text: SECTION 1. SHORT TITLE; FINDINGS.
  
      (a) Short Title.--This Act may be cited as the ``Medicare Drug Card 
  Guaranteed Savings Act''.
      (b) Findings.--Congress finds the following:
              (1) Americans who buy their own prescription drugs often 
          pay twice as much for prescription drugs as consumers in 
          foreign nations or as the price the Department of Veterans 
          Affairs obtains by negotiating directly with the pharmaceutical 
          manufacturers. In some cases, older Americans pay 10 times more 
          for prescription drugs than such customers. Prescription drug 
          prices have increased 3.4 percent during the first quarter of 
          2004, nearly three times the rate of inflation.
              (2) The Medicare Prescription Drug, Improvement, and 
          Modernization Act of 2003 (Public Law No: 108-173) established 
          a program for the endorsement of medicare drug discount card 
          programs in order to provide for reduced prices for drugs for 
          medicare beneficiaries and provide a subsidy for low-income 
          medicare beneficiaries.
              (3) There are currently more than 70 endorsed medicare drug 
          discount card programs. Medicare drug discount card programs 
          can change the drugs that they offer and the size of the 
          discounts every seven days. Medicare beneficiaries are allowed 
          to change their current medicare drug discount card program 
          only once, during an annual enrollment period between November 
          15 and December 31, 2004.
              (4) Enrollment in medicare drug discount card programs has 
          been less than projected due to the complexity of the programs, 
          the limited number of drugs covered under most programs, the 
          changing prescription drug needs of beneficiaries, and 
          beneficiaries' concern that the programs do not guarantee real 
          savings on prescription drug purchases. As of July 19, 2004, 
          fewer than 14 percent of low-income medicare beneficiaries who 
          qualify for the $600 subsidy under the law have enrolled in a 
          medicare drug discount card program.
              (5) Currently, medicare discount drug card sponsors are 
          required to pass on to enrollees only an undefined ``share'' of 
          the rebates they secure from drug manufacturers and card 
          sponsors can use the remaining savings for administrative costs 
          and profit. The law does not require the sponsors to reveal to 
          enrollees the size of the rebates secured from drug 
          manufacturers or to disclose what portion of those rebates are 
          kept by the sponsors and not passed on to enrollees.
              (6) There is a need for a Federal national medicare 
          prescription drug discount card program that offers guaranteed 
          discounts on all prescription drugs and that aggregates the 
          buying power of all medicare beneficiaries in order to 
          negotiate significant reductions in price.
  
  SEC. 2. OFFERING OF FEDERAL NATIONAL PRESCRIPTION DRUG DISCOUNT CARD 
                PROGRAM.
  
