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108th CONGRESS
  1st Session
                                  S. 7

To amend title XVIII of the Social Security Act to provide coverage of 
 outpatient prescription drugs under the medicare program and to amend 
 the Federal Food, Drug, and Cosmetic Act to provide greater access to 
          affordable pharmaceuticals, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 7, 2003

 Mr. Daschle (for himself, Mr. Rockefeller, Ms. Stabenow, Mr. Schumer, 
  Mr. Kennedy, Mrs. Clinton, Mr. Akaka, Mr. Corzine, Mr. Durbin, Ms. 
 Mikulski, Mr. Leahy, Mr. Levin, Mr. Johnson, Mr. Reed, Mr. Sarbanes, 
  Mr. Dayton, Mr. Lautenberg, and Mr. Reid) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend title XVIII of the Social Security Act to provide coverage of 
 outpatient prescription drugs under the medicare program and to amend 
 the Federal Food, Drug, and Cosmetic Act to provide greater access to 
          affordable pharmaceuticals, 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; TABLE OF CONTENTS.

    (a) Short Title.--This title may be cited as the ``Prescription 
Drug Benefit and Cost Containment Act of 2003''.
    (b) Table of Contents.--The table of contents of this title is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
     TITLE I--MEDICARE OUTPATIENT PRESCRIPTION DRUG BENEFIT PROGRAM

Sec. 101. Medicare outpatient prescription drug benefit program.
         ``Part D--Outpatient Prescription Drug Benefit Program

``Sec. 1860. Definitions.
``Sec. 1860A. Establishment of outpatient prescription drug benefit 
                            program.
``Sec. 1860B. Enrollment under program.
``Sec. 1860C. Enrollment in a plan.
``Sec. 1860D. Providing information to beneficiaries.
``Sec. 1860E. Premiums.
``Sec. 1860F. Outpatient prescription drug benefits.
``Sec. 1860G. Entities eligible to provide outpatient drug benefit.
``Sec. 1860H. Minimum standards for eligible entities.
``Sec. 1860I. Payments.
``Sec. 1860J. Employer incentive program for employment-based retiree 
                            drug coverage.
``Sec. 1860K. Prescription Drug Account in the Federal Supplementary 
                            Medical Insurance Trust Fund.
``Sec. 1860L. Medicare Prescription Drug Advisory Committee.''.
Sec. 102. Part D benefits under Medicare+Choice plans.
Sec. 103. Additional assistance for low-income beneficiaries.
Sec. 104. Medigap revisions.
Sec. 105. Coverage of immunosuppressive drugs for all medicare 
                            beneficiaries under part B.
Sec. 106. HHS study and report on uniform pharmacy benefit cards.
Sec. 107. Expansion of membership and duties of Medicare Payment 
                            Advisory Commission (MedPAC).
   TITLE II--PRESCRIPTION DRUG COST CONTAINMENT AND QUALITY ASSURANCE

