PRINTER'S NO. 369
No. 331 Session of 1999
INTRODUCED BY SALVATORE, RHOADES, COSTA, BELL, MELLOW, HOLL,
SLOCUM, O'PAKE, LEMMOND, BOSCOLA, STOUT AND KASUNIC,
FEBRUARY 11, 1999
REFERRED TO AGING AND YOUTH, FEBRUARY 11, 1999
AN ACT
1 Providing for substantial reductions in the price of
2 prescription drugs for Medicare beneficiaries.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Short title.
6 This act shall be known and may be cited as the Prescription
7 Drug Fairness for Seniors Act.
8 Section 2. Findings and purposes.
9 (a) Findings.--The General Assembly finds as follows:
10 (1) Manufacturers of prescription drugs engage in
11 pricing that requires many older Americans to pay
12 substantially more for prescription drugs than the drug
13 manufacturers' most favored customers, such as the Federal
14 Government.
15 (2) On average, older Americans who buy their own
16 prescription drugs pay twice as much for prescription drugs
17 as the drug manufacturers' most favored customers. In some
1 cases, older Americans pay over 15 times more for
2 prescription drugs than the most favored customers.
3 (3) The pricing by major drug manufacturers contributes
4 to the financial hardship and impairs the health and well-
5 being of millions of older Americans. More than one in eight
6 older Americans are forced to choose between buying their
7 food and buying their medicines.
8 (4) Most federally funded health care programs,
9 including Medicaid, the Veterans Health Administration, the
10 Public Health Service and the Indian Health Service, obtain
11 prescription drugs for their beneficiaries at low prices.
12 Medicare beneficiaries are denied this benefit and cannot
13 obtain their prescription drugs at the favorable prices
14 available to other federally funded health care programs.
15 (5) It has been estimated that implementation of the
16 policy set forth in this act will reduce prescription prices
17 for Medicare beneficiaries by more than 40%.
18 (6) In addition to substantially lowering health care
19 costs for older Americans, implementation of the policy set
20 forth in this act will significantly improve the health and
21 well-being of older Americans.
22 (b) Purpose.--The purpose of this act is to make
23 prescription drugs available to Medicare beneficiaries at
24 substantially reduced prices, by allowing pharmacies to purchase
25 drugs for Medicare beneficiaries at the substantially reduced
26 price available under the Federal Supply Schedule.
27 Section 3. Definitions.
28 The following words and phrases when used in this act shall
29 have the meanings given to them in this section unless the
30 context clearly indicates otherwise:
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1 "Covered outpatient drug." This term shall have the meaning
2 given that term in section 1927(k)(2) of the Social Security Act
3 (49 Stat. 620, 42 U.S.C. 1396r-8(k)(2)).
4 "Medicare beneficiary." An individual residing in this
5 Commonwealth who is entitled to benefits under Part A of Title
6 XVIII of the Social Security Act (49 Stat. 620, 42 U.S.C. 1396r-
7 8(k)(2)) or enrolled under Part B of such title, or both.
8 "Medicare drug benefit card." A card issued under section 4.
9 "Secretary." The Secretary of Aging of the Commonwealth.
10 Section 4. Medicare beneficiary drug benefit card.
11 The secretary shall furnish to each Medicare beneficiary a
12 drug benefit card that enables the beneficiary to purchase
13 covered prescription drugs from participating pharmacies at
14 reduced prices under section 5.
15 Section 5. Participating pharmacies.
16 (a) Agreements to participate.--A pharmacy may enter into an
17 agreement with the secretary that enables the pharmacy to sell
18 covered outpatient drugs to holders of Medicare drug benefit
19 cards at a reduced price by authorizing the pharmacy to operate
20 as a participating pharmacy under this act.
21 (b) Right of participating pharmacies to obtain drugs.--An
22 agreement under this section shall entitle the participating
23 pharmacy to purchase any covered outpatient drug that is listed
24 on the Federal Supply Schedule of the General Services
25 Administration at the participating pharmacy discount price for
26 that drug determined under subsection (d).
27 (c) Quantity of drugs purchased.--An agreement under this
28 section shall permit the participating pharmacy to purchase
29 under this act as much of a covered outpatient drug as is sold
30 by the pharmacy to holders of Medicare drug benefit cards.
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1 (d) Participating pharmacy discount price.--
2 (1) The secretary shall determine a participating
3 pharmacy discount price for each covered outpatient drug.
4 (2) The participating pharmacy discount price for a
5 covered outpatient drug shall be determined by adding:
6 (i) the price at which the drug is available to
7 Federal agencies from the Federal Supply Schedule under
8 38 U.S.C. § 8126 (relating to limitation on prices of
9 drugs procured by Department and certain other Federal
10 agencies); plus
11 (ii) an amount that reflects the administrative
12 costs incurred by the pharmacist dispensing the drug.
13 Section 6. Administration.
14 (a) General rule.--The secretary shall administer this act
15 in a manner that uses existing methods of obtaining and
16 distributing drugs to the maximum extent possible, consistent
17 with efficiency and cost effectiveness.
18 (b) Regulations.--The secretary shall issue such regulations
19 as may be necessary to implement this act.
20 Section 7. Reports to General Assembly.
21 (a) General rule.--Not later than two years after the
22 effective date of this act, and annually thereafter, the
23 secretary shall report to the General Assembly regarding the
24 effectiveness of this act in:
25 (1) Protecting Medicare beneficiaries from
26 discriminatory pricing by drug manufacturers.
27 (2) Making prescription drugs available to Medicare
28 beneficiaries at substantially reduced prices.
29 (b) Consultation.--In preparing the reports, the secretary
30 shall consult with public health experts, affected industries,
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1 organizations representing consumers and older Americans and
2 other interested persons.
3 (c) Recommendations.--The secretary shall include in the
4 reports any recommendations considered appropriate for changes
5 in this act to further reduce the cost of covered outpatient
6 drugs to Medicare beneficiaries.
7 Section 8. Effective date.
8 This act shall take effect in 60 days.
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