,i  #aac? ,,congress  #a/ ,session  ,h4 
,r4 #ibh  ,,9 ,,! ,,h\se ,,(            
,,repres5tatives  ,febru>y #bh1 #bjac   
,ms4 ,s*ak[sky 7= h]self1 ,mr4 ,f>r1    
,ms4 ,lee ( ,cali=nia1 ,mr4 ,george     
,mill] ( ,cali=nia1 & ,ms4 ,p+ree (     
,ma9e7 introduc$ ! foll[+ bill2 :i* 0   
ref]r$ to ! ,committee on ,en]gy &      
,comm]ce1 & 9 addition to ! ,committee  
on ,ways & ,means1 = a p]iod to be      
subsequ5tly det]m9$ by ! ,speak]1 9 ea* 
case = consid]ation ( su* provisions z  
fall )9 ! jurisdiction ( ! committee    
conc]n$  ,a ,,bill  ,to am5d title      
,,xviii ( ! ,social ,security ,act to   
deliv] a mean+ful b5efit & l[]          
prescription drug prices "u ! ,m$ic>e   
,program4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,m$ic>e ,prescription ,drug
 ,sav+s & ,*oice ,act ( #bjac4  #b4     
,e/abli%m5t ( ,m$ic>e op]at$            
prescription drug plan option  7a7 ,9   
g5]al ,subp>t #b ( "p ,d ( title ,,xviii
 ( ! ,social ,security ,act is am5d$ by 
ins]t+ aft] section #ahfj;,d-#aa 7#db   

,u4,s4,c4 #aciew-#aaa7 ! foll[+ new     
section3  #ahfj;,d-#aa;,a4 ,m$ic>e      
op]at$ prescription drug plan option    
7a7 ,9 g5]al ,not)/&+ any o!r provision 
( ?is "p1 = ea* ye> 7beg9n+ ) #bjab71 9 
addition to any plans (f]$ "u section   
#ahfj;,d-#aa1 ! ,secret>y %all (f] "o or
 m ,m$ic>e op]at$ prescription drug     
plans 7z def9$ 9 subsection 7c77 ) a    
s]vice area t consi/s ( ! entire ,unit$ 
,/ates & %all ent] into negotiations 9  
accordance ) subsection 7b7 )           
ph>maceutical manufactur]s to r$uce !   
pur*ase co/ ( cov]$ "p ,d drugs =       
eligible "p ,d individuals :o enroll 9  
su* a plan4  7b7 ,negotiations ,not)/&+ 
section #ahfj;,d-#aa7;i71 = purposes (  
(f]+ a ,m$ic>e op]at$ prescription drug 
plan "u ?is section1 ! ,secret>y %all   
negotiate ) ph>maceutical manufactur]s )
 respect to ! pur*ase price ( cov]$ "p  
,d drugs 9 a ,m$ic>e op]at$ prescription
 drug plan & %all enc\rage ! use ( m    
af=dable !rapeutic equival5ts to ! ext5t
 su* practices d n ov]ride m$ical       

necessity z det]m9$ by ! prescrib+      
physician4 ,to ! ext5t practicable &    
consi/5t ) ! previ\s s5t5ce1 ! ,secret>y
 %all implem5t /rategies simil> to ^?   
us$ by o!r ,f$]al pur*as]s (            
prescription drugs1 & o!r /rategies1    
includ+ ! use ( a =mul>y & =mul>y       
inc5tives 9 subsection 7e71 to r$uce !  
pur*ase co/ ( cov]$ "p ,d drugs4  7c7   
,m$ic>e op]at$ prescription drug plan   
def9$ ,= purposes ( ?is "p1 ! t]m       
,m$ic>e op]at$ prescription drug plan   
means a prescription drug plan t (f]s   
qualifi$ prescription drug cov]age &    
access to negotiat$ prices describ$ 9   
section #ahfj;,d-#b7;a77#a77;,a74 ,su* a
 plan may (f] supplem5tal prescription  
drug cov]age 9 ! same mann] z o!r       
qualifi$ prescription drug cov]age (f]$ 
by o!r prescription drug plans4  7d7    
,mon?ly b5efici>y premium  7#a7         
,qualifi$ prescription drug cov]age ,!  
mon?ly b5efici>y premium = qualifi$     
prescription drug cov]age & access to   
negotiat$ prices describ$ 9 section     

