text: 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.
target: 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.
feat_title: Prescription Drug Fairness for Seniors Act of 1998