To amend part D of title XVIII of the Social Security Act to provide for negotiation of fair prices for Medicare prescription drugs.

January 24, 2005

Mr. FEINGOLD introduced the following bill; which was read twice and referred to the Committee on Finance

To amend part D of title XVIII of the Social Security Act to provide for negotiation of fair prices for Medicare prescription drugs.

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 `Efficiency in Government Health Care Spending Act'.

SEC. 2. FINDINGS.

Congress makes the following findings:

(1) Prohibiting the Federal Government from negotiating prescription drug prices with manufacturers fails to take advantage of the purchasing power of the Medicare program.

(2) Negotiating prescription drug prices can reduce the costs of prescription drugs for both the Medicare program and taxpayers.

(3) A 2002 study by the inspector general of the Department of Health and Human Services found that--

(A) both the Medicare program and the beneficiaries of the Medicare program continually pay too much for medical equipment and medical supplies; and

(B) if the Medicare program paid the same prices for 16 health care supplies as the Department of Veterans Affairs, which directly negotiates prices with manufacturers, pays for those supplies, the Federal Government could save $958,000,000 each year.

SEC. 3. SENSE OF THE SENATE REGARDING THE USE OF AUTHORITY TO NEGOTIATE PRICES FOR MEDICARE PRESCRIPTION DRUGS.

It is the sense of the Senate that the Secretary of Health and Human Services should exercise the authority under section 1860D-11(i)(1) of the Social Security Act (42 U.S.C. 1395w-111(i)(1)), as amended by section 4, so as to assure an affordable medicare drug benefit for medicare beneficiaries and taxpayers.

SEC. 4. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION DRUGS.

(a) NEGOTIATION- Section 1860D-11 of the Social Security Act (42 U.S.C. 1395w-111) is amended by striking subsection (i) (relating to noninterference) and by inserting the following:

`(i) AUTHORITY TO NEGOTIATE; NO NATIONAL FORMULARY-

`(1) AUTHORITY TO NEGOTIATE PRICES WITH MANUFACTURERS- In order to ensure that beneficiaries enrolled under prescription drug plans and MA-PD plans pay the lowest possible price, the Secretary shall have authority similar to that of other Federal entities that purchase prescription drugs in bulk to negotiate contracts with manufacturers of covered part D drugs, consistent with the requirements and in furtherance of the goals of providing quality care and containing costs under this part.

`(2) NO NATIONAL FORMULARY- In order to promote competition under this part and in carrying out this part, the Secretary may not require a particular formulary for covered part D drugs.

(b) EFFECTIVE DATE- The amendment made by this section shall take effect as if included in the enactment of section 101(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2071).

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