#ahfj;,d-#b7;a77#a77;,a7 to be *>g$ "u a
 ,m$ic>e op]at$ prescription drug plan  
%all be uni=m nationally4 ,su* premium =
 mon?s 9 #bjad & ea* succe$+ ye> %all be
 bas$ on ! av]age mon?ly p] capita      
actu>ial co/ ( (f]+ ! ,m$ic>e op]at$    
prescription drug plan = ! ye> involv$1 
includ+ adm9i/rative exp5ses4  7#b7     
,supplem5tal prescription drug cov]age  
,ins(> z a ,m$ic>e op]at$ prescription  
drug plan (f]s supplem5tal prescription 
drug cov]age1 ! ,secret>y may adju/ !   
am\nt ( ! premium *>g$ "u p>agraph 7#a74
  7e7 ,use ( a =mul>y & =mul>y inc5tives
  7#a7 ,9 g5]al ,) respect to ! op]ation
 ( a ,m$ic>e op]at$ prescription drug   
plan1 ! ,secret>y %all e/abli% & apply a
 =mul>y 7& may include =mul>y inc5tives 
describ$ 9 p>agraph 7#b77;,c77ii77 9    
accordance ) ?is subsection 9 ord] to-- 
7,a7 increase pati5t safety2  7,b7      
increase appropriate use & r$uce        
inappropriate use ( drugs2 &  7,c7 rew>d
 value4  7#b7 ,developm5t ( initial     
=mul>y  7,a7 ,9 g5]al ,9 select+ cov]$  

"p ,d drugs = inclusion 9 a =mul>y1 !   
,secret>y %all consid] cl9ical b5efit & 
price4  7,b7 ,role ( ,,ahrq ,! ,director
 ( ! ,ag5cy = ,heal?c>e ,rese>* &       
,quality %all be responsible = assess+ !
 cl9ical b5efit ( cov]$ "p ,d drugs &   
mak+ recomm5dations to ! ,secret>y      
reg>d+ :i* drugs %\ld be includ$ 9 !    
=mul>y4 ,9 conduct+ su* assessm5ts &    
mak+ su* recomm5dations1 ! ,director    
%all--  7i7 consid] safety conc]ns      
includ+ ^? id5tifi$ by ! ,f$]al ,food & 
,drug ,adm9i/ration2  7ii7 use available
 data & evaluations1 ) priority giv5 to 
r&omiz$ controll$ trials1 to exam9e     
cl9ical effectiv5ess1 comp>ative        
effectiv5ess1 safety1 & enhanc$         
compliance ) a drug regim52  7iii7 use !
 same classes ( drugs develop$ by ,unit$
 ,/ates ,ph>macopeia = ?is "p2  7iv7    
consid] evaluations made by--  7,i7 !   
,director "u section #ajac ( ,m$ic>e    
,prescription ,drug1 ,improvem5t1 &     
,mod]nization ,act ( #bjjc2  7,,ii7 o!r 
,f$]al entities1 su* z ! ,secret>y (    

,vet]ans ,affairs2 &  7,,iii7 o!r       
private & public entities1 su* z ! ,drug
 ,effectiv5ess ,review ,project &       
,m$icaid programs2 &  7v7 recomm5d to ! 
,secret>y--  7,i7 ^? drugs 9 a class t  
provide a great] cl9ical b5efit1 includ+
 few] safety conc]ns or less risk (     
side-effects1 ?an ano!r drug 9 ! same   
class t %\ld be includ$ 9 ! =mul>y2     
7,,ii7 ^? drugs 9 a class t provide less
 cl9ical b5efit1 includ+ great] safety  
conc]ns or a great] risk ( side-effects1
 ?an ano!r drug 9 ! same class t %\ld be
 exclud$ f ! =mul>y2 &  7,,iii7 drugs 9 
a class ) same or simil> cl9ical b5efit 
= :i* x w\ld be appropriate = !         
,secret>y to competitively bid 7or      
negotiate7 = placem5t on ! =mul>y4  7,c7
 ,consid]ation ( ,,ahrq recomm5dations  
7i7 ,9 g5]al ,! ,secret>y1 aft] tak+    
into consid]ation ! recomm5dations "u   
subp>agraph 7,b77v71 %all e/abli% a     
=mul>y1 & =mul>y inc5tives1 to enc\rage 
use ( cov]$ "p ,d drugs t--  7,i7 h a   
l[] co/ & provide a great] cl9ical      

