,i  #aaeth ,,congress  #b;d ,session    
,h4 ,r4 #fegd  ,,in ,,the ,,house ,,of  
,,representatives  ,july #bf1 #bjah,ms4 
,schakowsky introduced the following    
bill2 which was referred to the         
,committee on ,energy and ,commerce1 and
 in addition to the ,committee on ,ways 
and ,means1 for a period to be          
subsequently determined by the ,speaker1
 in each case for consideration of such 
provisions as fall within the           
jurisdiction of the committee concerned 
,a ,,bill  ,to amend part ,d of title   
,,xviii of the ,social ,security ,act to
 require the ,secretary of ,health and  
,human ,services to determine1 on behalf
 of ,medicare beneficiaries1 covered    
part ,d drug prices for certain covered 
part ,d drugs1 and for other purposes4  
#a4 ,short title ,this ,act may be cited
 as the ,medicare ,fair ,drug ,pricing  
,act of #bjah4  #b4 ,requirement to     
determine lower covered part ,d drug    
prices for certain covered part ,d drugs
  7a7 ,in general ,section              

#ahfj;,d-#aa7;i7 of the ,social         
,security ,act 7#db ,u4,s4,c4           
#aciew-#aaa7;i77 is amended--  7#a7 by  
striking 7i7 ,noninterference4--,in and 
inserting the following3  7i7           
,noninterference  7#a7 ,in general ,in  
2  7#b7 by inserting subject to         
paragraph 7#b71 after part12 and  7#c7  
by adding at the end the following new  
paragraph3  7#b7 ,exception for         
specified drugs  7,a7 ,requirement  7i7 
,in general ,notwithstanding paragraph  
7#a71 the part ,d price for specified   
drugs shall be determined in accordance 
with the process described in           
subparagraph 7,b74  7ii7 ,specified     
drugs ,for purposes of this paragraph1  
the term specified drug means a covered 
part ,d drug-- 7,i7 that is--  7aa7 a   
single source drug or biological2  7bb7 
not a biological product licensed       
pursuant to an application under section
 #cea7k7 of the ,public ,health ,service
 ,act2 and  7cc7 not both manufactured  
by more than two drug manufacturers and 

manufactured by at least one such       
manufacturer as a generic drug2 or      
7,,ii7 that-- 7aa7 is selected by the   
,secretary for purposes of this         
paragraph2 and  7bb7 the ,secretary     
determines is a covered part ,d drug    
with respect to which there is limited  
ability for ,,pdp sponsors and ,,ma     
organizations to negotiate manufacturer 
rebates1 such that the ,secretary       
determines that the failure to apply    
this paragraph will have a significant  
fiscal impact on the program under this 
title4  7iii7 ,part ,d price defined    
,for purposes of this paragraph1 the    
term part ,d price means1 with respect  
to a covered part ,d drug1 the price    
7including discounts1 rebates1 and other
 price concessions7 that may be charged 
to ,,pdp sponsors and ,,ma organizations
 for such drug for part ,d eligible     
individuals who are enrolled under a    
prescription drug plan or under an      
,,ma-,,pd plan4  7iv7 ,regulations for  
identification of specified drugs ,the  

,secretary1 not later than one year     
after the date of the enactment of this 
paragraph1 shall promulgate regulations 
regarding the identification of single  
source drugs and biologicals as         
specified drugs4  7v7 ,process to       
petition that drug is no longer a       
specified drug ,the ,secretary shall    
establish a process under which a       
manufacturer for a specified drug may   
petition the ,secretary for the         
rescinding of a previous identification 
of a drug as a specified drug under     
clause 7ii7 based upon the drug involved
 no longer being a specified drug4  7,b7
 ,price determination process ,for      
purposes of subparagraph 7,a71 the      
process described in this subparagraph1 
with respect to the part ,d price for a 
specified drug for a plan year1 is the  
following3  7i7 ,limited period for     
negotiation for first plan year  7,i7   
,in general ,the ,secretary shall       
negotiate such price with the drug      
manufacturer involved for a period of   

not more than #ij days beginning on the 
date of identification of the drug as a 
specified drug for such plan year by the
 ,secretary4  7,,ii7 ,successful        
negotiations ,in the case that such     
negotiation with respect to such        
#ij-;day period results in a price that 
is agreed to by both the ,secretary and 
manufacturer1 such price shall be the   
maximum part ,d price for such specified
 drug through the end of the plan year  
beginning after such period4  7ii7      
,secretary sets price for first plan    
year in case of failure to negotiate    
price ,in the case that negotiations    
under clause 7i71 with respect to a     
specified drug1 do not result in a price
 for such specified drug that is so     
agreed to by the ,secretary and drug    
manufacturer1 the ,secretary shall      
determine a price for such drug based   
on--  7,i7 the information provided to  
the ,secretary by the drug manufacturer 
during the #ij-;day period described in 
clause 7i77,i7 regarding costs          

associated with such drug that are      
applicable with respect to such drug    
manufacturer2  7,,ii7 in the case that  
payment is made for such drug by the    
,department of ,veterans ,affairs or    
under title ,,xix1 the net priced paid  
for such drug by such ,department or    
under such title1 as applicable2        
7,,iii7 ensuring affordability of such  
drug1 and accessibility to such drug1   
for individuals entitled to benefits    
under part ,a or enrolled under part ,b2
 and  7,,iv7 such other factors as the  
,secretary determines appropriate4  ,the
 price determined under this clause     
shall be the maximum part ,d price for  
such specified drug through the end of  
the plan year beginning after such      
determination of such price4  7iii7     
,price in subsequent plan years ,for    
each plan year that is subsequent to the
 plan year for which a price is         
determined for a specified drug under   
clause 7i7 or 7ii7 and in which1 on the 
first day of such subsequent plan year1 

