text: 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).''.
target: 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.
feat_title: To amend title XVIII of the Social Security Act to provide for a Medicare operated prescription drug plan option to deliver a meaningful drug benefit and lower prescription drug prices under the Medicare Program.