b5efit ?an o!r drugs2  7,,ii7 h a l[]   
co/ ?an o!r drugs ) same or simil>      
cl9ical b5efit2 &  7,,iii7 drugs t h !  
same co/ b provide great] cl9ical b5efit
 ?an o!r drugs4  7ii7 ,=mul>y inc5tives 
,! =mul>y inc5tives "u clause 7i7 may be
 9 ! =m ( "o or m ( ! foll[+3  7,i7     
,ti]$ copaym5ts4  7,,ii7 ,ref]5ce pric+4
  7,,iii7 ,prior au?orization4  7,,iv7  
,/ep !rapy4  7,v7 ,m$ication !rapy      
managem5t4  7,,vi7 ,g5]ic drug          
sub/itution4  7iii7 ,flexibility ,9     
apply+ su* =mul>y inc5tives ! ,secret>y 
may decide n to impose any co/-%>+ = a  
cov]$ "p ,d drug = :i*--  7,i7 !        
elim9ation ( co/ %>+ w\ld be expect$ to 
increase compliance ) a drug regim52 &  
7,,ii7 compliance w\ld be expect$ to    
produce sav+s "u "p ,a or ,b or bo?4    
7#c7 ,limitations on =mul>y ,9 any      
=mul>y e/abli%$ "u ?is subsection1 !    
=mul>y may n be *ang$ dur+ a ye>1       
except--  7,a7 to add a g5]ic v]sion ( a
 cov]$ "p ,d drug t ent]$ ! m>ket2  7,b7
 to remove su* a drug = :i* a safety    

problem is f\nd2 &  7,c7 to add a drug t
 ! ,secret>y id5tifies z a drug :i*     
treats a condition = :i* !re has n      
previ\sly be5 a treatm5t option or = :i*
 a cle> & significant b5efit has be5    
demon/rat$ ov] o!r cov]$ "p ,d drugs4   
7#d7 ,add+ drugs to ! initial =mul>y    
7,a7 ,use ( advisory committee ,!       
,secret>y %all e/abli% & appo9t an      
advisory committee 79 ?is p>agraph      
ref]r$ to z ! advisory committee7--  7i7
 to review petitions f drug             
manufactur]s1 heal? c>e provid]         
organizations1 pati5t gr\ps1 & o!r      
entities = inclusion ( a drug 91 or o!r 
*anges to1 su* =mul>y2 &  7ii7 to       
recomm5d any *anges to ! =mul>y e/abli%$
 "u ?is subsection4  7,b7 ,composition  
,! advisory committee %all be compos$ ( 
#i memb]s & %all include repres5tatives 
( physicians1 ph>maci/s1 & consum]s &   
o!rs ) exp]tise 9 evaluat+ prescription 
drugs4 ,! ,secret>y %all select memb]s  
bas$ on _! k ( ph>maceuticals & !       
,m$ic>e population4 ,memb]s %all be     

deem$ to be special ,gov]nm5t employees 
= purposes ( apply+ ! conflict ( int]e/ 
provisions "u section #bjh ( title #ah1 
,unit$ ,/ates ,code1 & no waiv] ( su*   
provisions = su* a memb] %all be        
p]mitt$4  7,c7 ,consultation ,! advisory
 committee %all consult1 z necess>y1 )  
physicians :o are speciali/s 9 treat+ ! 
disease = :i* a drug is be+ consid]$4   
7,d7 ,reque/ = /udies ,! advisory       
committee may reque/ ! ,ag5cy =         
,heal?c>e ,rese>* & ,quality or an      
academic or rese>* in/itution to /udy & 
make a report on a petition describ$ 9  
subp>agraph 7,a77ii7 9 ord] to assess-- 
7i7 cl9ical effectiv5ess2  7ii7         
comp>ative effectiv5ess2  7iii7 safety2 
&  7iv7 enhanc$ compliance ) a drug     
regim54  7,e7 ,recomm5dations ,!        
advisory committee %all make            
recomm5dations to ! ,secret>y reg>d+--  
7i7 :e!r a cov]$ "p ,d drug is f\nd to  
provide a great] cl9ical b5efit1 includ+
 few] safety conc]ns or less risk (     
side-effects1 ?an ano!r drug 9 ! same   

