To reduce to the cost of quality health care coverage and improve the availability of health care coverage for all Americans.

January 24, 2005

Mr. KENNEDY (for himself, Mr. REID, Ms. STABENOW, Mr. CORZINE, Mr. SCHUMER, Ms. MIKULSKI, Mr. AKAKA, Mr. INOUYE, Mr. LEVIN, Mr. KERRY, Mr. LAUTENBERG, Mr. ROCKEFELLER, Mr. DODD, Mr. PRYOR, and Mr. DURBIN) introduced the following bill; which was read twice and referred to the Committee on Finance

To reduce to the cost of quality health care coverage and improve the availability of health care coverage for all Americans.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Affordable Health Care Act'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--MAKING PRESCRIPTION DRUGS MORE SAFE AND AFFORDABLE

Subtitle A--Access to Prescription Drugs

Sec. 101. Findings.

Sec. 102. Repeal of certain section regarding importation of prescription drugs.

Sec. 103. Importation of prescription drugs; waiver of certain import restrictions.

Sec. 104. Additional waivers regarding personal importation; enforcement policies of Secretary.

Sec. 105. Disposition of certain drugs denied admission into United States.

Sec. 106. Civil actions regarding property.

Sec. 107. Wholesale distribution of drugs; Statements regarding prior sale, purchase, or trade.

Sec. 108. Repeal of importation exemption under Controlled Substances Import and Export Act.

Sec. 109. Effect on administration practices.

Subtitle B--Ensuring Drug Safety

Sec. 121. Drug safety.

Sec. 122. Report by GAO on drug safety.

TITLE II--MODERNIZING THE HEALTH CARE SYSTEM

Sec. 201. Amendment to the Public Health Service Act.

Sec. 202. Standardized measures of quality health care and data collection.

TITLE III--MAKING HEALTH CARE MORE AFFORDABLE FOR CHILDREN AND PREGNANT WOMEN

Subtitle A--Covering all Children

Sec. 300. Findings.

Chapter 1--Expanded Coverage of Children Under Medicaid and SCHIP

Sec. 301. State option to receive 100 percent fmap for medical assistance for children in poverty in exchange for expanded coverage of children in working poor families under title XXI.

Sec. 302. Elimination of cap on SCHIP funding for States that expand eligibility for children.

Chapter 2--State Options for Incremental Child Coverage Expansions

Sec. 311. State option to enroll low-income children of State employees in SCHIP.

Sec. 312. State option for passive renewal of eligibility for children under medicaid and SCHIP.

Chapter 3--Tax Incentives for Health Insurance Coverage of Children

Sec. 321. Refundable credit for health insurance coverage of children.

Sec. 322. Forfeiture of personal exemption for any child not covered by health insurance.

Chapter 4--Miscellaneous

Sec. 331. Requirement for group market health insurers to offer dependent coverage option for workers with children.

Sec. 332. Effective date.

Subtitle B--Covering Pregnant Women

Sec. 351. State option to expand or add coverage of pregnant women under the medicaid program and State Children's Health Insurance Program.

Sec. 352. Optional coverage of legal immigrants under the medicaid program and SCHIP.

Sec. 353. Promoting cessation of tobacco use under the medicaid program.

Sec. 354. Promoting cessation of tobacco use under the maternal and child health services block grant program.

Sec. 355. State option to provide family planning services and supplies to individuals with incomes that do not exceed a State's income eligibility level for medical assistance.

Sec. 356. State option to extend the postpartum period for provision of family planning services and supplies.

Sec. 357. State option to provide wrap-around SCHIP coverage to children who have other health coverage.

Sec. 358. Innovative outreach programs.

Subtitle C--Affirming the Importance of Medicaid

Sec. 361. Sense of the Senate.

TITLE IV--REDUCING HEALTH CARE COSTS FOR SMALL EMPLOYERS

Subtitle A--Tax Relief

Sec. 401. Refundable credit for small business employee health insurance expenses.

Subtitle B--Three-Share Program

Sec. 421. Three-share programs.

TITLE I--MAKING PRESCRIPTION DRUGS MORE SAFE AND AFFORDABLE

Subtitle A--Access to Prescription Drugs

SEC. 101. FINDINGS.

Congress finds that--

(1) Americans unjustly pay up to 5 times more to fill their prescriptions than consumers in other countries;

(2) the United States is the largest market for pharmaceuticals in the world, yet American consumers pay the highest prices for brand pharmaceuticals in the world;

(3) a prescription drug is neither safe nor effective to an individual who cannot afford it;

(4) allowing and structuring the importation of prescription drugs to ensure access to safe and affordable drugs approved by the Food and Drug Administration will provide a level of safety to American consumers that they do not currently enjoy;

(5) American seniors alone will spend $1,800,000,000,000 on pharmaceuticals over the next 10 years; and

(6) allowing open pharmaceutical markets could save American consumers at least $38,000,000,000 each year.

