II
109th CONGRESS
2d Session
S. 2354
IN THE SENATE OF THE UNITED STATES
March 2, 2006
Mr. Nelson of Florida (for himself, Ms. Collins, Mr. Rockefeller, Mrs. Boxer, Mr. Kerry, Ms. Mikulski, Mr. Feingold, Mr. Dorgan, and Mr. Kohl) 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 reduce the coverage gap in prescription drug coverage under part D of such title based on savings to the Medicare program resulting from the negotiation of prescription drug prices.
Short title
This Act may be cited as
the Medicare Prescription Drug Gap
Reduction Act of 2006
.
Reducing coverage gap
Section 1860D–2(b) of the Social Security Act (42 U.S.C. 1395w–102(b)) is amended—
in paragraph
(3)(A), by striking paragraph (4)
and inserting paragraph
(4), subject to the increase described in paragraph (7)
; and
by adding at the end the following new paragraph:
Increase of initial coverage limit based on medicare savings due to negotiation of drug prices
For each year (beginning with 2006), the Secretary shall increase the initial coverage limit for the year specified in paragraph (3) so that the aggregate amount of increased expenditures from the Medicare Prescription Drug Account as a result of such increase under this paragraph in the year (as estimated by the Office of the Actuary of the Centers for Medicare & Medicaid Services) is equal to the aggregate amount of reduced expenditures from such Account that the Office of the Actuary estimates will result in the year as a result of the application of the amendment made by section 3(a) of the Medicare Prescription Drug Gap Reduction Act of 2006.
.
Negotiating fair prices for medicare prescription drugs
In General
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:
Authority To Negotiate Prices With Manufacturers
In general
Subject to paragraph (4), in order to ensure that beneficiaries enrolled under prescription drug plans and MA–PD plans pay the lowest possible price, the Secretary shall have authority similar to that of other Federal entities 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.
Mandatory responsibilities
The Secretary shall be required to—
negotiate contracts with manufacturers of covered part D drugs for each fallback prescription drug plan under subsection (g); and
participate in negotiation of contracts of any covered part D drug upon request of an approved prescription drug plan or MA–PD plan.
Rule of construction
Nothing in paragraph (2) shall be construed to limit the authority of the Secretary under paragraph (1) to the mandatory responsibilities under paragraph (2).
No particular formulary or price structure
In order to promote competition under this part and in carrying out this part, the Secretary may not require a particular formulary or institute a price structure for the reimbursement of covered part D drugs.
.
Effective Date
The amendment made by subsection (a) shall take effect as if included in the enactment of section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173).