II 116TH CONGRESS 1ST SESSION S. 2650 To amend part D of title XVIII of the Social Security Act to deliver a meaningful benefit and lower prescription drug prices under the Medicare program. IN THE SENATE OF THE UNITED STATES OCTOBER 21, 2019 Mr. DURBIN (for himself and Mr. BROWN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend part D of title XVIII of the Social Security Act to deliver a meaningful benefit and lower prescription drug prices under the Medicare program. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Medicare Prescription 4 Drug Savings and Choice Act of 2019’’. 5 SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRE- 6 SCRIPTION DRUG PLAN OPTION. 7 (a) IN GENERAL.—Subpart 2 of part D of title XVIII 8 of the Social Security Act is amended by inserting after 9 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 2 •S 2650 IS section 1860D–11 (42 U.S.C. 1395w–111) the following 1 new section: 2 ‘‘MEDICARE OPERATED PRESCRIPTION DRUG PLAN 3 OPTION 4 ‘‘SEC. 1860D–11A. (a) IN GENERAL.—Notwith- 5 standing any other provision of this part, for each year 6 (beginning with 2021), in addition to any plans offered 7 under section 1860D–11, the Secretary shall offer one or 8 more Medicare operated prescription drug plans (as de- 9 fined in subsection (d)) with a service area that consists 10 of the entire United States and shall enter into negotia- 11 tions in accordance with subsection (c) with pharma- 12 ceutical manufacturers to reduce the purchase cost of cov- 13 ered part D drugs for eligible part D individuals who en- 14 roll in such a plan. 15 ‘‘(b) ENROLLMENT.—Notwithstanding subpara- 16 graphs (C) and (D) of section 1860D–1(b)(1), a Medicare 17 operated prescription drug plan offered under this section 18 shall serve as the default prescription drug plan for all 19 part D enrollees unless another prescription drug plan is 20 selected. 21 ‘‘(c) NEGOTIATIONS.—Notwithstanding section 22 1860D–11(i), for purposes of offering a Medicare operated 23 prescription drug plan under this section, the Secretary 24 shall negotiate with pharmaceutical manufacturers with 25 respect to the purchase price of covered part D drugs in 26 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 3 •S 2650 IS a Medicare operated prescription drug plan and shall en- 1 courage the use of more affordable therapeutic equivalents 2 to the extent such practices do not override medical neces- 3 sity as determined by the prescribing physician. To the 4 extent practicable and consistent with the previous sen- 5 tence, the Secretary shall implement negotiation and in- 6 centive strategies similar to those used by other Federal 7 purchasers of prescription drugs to reduce the purchase 8 cost of covered Part D drugs, and other strategies, as de- 9 scribed in subsection (f), which may include the use of a 10 pricing scale based on an international price index. 11 ‘‘(d) MEDICARE OPERATED PRESCRIPTION DRUG 12 PLAN DEFINED.—For purposes of this part, the term 13 ‘Medicare operated prescription drug plan’ means a com- 14 prehensive prescription drug plan that offers qualified pre- 15 scription drug coverage and access to negotiated prices de- 16 scribed in section 1860D–2(a)(1)(A). Such a plan may 17 offer supplemental prescription drug coverage in the same 18 manner as other qualified prescription drug coverage of- 19 fered by other prescription drug plans. 20 ‘‘(e) MONTHLY BENEFICIARY PREMIUM.— 21 ‘‘(1) QUALIFIED PRESCRIPTION DRUG COV- 22 ERAGE.—The monthly beneficiary premium for 23 qualified prescription drug coverage and access to 24 negotiated prices described in section 1860D– 25 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 4 •S 2650 IS 2(a)(1)(A) to be charged under a Medicare operated 1 prescription drug plan shall be uniform nationally. 2 Such premium for months in 2021 and each suc- 3 ceeding year shall be based on the average monthly 4 per capita actuarial cost of offering the Medicare op- 5 erated prescription drug plan for the year involved, 6 including administrative expenses. 7 ‘‘(2) SUPPLEMENTAL PRESCRIPTION DRUG COV- 8 ERAGE.—Insofar as a Medicare operated prescrip- 9 tion drug plan offers supplemental prescription drug 10 coverage, the Secretary may adjust the amount of 11 the premium charged under paragraph (1). 