SEC. 102. REPEAL OF CERTAIN SECTION REGARDING IMPORTATION OF PRESCRIPTION DRUGS.

Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.) is amended by striking section 804.

SEC. 103. IMPORTATION OF PRESCRIPTION DRUGS; WAIVER OF CERTAIN IMPORT RESTRICTIONS.

(a) IN GENERAL- Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by section 102, is further amended by inserting after section 803 the following:

`SEC. 804. COMMERCIAL AND PERSONAL IMPORTATION OF PRESCRIPTION DRUGS.

`(a) IMPORTATION OF PRESCRIPTION DRUGS-

`(1) IN GENERAL- The Secretary shall in accordance with this section provide by regulation that, in the case of qualifying drugs imported or offered for import into the United States from registered exporters or by registered importers--

`(A) the limitation on importation that is established in section 801(d)(1) is waived; and

`(B) the standards referred to in section 801(a) regarding admission of the drugs are subject to subsection (g) of this section (including with respect to qualifying drugs to which section 801(d)(1) does not apply).

`(2) IMPORTERS- A qualifying drug may not be imported under paragraph (1) unless--

`(A) the drug is imported by a pharmacy or a wholesaler that is a registered importer; or

`(B) the drug is imported by an individual for personal use or for the use of a family member of the individual (not for resale) from a registered exporter.

`(3) RULE OF CONSTRUCTION- This section shall apply only with respect to a drug that is imported or offered for import into the United States--

`(A) by a registered importer; or

`(B) from a registered exporter to an individual.

`(4) DEFINITIONS-

`(A) REGISTERED EXPORTER; REGISTERED IMPORTER- For purposes of this section:

`(i) The term `registered exporter' means an exporter for which a registration under subsection (b) has been approved and is in effect.

`(ii) The term `registered importer' means a pharmacy, group of pharmacies, or a wholesaler for which a registration under subsection (b) has been approved and is in effect.

`(iii) The term `registration condition' means a condition that must exist for a registration under subsection (b) to be approved.

`(B) QUALIFYING DRUG- For purposes of this section, the term `qualifying drug' means a prescription drug, other than any of the following:

`(i) A controlled substance, as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802).

`(ii) A biological product, as defined in section 351 of the Public Health Service Act (42 U.S.C. 262).

`(iii) An infused drug, including a peritoneal dialysis solution.

`(iv) An intravenously injected drug.

`(v) A drug that is inhaled during surgery.

`(C) OTHER DEFINITIONS- For purposes of this section:

`(i) The term `exporter' means a person that is in the business of exporting a drug from Canada to individuals in the United States or that, pursuant to submitting a registration under subsection (b), seeks to be in such business.

`(ii) The term `importer' means a pharmacy, a group of pharmacies, or a wholesaler that is in the business of importing a drug into the United States or that, pursuant to submitting a registration under subsection (b), seeks to be in such business.

`(iii) The term `pharmacist' means a person licensed by a State to practice pharmacy, including the dispensing and selling of prescription drugs.

`(iv) The term `pharmacy' means a person that--

`(I) is licensed by a State to engage in the business of selling prescription drugs at retail; and

`(II) employs 1 or more pharmacists.

`(v) The term `prescription drug' means a drug that is described in section 503(b)(1).

`(vi) The term `wholesaler'--

`(I) means a person licensed as a wholesaler or distributor of prescription drugs in the United States under section 503(e)(2)(A); and

`(II) does not include a person authorized to import drugs under section 801(d)(1).

`(D) PERMITTED COUNTRY- The term `permitted country' means--

`(i) Australia;

`(ii) Canada;

`(iii) a member country of the European Union as of January 1, 2003;

`(iv) Japan;

`(v) New Zealand; and

`(vi) Switzerland.

`(b) REGISTRATION OF IMPORTERS AND EXPORTERS-

`(1) REGISTRATION OF IMPORTERS AND EXPORTERS- A registration condition is that the importer or exporter involved (referred to in this subsection as a `registrant') submits to the Secretary a registration containing the following:

`(A) The name of the registrant and an identification of all places of business of the registrant that relate to qualifying drugs, including each warehouse or other facility owned or controlled by, or operated for, the registrant.

