article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Prescription Drug Fairness for Seniors Act of 1998''. SEC. 2. FINDINGS AND PURPOSES. (a) Findings.--The Congress finds the following: (1) Manufacturers of prescription drugs engage in price discrimination practices that compel many older Americans to pay substantially more for prescription drugs than the drug manufacturers' most favored customers, such as health insurers, health maintenance organizations, and the Federal Government. (2) On average, older Americans who buy their own prescription drugs pay twice as much for prescription drugs as the drug manufacturers' most favored customers. In some cases, older Americans pay over 15 times more for prescription drugs than the most favored customers. (3) The discriminatory pricing by major drug manufacturers sustains their annual profits of $20,000,000,000, but causes financial hardship and impairs the health and well-being of millions of older Americans. More than one in eight older Americans are forced to choose between buying their food and buying their medicines. (4) Most federally funded health care programs, including Medicaid, the Veterans Health Administration, the Public Health Service, and the Indian Health Service, obtain prescription drugs for their beneficiaries at low prices. Medicare beneficiaries are denied this benefit and cannot obtain their prescription drugs at the favorable prices available to other federally funded health care programs. (5) It has been estimated that implementation of the policy set forth in this Act will reduce prescription prices for Medicare beneficiaries by more than 40 percent. (6) In addition to substantially lowering health care costs for older Americans, implementation of the policy set forth in this Act will significantly improve the health and well-being of older Americans and lower the costs to the Federal taxpayer of the Medicare program. (b) Purpose.--The purpose of this Act is to protect Medicare beneficiaries from discriminatory pricing by drug manufacturers and to make prescription drugs available to Medicare beneficiaries at substantially reduced prices, by allowing pharmacies to purchase drugs for Medicare beneficiaries at the substantially reduced price available under the Federal Supply Schedule. SEC. 3. MEDICARE BENEFICIARY DRUG BENEFIT CARD. The Secretary of Health and Human Services shall furnish to each Medicare beneficiary a drug benefit card that enables the beneficiary to purchase covered prescription drugs from participating pharmacies at reduced prices pursuant to section 4. SEC. 4. PARTICIPATING PHARMACIES. (a) Agreements to Participate.--Any qualified pharmacy may enter into an agreement with the Secretary that enables the pharmacy to sell covered outpatient drugs to holders of Medicare drug benefit cards at a reduced price, by authorizing the pharmacy to operate as a participating pharmacy under this Act. (b) Right of Participating Pharmacies To Obtain Drugs.--An agreement under this section shall entitle the participating pharmacy to purchase any covered outpatient drug that is listed on the Federal Supply Schedule of the General Services Administration at the participating pharmacy discount price for that drug determined under subsection (d). (c) Quantity of Drugs Purchased.--An agreement under this section shall permit the participating pharmacy to purchase under this Act as much of a covered outpatient drug as is sold by the pharmacy to holders of Medicare drug benefit cards. (d) Participating Pharmacy Discount Price.-- (1) In general.--The Secretary shall determine a participating pharmacy discount price for each covered outpatient drug. (2) Determination.--The participating pharmacy discount price for a covered outpatient drug shall be determined by adding-- (A) the price at which the drug is available to Federal agencies from the Federal Supply Schedule under section 8126 of title 38, United States Code; plus (B) an amount that reflects the administrative costs incurred by the Secretary in administering this Act. SEC. 5. ADMINISTRATION. (a) In General.--The Secretary shall administer this Act in a manner that uses existing methods of obtaining and distributing drugs to the maximum extent possible, consistent with efficiency and cost effectiveness. (b) Regulations.--The Secretary shall issue such regulations as may be necessary to implement this Act. SEC. 6. REPORTS TO CONGRESS REGARDING EFFECTIVENESS OF ACT. (a) In General.--Not later than 2 years after the date of the enactment of this Act, and annually thereafter, the Secretary shall report to the Congress regarding the effectiveness of this Act in-- (1) protecting Medicare beneficiaries from discriminatory pricing by drug manufacturers; and (2) making prescription drugs available to Medicare beneficiaries at substantially reduced prices. (b) Consultation.--In preparing such reports, the Secretary shall consult with public health experts, affected industries, organizations representing consumers and older Americans, and other interested persons. (c) Recommendations.--The Secretary shall include in such reports any recommendations they consider appropriate for changes in this Act to further reduce the cost of covered outpatient drugs to Medicare beneficiaries. SEC. 7. DEFINITIONS. In this Act: (1) Covered outpatient drug.--The term ``covered outpatient drug'' has the meaning given that term in section 1927(k)(2) of the Social Security Act (42 U.S.C. 1396r-8(k)(2)). (2) Medicare beneficiary.--The term ``Medicare beneficiary'' means an individual entitled to benefits under part A of title XVIII of the Social Security Act or enrolled under part B of such title, or both. (3) Medicare drug benefit card.--The term ``Medicare drug benefit card'' means such a card issued under section 3. (4) Secretary.--The term ``Secretary'' means the Secretary of Health and Human Services. SEC. 8. EFFECTIVE DATE. The Secretary shall implement this Act as expeditiously as practicable and in a manner consistent with the obligations of the United States.
summary: Prescription Drug Fairness for Seniors Act of 1998 - Directs the Secretary of Health and Human Services to furnish each Medicare beneficiary under title XVIII of the Social Security Act with a drug benefit card enabling the beneficiary to purchase covered outpatient prescription drugs listed on the Federal Supply Schedule from participating pharmacies at reduced prices.