II
111th CONGRESS
2d Session
S. 4024
IN THE SENATE OF THE UNITED STATES
December 10, 2010
Mr. Wyden (for himself and Ms. Snowe) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To reduce the costs of prescription drugs for Medicare beneficiaries and to guarantee access to comprehensive prescription drug coverage under part D of the Medicare program, and for other purposes.
Short title
This Act may be cited as the
Medicare Enhancements for Needed Drugs
Act of 2010
.
GAO studies and reports on prices of prescription drugs
Review and reports on retail prices of prescription drugs
Initial review
The Comptroller General of the United States shall conduct a review of the retail cost of prescription drugs in the United States during 2004 through 2010, with an emphasis on the prescription drugs most utilized for individuals age 65 or older.
Subsequent review
After conducting the review under paragraph (1), the Comptroller General shall continuously review the retail cost of such drugs through December 31, 2014, to determine the changes in such costs.
Reports
Initial review
Not later than 90 days after the date of enactment of this Act, the Comptroller General shall submit to Congress a report on the initial review conducted under paragraph (1).
Subsequent review
Not later than April 1 of 2012, 2013, 2014, and 2015, the Comptroller General shall submit to Congress a report on the subsequent review conducted under paragraph (2).
Annual GAO study and report on retail and acquisition prices of certain prescription drugs
Ongoing study
The Comptroller General of the United States shall conduct an ongoing study that compares the average retail cost in the United States for each of the 20 most utilized prescription drugs for individuals age 65 or older with—
the average price at which private health plans acquire each such drug;
the average price at which the Department of Defense under the Defense Health Program acquires each such drug;
the average price at which the Department of Veterans Affairs under the laws administered by the Secretary of Veterans Affairs acquires each such drug; and
the average negotiated price for each such drug that eligible beneficiaries enrolled in a prescription drug plan under part D of title XVIII of the Social Security Act that provides only basic prescription drug coverage have access to under such plans.
Annual report
Not later than October 1, 2011, and annually thereafter, the Comptroller General shall submit to Congress a report on the study conducted under paragraph (1), together with such recommendations as the Comptroller General determines appropriate.
Inclusion of average aggregate beneficiary costs and savings in comparative information for basic Medicare prescription drug plans
Section 1860D–1(c)(3) of the Social Security Act (42 U.S.C. 1395w–101(c)(3)) is amended—
in subparagraph (A)—
in the matter preceding clause (i), by
striking subparagraph (B)
and inserting subparagraphs (B)
and (C)
; and
by adding at the end the following new clause:
Average aggregate beneficiary costs and savings
With respect to plan years beginning on or after January 1, 2012, the average aggregate costs, including deductibles and other cost-sharing, that a beneficiary will incur for covered part D drugs in the year under the plan compared to the average aggregate costs that an eligible beneficiary with no prescription drug coverage will incur for covered part D drugs in the year.
; and
by adding at the end the following new subparagraph:
Average aggregate beneficiary costs and savings information only for basic prescription drug plans
The Secretary shall not provide comparative information under subparagraph (A)(vi) with respect to—
a prescription drug plan that provides supplemental prescription drug coverage; or
a Medicare Advantage plan.
.
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 by inserting the following:
Authority To negotiate prices with manufacturers
In general
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 when the drug is a single source drug without a therapeutic equivalent;
participate in the negotiation of contracts with respect to any covered part D drug upon the request of an approved prescription drug plan or MA–PD plan;
participate in the negotiation of contracts for any covered part D drugs for which there is a substantial amount of Federal research funding in the development of the drug; and
negotiate contracts with manufacturers of covered part D drugs for each standard fallback prescription drug plan under subsection (g) and each comprehensive fallback prescription drug plan under subsection (k).
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.
Use of savings
The savings to the Medicare Prescription Drug Account through the use of the authority provided under this subsection (including the mandatory responsibilities under paragraph (2)) shall be used to strengthen the program under this part and to reduce the Federal deficit.
.
Effective date
The amendment made by this section shall take effect on the date of enactment of this Act.
