes of this section.''.
(c) Conforming Amendments.--Such section is further amended--
(1) in subsection (h)(1)(A), by adding after and below
clause (v) the following new sentence:
``Such term also includes the Secretary with respect to
the offering of the Federal national prescription drug
discount card program described in subsection
(a)(1)(C).'';
(2) in subsection (h)(2)(A), by adding at the end the
following: ``The Secretary shall establish a separate procedure
for the qualification of the Federal national prescription drug
discount card program described in subsection (a)(1)(C).''; and
(3) in subsection (k)(6), by inserting before the period at
the end the following: ``, except in the case of the Federal
national prescription drug discount card program described in
subsection (a)(1)(C)''.
(d) Implementation.--
(1) Availability of funds.--Notwithstanding any other
provision of law, funds provided under section 1015 of the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Public Law 108-173) shall be available to the
Secretary of Health and Human Services for reasonable
administrative costs in offering the Federal national
prescription drug discount card program described in section
1860D-31(a)(1)(C) of the Social Security Act, as added by
subsection (a).
(2) Timely implementation.--The Secretary shall take such
steps as may be required to provide for the offering of such
program during the annual open enrollment period occurring in
November, 2004.
<all>
Introduced in House
Introduced in House
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.
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.
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.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Health.
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