To assure cost credibility of the Medicare prescription drug benefit.

February 9, 2005

Mr. STARK introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To assure cost credibility of the Medicare prescription drug benefit.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Medicare Drug Cost Credibility Act of 2005'.

SEC. 2. COST CREDIBILITY FOR MEDICARE PRESCRIPTION DRUG BENEFIT.

(a) Cost Credibility-

(1) IN GENERAL- If the net mandatory outlays for the medicare prescription drug benefit for a fiscal year (as contained in tables accompanying the Budget of the United States submitted by the President for that fiscal year) exceed the original CBO cost estimate of such benefit for that fiscal year (as described in paragraph (2)), the Secretary shall, notwithstanding section 1860D-11(i)(1) of the Social Security Act (42 U.S.C. 1395w-111(i)(1)), utilize negotiating authority in order to reduce the acquisition cost for prescription drugs. Such authority shall apply for benefits for the calendar year that begins in such fiscal year and for benefits for all subsequent calendar years.

(2) ORIGINAL CBO COST ESTIMATE- For purposes of paragraph (1), the original CBO cost estimate for the medicare prescription drug benefit for a fiscal year is the following (as specified in the communication of November 20, 2003, of the Director of the Congressional Budget Office to conferees for `CBO Estimate of Effect on Direct Spending and Revenues of Conference Agreement on H.R. 1' as the changes in direct spending (outlays) attributable to the prescription drug benefit (titleI)):

(A) For fiscal year 2006, $25.7 billion.

(B) For fiscal year 2007, $39.0 billion.

(C) For fiscal year 2008, $44.6 billion.

(D) For fiscal year 2009, $48.7 billion.

(E) For fiscal year 2010, $53.7 billion.

(F) For fiscal year 2011, $58.6 billion.

(G) For fiscal year 2012, $65.3 billion.

(H) For fiscal year 2013, $73.1 billion.

(b) Conforming Amendment- Section 1860D-11(i)(1) of the Social Security Act (42 U.S.C. 1395w-111(i)(1)) is amended by inserting `subject to section 2(a) of the Medicare Drug Cost Credibility Act of 2005' before `may not interfere'.

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