Access to a comprehensive Medicare prescription drug plan
Requirement for access
Section 1860D–3(a) of the Social Security Act (42 U.S.C. 1395w–103(a)) is amended—
in paragraph (1)—
by striking
Choice of at least two
plans in each area.—The Secretary
and inserting
“Choice.—
Choice of at least two plans in each area
The Secretary
; and
by adding at the end the following new subparagraph:
Choice of a comprehensive prescription drug plan
In addition to the requirement under subparagraph (A), the Secretary shall ensure that each part D eligible individual has available a choice of enrollment in a comprehensive prescription drug plan (as defined in paragraph (4)) in the area in which the individual resides. In any such case in which such a plan is not available, the part D eligible individual shall be given the opportunity to enroll in a comprehensive fallback prescription drug plan.
; and
by adding at the end the following new paragraph:
Comprehensive prescription drug plan
For purposes of this section, the term
comprehensive prescription drug plan
means a prescription drug
plan that provides coverage of covered part D drugs after an individual has
reached the initial coverage limit under paragraph (3) of section 1860D–2(b)
but has not reached the annual out-of-pocket threshold under paragraph (4)(B)
of such section that is the same as the coverage for such drugs that is
provided under the plan after the individual has met the deductible under
paragraph (1) of such section but has not reached such initial coverage
limit.
.
Comprehensive fallback prescription drug plan
Section 1860D–11 of the Social Security Act (42 U.S.C. 1395w–111) is amended by adding at the end the following new subsection:
Guaranteeing access to comprehensive coverage
Solicitation of bids
Separate from the bidding process under subsections (b) and (g), the Secretary shall provide for a process for the solicitation of bids from eligible comprehensive fallback entities (as defined in paragraph (2)) for the offering in all comprehensive fallback service areas (as defined in paragraph (3)) in one or more PDP regions of a comprehensive fallback prescription drug plan (as defined in paragraph (4)) during the contract period specified in subsection (g)(5) (as made applicable to this subsection under paragraph (6)).
Eligible comprehensive fallback entity
For purposes of this section, the term eligible comprehensive fallback entity means, with respect to all comprehensive fallback service areas in a PDP region for a contract period, an entity that—
meets the requirements to be a PDP sponsor (or would meet such requirements but for the fact that the entity is not a risk-bearing entity); and
does not submit a bid under section 1860D–11(b) for any prescription drug plan for any PDP region for the first year of such contract period.
Fallback service area
For purposes of this subsection, the term comprehensive fallback service area means, for a PDP region with respect to a year, any area within such region for which the Secretary determines before the beginning of the year that the access requirements of the first sentence of section 1860D–3(a)(1)(B) will not be met for part D eligible individuals residing in the area for the year.
Comprehensive fallback prescription drug plan
For purposes of this part, the term comprehensive fallback prescription drug plan means a prescription drug plan that—
offers the standard prescription drug coverage and access to negotiated prices described in section 1860D–2(a)(1)(A);
offers coverage of covered part D drugs after an individual has reached the initial coverage limit under paragraph (3) of section 1860D–2(b) but has not reached the annual out-of-pocket threshold under paragraph (4)(B) of such section that is the same as the coverage for such drugs that is offered after the individual has met the deductible under paragraph (1) of such section but has not reached such initial coverage limit; and
meets such other requirements as the Secretary may specify.
Monthly beneficiary premium
Except as provided in section 1860D–13(b) (relating to late enrollment penalty) and subject to section 1860D–14 (relating to low-income assistance), the monthly beneficiary premium to be charged under a comprehensive fallback prescription drug plan offered in all comprehensive fallback service areas in a PDP region shall be uniform and shall be an amount equal to—
25.5 percent of an amount equal to the Secretary’s estimate of the average monthly per capita actuarial cost, including administrative expenses, under the comprehensive fallback prescription drug plan of providing the coverage described in paragraph (4)(A) in the region, as calculated by the Chief Actuary of the Centers for Medicare & Medicaid Services; and
100 percent of an amount equal to the Secretary’s estimate of the average monthly per capita actuarial cost, including administrative expenses, under the comprehensive fallback prescription drug plan of providing the coverage described in paragraph (4)(B) in the region, as calculated by the Chief Actuary of the Centers for Medicare & Medicaid Services.
Incorporation of standard fallback prescription drug plan provisions
The provisions of paragraphs (1)(B), (5), and (7) of subsection (g) shall apply to comprehensive fallback prescription drug plans and entities offering such plans in the same manner as such provisions apply to standard fallback prescription drug plans and entities offering such plans.