`(B) Such information as the Secretary determines to be necessary to demonstrate that the registrant is in compliance with registration conditions under--

`(i) in the case of an importer, subsections (c), (d), (e), (g), and (j) (relating to the sources of exported drugs; the inspection of facilities of the importer; the payment of fees; compliance with the standards referred to in section 801(a); and maintenance of records and samples); or

`(ii) in the case of an exporter, subsections (c), (d), (f), (g), (h), (i), and (j) (relating to the sources of exported drugs; the inspection of facilities of the exporter and the marking of compliant shipments; the payment of fees; and compliance with the standards referred to in section 801(a); being licensed as a pharmacist; conditions for individual importation from Canada; and maintenance of records and samples).

`(C) An agreement by the registrant that the registrant will not under subsection (a) import or export any drug that is not a qualifying drug.

`(D) An agreement by the registrant to--

`(i) notify the Secretary of a recall or withdrawal of a drug distributed in a permitted country that the registrant has exported or imported, or intends to export or import, to the United States under subsection (a);

`(ii) provide for the return to the registrant of such drug; and

`(iii) cease, or not begin, the exportation or importation of such drug unless the Secretary has notified the registrant that exportation or importation of such drug may proceed.

`(E) An agreement by the registrant to ensure and monitor compliance with each registration condition, to promptly correct any noncompliance with such a condition, and to promptly report to the Secretary any such noncompliance.

`(F) A plan describing the manner in which the registrant will comply with the agreement under subparagraph (E).

`(G) An agreement by the registrant to enforce a contract under subsection (c)(3)(B) against a party in the chain of custody of a qualifying drug with respect to the authority of the Secretary under clauses (ii) and (iii) of that subsection.

`(H) An agreement by the registrant to notify the Secretary of--

`(i) any change that the registrant intends to make regarding information provided under subparagraph (A) or (B); and

`(ii) any change that the registrant intends to make in the compliance plan under subparagraph (F).

`(I) In the case of an exporter--

`(i) An agreement by the exporter that a qualifying drug will not under subsection (a) be exported to any individual not authorized pursuant to subsection (a)(2)(B) to be an importer of such drug.

`(ii) An agreement to post a bond, payable to the Treasury of the United States if, after opportunity for an informal hearing, the Secretary determines that the exporter has exported a drug to the United States that is not a qualifying drug or that is not in compliance with subsections (g) or (i), that is equal in value to the lesser of--

`(I) the value of drugs exported by the exporter to the United States in a typical 4-week period over the course of a year under this section; or

`(II) $1,000,000.

`(J) Such other provisions as the Secretary may require to protect the public health while permitting--

`(i) the importation by pharmacies, groups of pharmacies, wholesalers as registered importers of qualifying drugs under subsection (a); and

`(ii) importation by individuals of qualifying drugs under subsection (a).

`(2) APPROVAL OR DISAPPROVAL OF REGISTRATION-

`(A) IN GENERAL- Not later than 90 days after the date on which a registrant submits to the Secretary a registration under paragraph (1), the Secretary shall notify the registrant whether the registration is approved or is disapproved. The Secretary shall disapprove a registration if there is reason to believe that the registrant is not in compliance with one or more registration conditions, and shall notify the registrant of such reason. In the case of a disapproved registration, the Secretary shall subsequently notify the registrant that the registration is approved if the Secretary determines that the registrant is in compliance with such conditions.

`(B) CHANGES IN REGISTRATION INFORMATION- Not later than 30 days after receiving a notice under paragraph (1)(G) from a registrant, the Secretary shall determine whether the change involved affects the approval of the registration of the registrant under paragraph (1), and shall inform the registrant of the determination.

`(3) PUBLICATION OF CONTACT INFORMATION FOR REGISTERED EXPORTERS- Through the Internet website of the Food and Drug Administration, the Secretary shall make readily available to the public a list of registered exporters, including contact information for the exporters. Promptly after the approval of a registration submitted under paragraph (1), the Secretary shall update the Internet website accordingly.

`(4) SUSPENSION AND TERMINATION-

`(A) SUSPENSION- With respect to the effectiveness of a registration submitted under paragraph (1):

`(i) Subject to clause (ii), if the Secretary determines, after notice and opportunity for a hearing, that the registrant has failed to maintain substantial compliance with all registration conditions, the Secretary may suspend the registration.

`(ii) If the Secretary determines that, under color of the registration, the exporter has exported a drug or the importer has imported a drug that is not a qualifying drug, or a drug that does not meet the criteria under subsection (g)(2)(A), or has exported a qualifying drug to an individual in violation of subsection (i)(1)(F), the Secretary shall immediately suspend the registration. A suspension under the preceding sentence is not subject to the provision by the Secretary of prior notice, and the Secretary shall provide to the registrant an opportunity for a hearing not later than 10 days after the date on which the registration is suspended.

`(iii) The Secretary may reinstate the registration, whether suspended under clause (i) or (ii), if the Secretary determines that the registrant has demonstrated that further violations of registration conditions will not occur.