class t is curr5tly includ$ 9 ! =mul>y &
 %\ld be includ$ 9 ! =mul>y2  7ii7 :e!r 
a cov]$ "p ,d drug is f\nd to provide   
less cl9ical b5efit1 includ+ great]     
safety conc]ns or a great] risk (       
side-effects1 ?an ano!r drug 9 ! same   
class t is curr5tly includ$ 9 ! =mul>y &
 %\ld n be includ$ 9 ! =mul>y2 &  7iii7 
:e!r a cov]$ "p ,d drug has ! same or   
simil> cl9ical b5efit to a drug 9 ! same
 class t is curr5tly includ$ 9 ! =mul>y 
& :e!r ! drug %\ld be includ$ 9 !       
=mul>y4  7,f7 ,limitations on review (  
manufactur] petitions ,! advisory       
committee %all n review a petition ( a  
drug manufactur] "u subp>agraph 7,a77ii7
 ) respect to a cov]$ "p ,d drug unless 
! petition is accompani$ by ! foll[+3   
7i7 ,raw data f cl9ical trials on !     
safety & effectiv5ess ( ! drug4  7ii7   
,any data f cl9ical trials conduct$ us+ 
active controls on ! drug or drugs t are
 ! curr5t /&>d ( c>e4  7iii7 ,any       
available data on comp>ative            
effectiv5ess ( ! drug4  7iv7 ,any o!r   

in=mation ! ,secret>y requires = !      
advisory committee to complete its      
review4  7,g7 ,response to              
recomm5dations ,! ,secret>y %all review 
! recomm5dations ( ! advisory committee 
& if ! ,secret>y accepts su*            
recomm5dations ! ,secret>y %all modify !
 =mul>y e/abli%$ "u ?is subsection      
accord+ly4 ,no?+ 9 ?is section %all     
preclude ! ,secret>y f add+ to ! =mul>y 
a drug = :i* ! ,director ( ! ,ag5cy =   
,heal?c>e ,rese>* & ,quality or !       
advisory committee has n made a         
recomm5dation4  7,h7 ,notice ( *anges ,!
 ,secret>y %all provide timely notice to
 b5efici>ies & heal? pr(essionals ab\t  
*anges to ! =mul>y or =mul>y inc5tives4 
7f7 ,in=m+ b5efici>ies ,! ,secret>y %all
 take /eps to in=m b5efici>ies ab\t !   
availability ( a ,m$ic>e op]at$ drug    
plan or plans includ+ provid+ in=mation 
9 ! annual h&book di/ribut$ to all      
b5efici>ies & add+ in=mation to !       
(ficial public ,m$ic>e ,web site relat$ 
to prescription drug cov]age available  

?r\gh ?is "p4  7g7 ,application ( all   
o!r requirem5ts = prescription drug     
plans ,except z specifically provid$ 9  
?is section1 any ,m$ic>e op]at$ drug    
plan %all meet ! same requirem5ts z     
apply to any o!r prescription drug plan1
 includ+ ! requirem5ts ( section        
#ahfj;,d-#d7;b77#a7 relat+ to assur+    
ph>macy access74  4  7b7 ,con=m+        
am5dm5ts  7#a7 ,section #ahfj;,d-#c7;a7 
( ! ,social ,security ,act 7#db         
,u4,s4,c4 #aciew-#ajc7;a77 is am5d$ by  
add+ at ! end ! foll[+ new p>agraph3    
7#d7 ,availability ( ! m$ic>e op]at$    
prescription drug plan ,a ,m$ic>e op]at$
 prescription drug plan 7z def9$ 9      
section #ahfj;,d-#aa;,a7c77 %all be (f]$
 nationally 9 accordance ) section      
#ahfj;,d-#aa;,a4  4  7#b7 7,a7 ,section 
#ahfj;,d-#c ( ! ,social ,security ,act  
7#db ,u4,s4,c4 #aciew-#ajc7 is am5d$ by 
add+ at ! end ! foll[+ new subsection3  
7c7 ,provisions only applicable 9 #bjjf 
?r\gh #bjac ,! provisions ( ?is section 
%all only apply ) respect to #bjjf ?r\gh

