article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Medicare Drug Savings Through Choice Act of 2007''. SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRESCRIPTION DRUG PLAN OPTION. (a) In General.--Subpart 2 of part D 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 2008), in addition to any plans offered under section 1860D-11, the Secretary shall offer a Medicare operated prescription drug plan (as defined in subsection (b)) with a service area that consists of the entire United States. ``(b) Medicare Operated Prescription Drug Plan Defined.--For purposes of this part, the term `Medicare operated prescription drug plan' means a prescription drug plan that offers qualified prescription drug coverage and access described in section 1860D-2(d) to the prices negotiated under subsection (c)(1). Such plan may offer supplemental prescription drug coverage in the same manner as other qualified prescription drug coverage offered by other prescription drug plans. ``(c) Enhanced Affordability Through Negotiations.-- ``(1) In general.--Notwithstanding section 1860D-11(i), for purposes of offering the Medicare operated prescription drug plan under this section, the Secretary shall negotiate with pharmaceutical manufacturers with respect to the purchase price of such covered part D drugs 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. ``(2) Implementation of other cost savings strategies.--To the extent practicable and consistent with paragraph (1), the Secretary shall implement strategies similar to those used by the Department of Veterans Affairs or other Federal purchasers of prescription drugs, and other strategies, to reduce the purchase cost of covered part D drugs. ``(3) Conditioning use of formularies.--Insofar as the Medicare operated prescription drug plan uses a formulary, such plan shall inform, consistent with section 1860D-4(a)(3)(B), enrollees of changes in such formulary, including changes in covered drugs and the prices of such drugs. ``(4) Savings used to fill gaps in prescription drug coverage.--Any savings to the Medicare operated prescription drug plan resulting from actions take under this subsection shall be used by the plan to extend coverage under the plan to individuals who have reached the initial coverage limit applicable under the plan but who have not reached the annual out-of-pocket threshold specified in section 1860D-2(b)(4)(B). ``(d) Monthly Premiums.-- ``(1) For qualified prescription drug coverage.-- ``(A) Nationally uniform monthly beneficiary premium.--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 the Medicare operated prescription drug plan shall be uniform nationally. ``(B) Bid based on costs.--The bid submitted under section 1860D-11(b)(2)(C) for the Medicare operated prescription drug plan shall be based on the average monthly per capita actuarial cost of offering such plan for the year involved, including administrative expenses. ``(2) Supplemental prescription drug coverage.--Insofar as the Medicare operated prescription drug plan offers supplemental prescription drug coverage, the Secretary shall adjust the amount of the bid submitted under section 1860D- 11(b)(2)(C) (and the premium charged under paragraph (1)) to reflect the additional benefits offered under such coverage. ``(e) Open Enrollment.--A part D eligible individual may enroll in the Medicare operated prescription drug plan at any time.''. (b) No Late Enrollment Penalty for Individuals Enrolled in Medicare Operated Prescription Drug Plan.--Section 1860D-13(b)(2) of such Act (42 U.S.C. 1395w-113(b)(2)) is amended by adding at the end the following new sentence: ``A part D eligible individual described in this paragraph does not include an individual enrolled in the Medicare operated prescription drug plan during the period in which the individual is so enrolled.''. (c) Conforming Amendments.-- (1) Section 1860D-1(b)(1)(B)(iii) of the Social Security Act (42 U.S.C. 1395w-101(b)(1)(B)(iii)) is amended by inserting ``and section 1860D-11A(e)'' after ``paragraphs (2) and (3) of this subsection''. (2) Section 1860D-2(b)(3)(A) of such Act (42 U.S.C. 1395w- 102(b)(3)(A)) is amended by inserting ``and section 1860D- 11A(c)(4)'' after ``paragraph (4)''. (3) Section 1860D-3(a) of such 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) In general.--The Medicare operated prescription drug plan shall be offered nationally in accordance with section 1860D-11A. ``(B) Relationship to other plans.-- ``(i) In general.--Subject to clause (ii), the Medicare operated prescription drug plan shall be offered in addition to any qualifying plan or fallback prescription drug plan offered in a PDP region and shall not be considered to be such a plan for purposes of meeting the requirements of this subsection. ``(ii) Designation as a fallback plan.-- Notwithstanding any other provision of this part, the Secretary may designate the Medicare operated prescription drug plan as the fallback prescription drug plan for any fallback service area (as defined in section 1860D-11(g)(3)) determined to be appropriate by the Secretary.''. (4) Section 1860D-13(c)(3) of such Act (42 U.S.C. 1395w- 113(c)(3)) is amended-- (A) in the heading, by inserting ``and the Medicare operated prescription drug plan'' after ``Fallback plans''; and (B) by inserting ``or the Medicare operated prescription drug plan'' after ``a fallback prescription drug plan''. (5) Section 1860D-16(b)(1) of such Act (42 U.S.C.1395w- 116(b)(1)) is amended-- (A) in subparagraph (C), by striking ``and'' after the semicolon at the end; and (B) in subparagraph (D), by striking the period at the end and inserting ``; and''; and ``(E) payments for expenses incurred with respect to the operation of the Medicare operated prescription drug plan under section 1860D-11A.''. (6) Section 1860D-41(a) of such 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(b).''.
summary: Medicare Drug Savings Through Choice Act of 2007 - Amends part D (Voluntary Prescription Drug Benefit Program) of title XVIII (Medicare) of the Social Security Act to direct the Secretary of Health and Human Services to: (1) offer a Medicare operated prescription drug plan with a service area that consists of the entire United States; (2) negotiate with pharmaceutical manufacturers to reduce the purchase cost of covered Medicare part D drugs; and (3) encourage the use of more affordable therapeutic equivalents. Requires the monthly beneficiary premium charged under such a plan to be uniform nationally. Requires adjustment of such premium amount in case of supplemental prescription drug coverage.