the identification of such drug as a    
specified drug still applies1 the       
maximum price for such drug shall be the
 maximum part ,d price for the previous 
year determined under clause 7i7 or     
7ii71 as applicable1 increased by the   
percentage increase in the consumer     
price index for all urban consumers 7all
 items2 ,u4,s4 city average7 for the    
#ab-month period ending with ,june of   
the year before such subsequent plan    
year4  7iv7 ,consultation ,in           
determining a price for a specified drug
 under clause 7ii71 the ,secretary may  
consult with the ,comptroller ,general1 
the ,medicare ,payment ,advisory        
,commission1 the ,medicaid and ,,chip   
,payment and ,access ,commission1 or    
other outside1 independent experts4     
7,c7 ,no change in rules for formularies
  7i7 ,in general ,nothing in           
subparagraph 7,a7 or 7,b7 shall be      
construed to authorize the ,secretary to
 establish or require a particular      
formulary4  7ii7 ,construction ,clause  

7i7 shall not be construed as affecting 
the ,secretary's authority to ensure    
appropriate and adequate access to      
covered part ,d drugs under prescription
 drug plans and under ,,ma-,,pd plans1  
including compliance of such plans with 
formulary requirements under section    
#ahfj;,d-#d7;b77#c74  7,d7 ,construction
 ,nothing in this paragraph shall be    
construed as-- 7i7 preventing the       
sponsor of a prescription drug plan1 or 
an organization offering an ,,ma-,,pd   
plan1 from obtaining a discount or      
reduction of the price for a covered    
part ,d drug described in subparagraph  
7,a7 below the price negotiated under   
such subparagraph or determined under   
subparagraph 7,b72 or  7ii7 permitting  
the ,secretary to make proprietary data 
available to the public4  7,e7          
,definitions ,in this paragraph3  7i7   
,drug manufacturer ,the term drug       
manufacturer has the meaning given the  
term manufacturer in section            
#ahfj;,d-#ad;,a7g77#e74  7ii7 ,single   

source drug or biological ,the term     
single source drug or biological has the
 meaning given such term in section     
#ahdg;,a7c77#f77;,d74  4  7b7 ,requiring
 participation in negotiation process as
 condition of part ,d drug coverage     
,section #ahfj;,d-#ad;,a7b7 of the      
,social ,security ,act 7#db ,u4,s4,c4   
#aciew-#aad;a7b77 is amended by adding  
at the end the following new paragraph3 
7#e7 ,participation in negotiation      
process ,each agreement under this      
subsection shall include1 with respect  
to plans years beginning with plan year 
#bjai1 an agreement by the manufacturer1
 with respect to each specified drug of 
such manufacturer under section         
#ahfj;d-#aa7;i77#b71 to participate in  
the negotiation process under such      
section for such drug1 including        
accepting the price resulting from the  
negotiation 7or1 in the case that such  
negotiation does not result in a price  
for such drug that is agreed to by the  
,secretary and the manufacturer1 the    

price resulting from the application of 
subparagraph 7,b77ii7 of such section7  
as the maximum price for such drug for  
the period provided under such section4 
4  #c4 ,study and report  7a7 ,study    
,the ,secretary of ,health and ,human   
,services shall conduct a study         
examining-- 7#a7 the impact of the      
amendments made by section #b on--  7,a7
 the cost of single source drugs and    
biologicals 7as defined in section      
#ahdg;,a7c77#f77;,d7 of the ,social     
,security ,act 7#db ,u4,s4,c4           
#aciew-#c;a7c77#f77;,d777 for which     
payment is made under part ,b of title  
,,xviii of such ,act2 and  7,b7 the     
accessibility of such drugs and         
biologicals for individuals entitled to 
benefits under part ,a of such title or 
enrolled under part ,b of such title2   
and  7#b7 options that would permit or  
require the ,secretary to create and    
implement1 not later than one year after
 the date of the report described in    
subsection 7b7--  7,a7 a method to apply

 to such single source drugs and        
biologicals for which the ,secretary    
determines appropriate--  7i7 an        
authority similar to the authority      
granted to the ,secretary under         
subparagraph 7,a7 of section            
#ahfj;,d-#aa7;i77#b7 of such ,act       
7relating to negotiating with drug      
manufacturers the part ,d prices for    
certain specified drugs72 and  7ii7 a   
negotiation process similar to the      
process under subparagraph 7,b7 of such 
section2 and  7,b7 a method1 such as a  
rebate program1 to incorporate the rate 
negotiated for such drugs and           
biologicals pursuant to the authority   
described in subparagraph 7,a7 into     
payments for such drugs and biologicals 
under part ,b of such ,act4  7b7 ,report
 ,not later than one year after the date
 of the enactment of this ,act1 the     
,secretary of ,health and ,human        
,services shall submit a report to      
,congress on the results of the study   
conducted under subsection 7a74 ,such   

report shall include recommendations    
regarding the options examined pursuant 
to paragraph 7#b7 of such subsection4