 #bjac4  4  7,b7 ,section               
#ahfj;,d-#aa7;g7 ( su* ,act 7#db        
,u4,s4,c4 #aciew-#aaa7;g77 is am5d$ by  
add+ at ! end ! foll[+ new p>agraph3    
7#h7 ,no au?ority = fallback plans aft] 
#bjac ,a fallback prescription drug plan
 %all n be available aft] ,decemb] #ca1 
#bjac4  4  7#c7 ,section                
#ahfj;,d-#ac7;c77#c7 ( ! ,social        
,security ,act 7#db ,u4,s4,c4           
#aciew-#aac7;c77#c77 is am5d$--  7,a7 9 
! head+1 by ins]t+ & ,m$ic>e op]at$     
prescription drug plans aft] ,fallback  
plans2 &  7,b7 by ins]t+ or a ,m$ic>e   
op]at$ prescription drug plan aft] a    
fallback prescription drug plan4  7#d7  
,section #ahfj;,d-#af7;b77#a7 ( !       
,social ,security ,act 7#db             
,u4,s4,c4#aciew-#aaf7;b77#a77 is am5d$--
  7,a7 9 subp>agraph 7,c71 by /rik+ &   
aft] ! semicolon at ! end2  7,b7 9      
subp>agraph 7,d71 by /rik+ ! p]iod at ! 
end & ins]t+ 2 &2 &  7,c7 by add+ at !  
end ! foll[+ new subp>agraph3  7,e7     
paym5ts = exp5ses incurr$ ) respect to !

 op]ation ( ,m$ic>e op]at$ prescription 
drug plans "u section #ahfj;,d-#aa;,a4  
4  7#e7 ,section #ahfj;,d-#da7;a7 ( !   
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aea7;a77 is am5d$ by add+ at !  
end ! foll[+ new p>agraph3  7#ai7       
,m$ic>e op]at$ prescription drug plan ,!
 t]m ,m$ic>e op]at$ prescription drug   
plan has ! mean+ giv5 su* t]m 9 section 
#ahfj;,d-#aa;,a7c74  4  #c4 ,improv$    
appeals process "u ! ,m$ic>e op]at$     
prescription drug plan ,section         
#ahfj;,d-#d7;h7 ( ! ,social ,security   
,act 7#db ,u4,s4,c4 #acjew-#ajd7;h77 is 
am5d$ by add+ at ! end ! foll[+ new     
p>agraph3  7#d7 ,appeals process =      
,m$ic>e op]at$ prescription drug plan   
7,a7 ,9 g5]al ,! ,secret>y %all develop 
a well-def9$ process = appeals = d5ials 
( b5efits "u ?is "p "u ! ,m$ic>e op]at$ 
prescription drug plan4 ,su* process    
%all be effici5t1 impose m9imal         
adm9i/rative burd5s1 & ensure ! timely  
procurem5t ( non-=mul>y drugs or        
exemption f =mul>y inc5tives :5 m$ically

 necess>y4 ,m$ical necessity %all be    
bas$ on pr(essional m$ical judgm5t1 !   
m$ical condition ( ! b5efici>y1 & o!r   
m$ical evid5ce4 ,su* appeals process    
%all include--  7i7 an initial review & 
det]m9ation made by ! ,secret>y2 &  7ii7
 = appeals d5i$ dur+ ! initial review & 
det]m9ation1 ! option ( an ext]nal      
review & det]m9ation by an indep5d5t    
entity select$ by ! ,secret>y4  7,b7    
,consultation 9 developm5t ( process ,9 
develop+ ! appeals process "u           
subp>agraph 7,a71 ! ,secret>y %all      
consult ) consum] & pati5t gr\ps1 z well
 z o!r key /akehold]s to ensure ! goals 
describ$ 9 subp>agraph 7,a7 are a*iev$4 
4