Same entity may offer both fallback prescription drug plans in an area
The Secretary may award a contract to an entity under this subsection with respect to an area and period and a contract under subsection (g) with respect to the same area and period.
.
Conforming amendments
Access
Section 1860D–3 of the Social Security Act (42 U.S.C. 1395w–103) is amended—
in subsection (a)—
in paragraph
(1)(A) of subsection (a), as redesignated by subsection (a), by inserting
standard
before fallback
; and
in paragraph
(2), by striking paragraph (1)
and inserting paragraph
(1)(A)
; and
in subsection
(b)(2), by striking fallback prescription drug plan for that area under
section 1860D–11(g)
and inserting standard or comprehensive
fallback prescription drug plan for that area under subsections (g) and (k) of
section 1860D–11, as applicable
.
Limited risk plans
Section 1860D–11(f) of the Social Security Act (42 U.S.C. 1395w–111(f)) is amended—
in paragraph (1)—
by striking
1860D–3(a)
and inserting 1860D–3(a)(1)(A)
;
and
by inserting
standard
before fallback
; and
in paragraph
(2)(A), by striking 1860D–3(a)
and inserting
1860D–3(a)(1)(A)
; and
in each of
subparagraphs (A) and (B) of paragraph (4), by striking a
fallback
and inserting a standard or comprehensive
fallback
.
Standard fallback prescription drug plan
Section 1860D–11(g) of the Social Security Act (42 U.S.C. 1395w–111(g)) is amended—
in the heading,
by inserting standard
prescription drug
after access to
;
by inserting
standard
before fallback
each place it
appears;
by striking
Fallback
each place it appears and
inserting Standard
fallback
;
by inserting
standard
before fallback
each place it appears;
and
in paragraph (3),
by striking 1860D–3(a)
and inserting
1860D–3(a)(1)(A)
.
Annual report
Section 1860D–11(h) of the
Social Security Act (42 U.S.C.
1395w–111(h)) is amended by striking (f) and (g)
and inserting
(f), (g), and (k)
.
Limitation on entities offering fallback prescription drug plans
Section 1860D–12(b)(2) of the Social Security Act (42 U.S.C. 1395w–112(b)(2)) is amended—
in the matter
preceding subparagraph (A), by striking a fallback
and inserting
a standard or comprehensive fallback
;
in subparagraph (A)—
by striking
section 1860D–11(g)
and inserting subsection (g) or (k)
of section 1860D–11
;
by striking
such section
and inserting such subsections, as
applicable
; and
by striking
a fallback
and inserting a standard or comprehensive
fallback
;
in subparagraph
(B), by striking a fallback
and inserting a standard or
comprehensive fallback
;
in subparagraph
(C), by striking a fallback
and inserting a standard or
comprehensive fallback
and
in the flush
matter following subparagraph (C), by striking a fallback
and
inserting a standard or comprehensive fallback
.
Collection of premium
Section 1860D–13(c)(3) of the
Social Security Act (42 U.S.C.
1395w–113(c)(3)) is amended by striking a fallback
and inserting
a standard or comprehensive fallback
.
Payment
Section
1860D–15(g) of the Social
Security Act (42 U.S.C. 1395w–115(g)) is amended by striking
offering
and all that follows and inserting the following:
“offering—
a standard prescription drug plan (as defined in paragraph (4) of section 1860D–11(g)), the amount payable shall be the amounts determined under the contract for such plan pursuant to paragraph (5) of such section; and
a comprehensive prescription drug plan (as defined in paragraph (4) of section 1860D–11(k)), the amount payable shall be the amounts determined under the contract for such plan pursuant to such paragraph (5) (as made applicable to section 1860D–11(k) under paragraph (6) of such section).
.
Payment from account
Section 1860D–16(b)(1)(B) of the
Social Security Act (42 U.S.C.
1395w–116(b)(1)(B)) is amended by inserting standard and
comprehensive
before fallback
.
Definition
Section 1860D–41(a)(5) of the Social Security Act (42 U.S.C. 1395w–151(a)(5)) is amended to read as follows:
Standard fallback prescription drug plan; comprehensive fallback prescription drug plan
The terms standard fallback prescription drug
plan
and comprehensive fallback prescription drug plan
have the meaning given those terms in subsection (g)(4) and (k)(4),
respectively, of section
1860D–11.
.
Effective date
The amendments made by this section shall take effect on January 1, 2012.