Sec. 201. Filing of patent information with the Food and Drug 
                            Administration.
Sec. 202. Limitation of 30-month stay to certain patents.
Sec. 203. Exclusivity for accelerated generic drug applicants.
Sec. 204. Fair treatment for innovators.
Sec. 205. Bioequivalence.
Sec. 206. Clarification of State authority relating to medicaid drug 
                            rebate agreements.
Sec. 207. Importation of prescription drugs.
Sec. 208. Pediatric labeling of drugs and biological products.
Sec. 209. Report.
Sec. 210. Conforming and technical amendments.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Prescription drug coverage was not a standard part of 
        health insurance when the medicare program under title XVIII of 
        the Social Security Act was enacted in 1965. Since 1965, 
        however, drug coverage has become a key component of most 
        private and public health insurance coverage, except for the 
        medicare program.
            (2) At least \2/3\ of medicare beneficiaries have 
        unreliable, inadequate, or no drug coverage at all.
            (3) Seniors who do not have drug coverage typically pay 15 
        percent more for prescription drugs than individuals who have 
        such coverage.
            (4) The number of private firms offering retiree health 
        coverage is declining.
            (5) The premiums for medicare supplemental policies 
        (medigap policies) that provide prescription drug coverage are 
        too expensive for most medicare beneficiaries and are highest 
        for older senior citizens who need prescription drug coverage 
        the most and typically have the lowest incomes.
            (6) All medicare beneficiaries should have access to a 
        voluntary, reliable, affordable outpatient drug benefit as part 
        of the medicare program that assists with the high cost of 
        prescription drugs and protects them against excessive out-of-
        pocket costs.
            (7) Generic pharmaceuticals are approved by the Food and 
        Drug Administration on the basis of scientific testing and 
        other information establishing that pharmaceuticals are 
        therapeutically equivalent to brand-name pharmaceuticals, 
        ensuring consumers a safe, efficacious, and cost-effective 
        alternative to brand-name innovator pharmaceuticals.
            (8) The Congressional Budget Office estimates that--
                    (A) the use of generic pharmaceuticals for brand-
                name pharmaceuticals could save purchasers of 
                pharmaceuticals between $8,000,000,000 and 
                $10,000,000,000 each year; and
                    (B) generic pharmaceuticals cost between 25 percent 
                and 60 percent less than brand-name pharmaceuticals, 
                resulting in an estimated average savings of $15 to $30 
                on each prescription.
            (9) Expanding access to generic pharmaceuticals can help 
        consumers, especially senior citizens and the uninsured, have 
        access to more affordable prescription drugs.

     TITLE I--MEDICARE OUTPATIENT PRESCRIPTION DRUG BENEFIT PROGRAM

SEC. 101. MEDICARE OUTPATIENT PRESCRIPTION DRUG BENEFIT PROGRAM.

    (a) Establishment.--Title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.) is amended by redesignating part D as part E and 
by inserting after part C the following new part:

