,,ii #aaeth ,,congress #ast ,session ,s4 #cdh ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #i1 #bjag ,mr4 ,franken 7for himself1 ,mr4 ,reed1 and ,mr4 ,brown7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend title ,,xviii of the ,social ,security ,act to require the ,secretary of ,health and ,human ,services to negotiate lower covered part ,d drug prices on behalf of ,medicare beneficiaries4 #a4 ,short title ,this ,act may be cited as the ,prescription ,drug and ,health ,improvement ,act of #bjag4 #b4 ,negotiating fair prices for ,medicare prescription drugs 7a7 ,negotiating fair prices 7#a7 ,in general ,section #ahfj;,d-#aa of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7 is amended by striking subsection 7i7 7relating to noninterference7 and by inserting the following3 7i7 ,negotiating fair prices with drug manufacturers 7#a7 ,in general ,notwithstanding any other provision of law1 in furtherance of the goals of providing quality care and containing costs under this part1 the ,secretary shall1 with respect to applicable covered part ,d drugs1 and may1 with respect to other covered part ,d drugs1 negotiate1 using the negotiation technique that the ,secretary determines will maximize savings and value for a covered part ,d drug and plan enrollees 7in a manner that may be similar to ,federal entities and that may include1 but is not limited to1 formularies1 reference pricing1 discounts1 rebates1 and other price concessions71 with drug manufacturers the prices that may be charged to ,,pdp sponsors and ,,ma organizations for such drugs for part ,d eligible individuals who are enrolled in a prescription drug plan or in an ,,ma-,,pd plan4 ,in conducting such negotiations1 the ,secretary shall consider the drug's current price1 initial launch price1 prevalence and usage1 and approved indications1 the number of similarly effective alternative treatments for each approved use of the drug1 the budgetary impact of providing coverage under this part for such drug for all individuals who would likely benefit from the drug1 and evidence on the drug's effectiveness compared to similar drugs4 7#b7 ,use of lower of ,,va or big four price if negotiations fail ,if1 after attempting to negotiate for a price with respect to a covered part ,d drug under paragraph 7#a7 for a period of #a year1 the ,secretary is not successful in obtaining an appropriate price for the drug 7as determined by the ,secretary71 the ,secretary shall establish the price that may be charged to ,,pdp sponsors and ,,ma organizations for such drug for part ,d eligible individuals who are enrolled in a prescription drug plan or in an ,,ma-,,pd plan at an amount equal to the lesser of-- 7,a7 the price paid by the ,secretary of ,veterans ,affairs to procure the drug under the laws administered by the ,secretary of ,veterans ,affairs2 or 7,b7 the price paid to procure the drug under section #habf of title #ch1 ,united ,states ,code4 7#c7 ,applicable covered part ,d drug defined ,for purposes of this subsection1 the term applicable covered part ,d drug means a covered part ,d drug that the ,secretary determines to be appropriate for negotiation under paragraph 7#a7 based on one or more of the following factors as applied to such drug3 7,a7 ,spending on a per beneficiary basis4 7,b7 ,spending under this title4 7,c7 ,unit price increases over the preceding years4 7,d7 ,initial launch price4 7,e7 ,availability of similarly effective alternative treatments4 7,f7 ,status of the drug as a follow-on to previously approved drugs4 7,g7 ,any other criteria determined by the ,secretary4 7#d7 ,,pdp sponsors and ,,ma organization may negotiate lower prices ,nothing in this subsection shall be construed as 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 below the price negotiated under paragraph 7#a7 or the price established under paragraph 7#b74 7#e7 ,no affect on existing appeals process ,nothing in this subsection shall be construed to affect the appeals procedures under subsections 7g7 and 7h7 of section #ahfj;,d-#d4 4 7#b7 ,effective date ,the amendments made by this subsection shall take effect on the date of the enactment of this ,act and shall first apply to negotiations and prices for plan years beginning on ,january #a1 #bjai4 7b7 ,reports to ,congress 7#a7 ,secretary of ,,hhs 7,a7 ,in general ,not later than #c years after the date of the enactment of this ,act1 and every #f months thereafter1 the ,secretary of ,health and ,human ,services shall submit to ,congress a report on the following3 7i7 ,the negotiations conducted by the ,secretary under section #ahfj;,d-#aa7;i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7;i771 as amended by subsection 7a71 including a description of how such negotiations are achieving lower prices for covered part ,d drugs 7as defined in section #ahfj;,d-#b7;e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;e777 for ,medicare beneficiaries4 7ii7 ,data on spending under part ,d of the ,medicare program on covered part ,d drugs1 including data on covered part ,d drugs with-- 7,i7 spending on a per beneficiary basis that is above the median spending on other drugs in the same class or above the median spending of other drug classes2 and 7,,ii7 high unit cost increases over the past five years1 especially where such increases are greater than the increases for covered part ,d drugs in general4 7iii7 ,a list of the covered part ,d drugs with no therapeutic substitute and data on spending under part ,d of the ,medicare program on such drugs4 7iv7 ,access to covered part ,d drugs4 7v7 ,appeals by enrollees with respect to covered part ,d drugs not included on plan formularies4 7,b7 ,public availability of report ,the ,secretary of ,health and ,human ,services shall publish on the ,internet website of the ,centers for ,medicare ,medicaid ,services a copy of each report submitted under subparagraph 7,a74 7#b7 ,med,p,a,c 7,a7 ,study ,the ,comptroller ,general of the ,united ,states shall conduct a study on the negotiations conducted by the ,secretary under section #ahfj;,d-#aa7;i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#aaa7;i771 as amended by subsection 7a71 including a description of how such negotiations are achieving lower prices for covered part ,d drugs 7as defined in section #ahfj;,d-#b7;e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#ajb7;e777 for ,medicare beneficiaries4 7,b7 ,report ,not later than ,january #a1 #bjbb1 the ,comptroller ,general of the ,united ,states shall submit to ,congress a report on the study conducted under subparagraph 7,a71 together with recommendations for improving such negotiations4 7c7 ,,cmi testing of negotiating drug and biological prices ,to improve value ,section #aaae;,a7b77#b7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acae;a7b77#b77 is amended-- 7#a7 in subparagraph 7,a71 by adding at the end the following new sentence3 ,the models selected under this subparagraph shall include at least #c of the models described in subparagraph 7,d71 which shall be implemented by not later than #ah months after the date of the enactment of the ,prescription ,drug and ,health ,improvement ,act of #bjag2 and 7#b7 by adding at the end the following new subparagraph3 7,d7 ,models of negotiating drug and biological prices to improve value ,the models described in this subparagraph are the following models for negotiating drug and biological prices under the applicable titles 7including under both parts ,b and ,d of title ,,xviii7 in order to improve the value of payments for such drugs and biologicals under such titles3 7i7 ,discounting or eliminating patient cost-sharing on high-value drugs and biologicals4 7ii7 ,value-based formularies4 7iii7 ,indications-based pricing4 7iv7 ,reference pricing4 7v7 ,risk-sharing agreements based on outcomes4 7vi7 ,pricing based on comparative effectiveness research4 7vii7 ,episode-based payments for chemotherapy and other conditions determined appropriate by the ,secretary4 4