      (a) Offering of Program.--
              (1) In general.--Subsection (a)(1) of section 1860D-31 of 
          the Social Security Act (42 U.S.C. 1395w-141) is amended--
                      (A) by striking ``and'' at the end of subparagraph 
                  (A);
                      (B) by striking the period at the end of 
                  subparagraph (B) and inserting ``; and''; and
                      (C) by adding at the end the following new 
                  subparagraph:
                      ``(C) to provide for the offering of a Federal 
                  national prescription drug discount card program that 
                  is available for discount card eligible individuals 
                  throughout the United States (including the 
                  territories) and that meets the requirements under 
                  subsection (l)(1) in addition to the requirements 
                  otherwise applicable to an endorsed discount card 
                  program.''.
              (2) Exclusive program in 2005.--Subsection (c)(1)(C) of 
          such section is amended--
                      (A) in clause (i), by striking ``clauses (ii) and 
                  (iii)'' and inserting ``clauses (ii) through (iv)''; 
                  and
                      (B) by adding at the end the following new clause:
                              ``(iv) Limitation to enrollment in federal 
                          national prescription drug discount card 
                          program in 2005.--Notwithstanding any other 
                          provision of this section, for periods 
                          beginning with January 1, 2005, the only 
                          discount card program in which an individual 
                          may be enrolled under this section shall be the 
                          Federal national prescription drug discount 
                          card program described in subsection (l). 
                          Individuals enrolled in another program as of 
                          December 31, 2004, who do not affirmatively 
                          disenroll from all discount card programs under 
                          this section are deemed to be enrolled in such 
                          Federal national prescription drug discount 
                          card program.''.
      (b) Additional Program Requirements.--Such section is further 
  amended by adding at the end the following new subsection:
      ``(l) Provisions Relating to Federal National Prescription Drug 
  Discount Card Program.--
              ``(1) Additional requirements.--The Federal national 
          prescription drug discount card program described in subsection 
          (a)(1)(C) shall also meet the following requirements:
                      ``(A) Discounted prices.--Through direct 
                  negotiations with prescription drug manufacturers, the 
                  discounted prices offered under the program shall be 
                  less than prices otherwise available in the retail 
                  market. Through such negotiations, the Secretary shall 
                  obtain discounted prices that are at least as low as 
                  the manufacturer's average foreign price (as defined in 
                  paragraph (3)) for the drug involved.
                      ``(B) Passing through all savings.--The full amount 
                  of discounted savings are passed through to enrollees.
                      ``(C) Fee for card.--The annual fee for enrollment 
                  in the program shall be $30 (except as provided under 
                  subparagraphs (E) through (G) of subsection (c)(1)), 
                  which fees shall be available to the Secretary for 
                  administrative expenses in offering such program.
                      ``(D) National availability.--The program shall be 
                  made available to individuals residing anyplace in the 
                  United States.
                      ``(E) Handling fee for pharmacists.--The program 
                  shall be designed to provide for a reasonable handling 
                  fee for pharmacists in connection with the provision of 
                  drugs obtained under the program and shall be 
                  approximately equal to the average handling fee for 
                  pharmacists of other large insurance plans that 
                  administer drug benefits.
              ``(2) Oversight.--The oversight authority of the Secretary 
          under subsection (i)(2) with respect to such Federal national 
          prescription drug discount card program shall be exercised by 
          the Inspector General of the Department of Health and Human 
          Services.
              ``(3) Average foreign price defined.--
                      ``(A) In general.--For purposes of this subsection, 
                  the term `average foreign price' means, with respect to 
                  a covered discount card drug, the average price that 
                  the manufacturer of the drug realizes on the sale of 
                  drugs with the same active ingredient or ingredients 
                  that are consumed in Canada, France, Germany, Italy, 
                  Japan, and the United Kingdom, taking into account--
                              ``(i) any rebate, contract term or 
                          condition, or other arrangement (whether with 
                          the purchaser or other persons) that has the 
                          effect of reducing the amount realized by the 
                          manufacturer on the sale of the drugs;
                              ``(ii) adjustments for any differences in 
                          dosage, formulation, or other relevant 
                          characteristics of the drugs; and
                              ``(iii) any other contract or side 
                          agreement that has the effect of adjusting the 
                          effective price of the drug, including 
                          agreements to purchase non-drug products.
                      ``(B) Exempt transactions.--The Secretary may, by 
                  regulation, exempt from the calculation of the average 
                  foreign price of a drug those prices realized by a 
                  manufacturer in transactions that are entered into for 
                  charitable purposes, for research purposes, or under 
                  other unusual circumstances, if the Secretary 
                  determines that the exemption is in the public interest 
                  and is consistent with the purposes of this section.''.
      (c) Conforming Amendments.--Such section is further amended--
              (1) in subsection (h)(1)(A), by adding after and below 
          clause (v) the following new sentence:
                  ``Such term also includes the Secretary with respect to 
                  the offering of the Federal national prescription drug 
                  discount card program described in subsection 
                  (a)(1)(C).'';
              (2) in subsection (h)(2)(A), by adding at the end the 
          following: ``The Secretary shall establish a separate procedure 
          for the qualification of the Federal national prescription drug 
          discount card program described in subsection (a)(1)(C).''; and
              (3) in subsection (k)(6), by inserting before the period at 
          the end the following: ``, except in the case of the Federal 
          national prescription drug discount card program described in 
          subsection (a)(1)(C)''.
      (d) Implementation.--
              (1) Availability of funds.--Notwithstanding any other 
          provision of law, funds provided under section 1015 of the 
          Medicare Prescription Drug, Improvement, and Modernization Act 
          of 2003 (Public Law 108-173) shall be available to the 
          Secretary of Health and Human Services for reasonable 
          administrative costs in offering the Federal national 
          prescription drug discount card program described in section 
          1860D-31(a)(1)(C) of the Social Security Act, as added by 
          subsection (a).
              (2) Timely implementation.--The Secretary shall take such 
          steps as may be required to provide for the offering of such 
          program during the annual open enrollment period occurring in 
          November, 2004.
target: Medicare Drug Card Guaranteed Savings Act - Amends part D (Voluntary Prescription Drug Benefit Program) of title XVIII (Medicare) of the Social Security Act to provide for the offering of a Federal national prescription drug discount card program. Charges a $30 fee for the card under the program. Provides for direct negotiations by the Secretary of Health and Human Services with prescription drug manufacturers to obtain discount prices that are to be less than prices otherwise available in the retail market. Provides that: (1) for periods beginning with January 1, 2005, the only discount card program in which an individual may be enrolled shall be the Federal national prescription drug discount card program; and (2) individuals enrolled in another program as of December 31, 2004, who do not affirmatively disenroll from all discount card programs are deemed to be enrolled in such Federal national prescription drug discount card program.
feat_title: To amend part D of title XVIII of the Social Security Act to provide for the offering of a Federal national prescription drug discount card program.