         ``Part D--Outpatient Prescription Drug Benefit Program

                             ``definitions

    ``Sec. 1860. In this part:
            ``(1) Covered outpatient drug.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `covered outpatient drug' 
                means any of the following products:
                            ``(i) A drug which may be dispensed only 
                        upon prescription, and--
                                    ``(I) which is approved for safety 
                                and effectiveness as a prescription 
                                drug under section 505 of the Federal 
                                Food, Drug, and Cosmetic Act;
                                    ``(II)(aa) which was commercially 
                                used or sold in the United States 
                                before the date of enactment of the 
                                Drug Amendments of 1962 or which is 
                                identical, similar, or related (within 
                                the meaning of section 310.6(b)(1) of 
                                title 21 of the Code of Federal 
                                Regulations) to such a drug, and (bb) 
                                which has not been the subject of a 
                                final determination by the Secretary 
                                that it is a `new drug' (within the 
                                meaning of section 201(p) of the 
                                Federal Food, Drug, and Cosmetic Act) 
                                or an action brought by the Secretary 
                                under section 301, 302(a), or 304(a) of 
                                such Act to enforce section 502(f) or 
                                505(a) of such Act; or
                                    ``(III)(aa) which is described in 
                                section 107(c)(3) of the Drug 
                                Amendments of 1962 and for which the 
                                Secretary has determined there is a 
                                compelling justification for its 
                                medical need, or is identical, similar, 
                                or related (within the meaning of 
                                section 310.6(b)(1) of title 21 of the 
                                Code of Federal Regulations) to such a 
                                drug, and (bb) for which the Secretary 
                                has not issued a notice of an 
                                opportunity for a hearing under section 
                                505(e) of the Federal Food, Drug, and 
                                Cosmetic Act on a proposed order of the 
                                Secretary to withdraw approval of an 
                                application for such drug under such 
                                section because the Secretary has 
                                determined that the drug is less than 
                                effective for all conditions of use 
                                prescribed, recommended, or suggested 
                                in its labeling.
                            ``(ii) A biological product which--
                                    ``(I) may only be dispensed upon 
                                prescription;
                                    ``(II) is licensed under section 
                                351 of the Public Health Service Act; 
                                and
                                    ``(III) is produced at an 
                                establishment licensed under such 
                                section to produce such product.
                            ``(iii) Insulin approved under appropriate 
                        Federal law, including needles and syringes for 
                        the administration of such insulin.
                            ``(iv) A prescribed drug or biological 
                        product that would meet the requirements of 
                        clause (i) or (ii) except that it is available 
                        over-the-counter in addition to being available 
                        upon prescription.
                    ``(B) Exclusion.--The term `covered outpatient 
                drug' does not include any product--
                            ``(i) except as provided in subparagraph 
                        (A)(iv), which may be distributed to 
                        individuals without a prescription;
                            ``(ii) for which payment is available under 
                        part A or B or would be available under part B 
                        but for the application of a deductible under 
                        such part (unless payment for such product is 
                        not available because benefits under part A or 
                        B have been exhausted), determined, except as 
                        provided in subparagraph (C), without regard to 
                        whether the beneficiary involved is entitled to 
                        benefits under part A or enrolled under part B; 
                        or
                            ``(iii) except for agents used to promote 
                        smoking cessation and agents used for the 
                        treatment of obesity, for which coverage may be 
                        excluded or restricted under section 
                        1927(d)(2).
            ``(2) Eligible beneficiary.--The term `eligible 
        beneficiary' means an individual that is entitled to benefits 
        under part A or enrolled under part B.
            ``(3) Eligible entity.--The term `eligible entity' means 
        any entity that the Secretary determines to be appropriate to 
        provide eligible beneficiaries with covered outpatient drugs 
        under a plan under this part, including--
                    ``(A) a pharmacy benefit management company;
                    ``(B) a retail pharmacy delivery system;
                    ``(C) a health plan or insurer;
                    ``(D) a State (through mechanisms established under 
                a State plan under title XIX or under a State 
                pharmaceutical assistance program);
                    ``(E) any other entity approved by the Secretary; 
                or
                    ``(F) any combination of the entities described in 
                subparagraphs (A) through (E) if the Secretary 
                determines that such combination--
                            ``(i) increases the scope or efficiency of 
                        the provision of benefits under this part; and
                            ``(ii) is not anticompetitive.
            ``(4) Medicare+choice organization; medicare+choice plan.--
        The terms `Medicare+Choice organization' and `Medicare+Choice 
        plan' have the meanings given such terms in subsections (a)(1) 
        and (b)(1), respectively, of section 1859 (relating to 
        definitions relating to Medicare+Choice organizations).
            ``(5) Prescription drug account.--The term `Prescription 
        Drug Account' means the Prescription Drug Account (as 
        established under section 1860K) in the Federal Supplementary 
        Medical Insurance Trust Fund under section 1841.

    ``establishment of outpatient prescription drug benefit program

    ``Sec. 1860A. (a) Provision of Benefit.--
            ``(1) In general.--As soon as the Prescription Drug Benefit 
        and Cost Containment Act of 2003 can be implemented after the 
        date of enactment of that Act, the Secretary shall provide for 
        and administer an outpatient prescription drug benefit program 
        under which each eligible beneficiary enrolled under this part 
        shall be provided with coverage of covered outpatient drugs as 
        follows:
                    ``(A) Medicare+choice plan.--If the eligible 
                beneficiary is eligible to enroll in a Medicare+Choice 
                plan, the beneficiary--
                            ``(i) may enroll in such a plan; and
                            ``(ii) if so enrolled, shall obtain 
                        coverage of covered outpatient drugs through 
                        such plan.
                    ``(B) Medicare prescription drug plan.--If the 
                eligible beneficiary is not enrolled in a 
                Medicare+Choice plan, the beneficiary shall obtain 
                coverage of covered outpatient drugs through enrollment 
                in a plan offered by an eligible entity with a contract 
                under this part.
            ``(2) Voluntary nature of program.--Nothing in this part 
        shall be construed as requiring an eligible beneficiary to 
        enroll in the program established under this part.
            ``(3) Scope of benefits.--The program established under 
        this part shall provide for coverage of all therapeutic classes 
        of covered outpatient drugs.

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