12 ‘‘(f) USE OF NEGOTIATION AND BENEFIT DESIGN 13 INCENTIVES.— 14 ‘‘(1) IN GENERAL.—With respect to the oper- 15 ation of a Medicare operated prescription drug plan 16 and in negotiating with respect to the purchase price 17 of covered part D drugs in such plan, the Secretary 18 shall reward value, increase appropriate use of 19 drugs, and ensure patient safety and access to medi- 20 cations. 21 ‘‘(2) ROLE OF AHRQ.—The Director of the 22 Agency for Healthcare Research and Quality, in co- 23 ordination with the Administrator of the Centers for 24 Medicare & Medicaid Services, shall be responsible 25 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 5 •S 2650 IS for assessing the clinical benefit of covered part D 1 drugs and making recommendations to the Secretary 2 regarding the negotiated prices of covered drugs and 3 any appropriate tiering or incentive strategies under 4 the plan. In conducting such assessments and mak- 5 ing such recommendations, the Director shall carry 6 out the following activities: 7 ‘‘(A) Consider the comparable inter- 8 national price of such drugs based upon the me- 9 dian retail list price of such drug (which shall 10 be, as practicable, the volume-weighted price for 11 comparable units and dosage forms) among a 12 category of at least the following peer reference 13 countries: Canada, the United Kingdom, 14 France, Japan, Australia, and Germany. 15 ‘‘(B) Consider safety concerns and post- 16 market data, including those identified by the 17 Food and Drug Administration and from na- 18 tional health registries. 19 ‘‘(C) Use available data and evaluations, 20 including from research supported by the Na- 21 tional Institutes of Health, with priority given 22 to randomized controlled trials, to examine clin- 23 ical effectiveness, comparative effectiveness, 24 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 6 •S 2650 IS safety, and enhanced compliance with a drug 1 regimen. 2 ‘‘(D) Use the same classes of drugs devel- 3 oped by United States Pharmacopeia for this 4 part. 5 ‘‘(E) Consider evaluations made by— 6 ‘‘(i) the Director under section 1013 7 of the Medicare Prescription Drug, Im- 8 provement, and Modernization Act of 9 2003; 10 ‘‘(ii) other Federal entities, such as 11 the Secretary of Veterans Affairs; and 12 ‘‘(iii) other private and public entities, 13 which may include the Drug Effectiveness 14 Review Project and Medicaid programs. 15 ‘‘(F) Consider recommendations made by 16 the advisory committee pursuant to paragraph 17 (3)(F). 18 ‘‘(G) Recommend to the Secretary those 19 drugs in a class that provide a greater clinical 20 benefit, including fewer safety concerns or less 21 risk of side effects, than another drug in the 22 same class. 23 ‘‘(3) USE OF ADVISORY COMMITTEE.— 24 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 7 •S 2650 IS ‘‘(A) IN GENERAL.—The Secretary shall 1 establish and appoint an advisory committee (in 2 this paragraph referred to as the ‘advisory com- 3 mittee’)— 4 ‘‘(i) to review petitions from drug 5 manufacturers, health care provider orga- 6 nizations, patient groups, and other enti- 7 ties regarding negotiated prices; and 8 ‘‘(ii) to recommend any changes in 9 order to further negotiations with respect 10 to such prices. 11 ‘‘(B) COMPOSITION.—Subject to subpara- 12 graph (C), the advisory committee shall be com- 13 posed of 9 members and shall include represent- 14 atives of physicians, pharmacists, consumers, 15 and others with expertise in evaluating prescrip- 16 tion drugs. The Secretary shall select members 17 based on their knowledge of pharmaceuticals 18 and the Medicare population. Members shall be 19 deemed to be special Government employees for 20 purposes of applying the conflict of interest pro- 21 visions under section 208 of title 18, United 22 States Code, and no waiver of such provisions 23 for such a member shall be permitted. 24 ‘‘(C) BANNED INDIVIDUALS.— 25 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 8 •S 2650 IS ‘‘(i) DRUG COMPANY LOBBYISTS.—No 1 former registered drug manufacturer lob- 2 byist— 3 ‘‘(I) may be appointed to the ad- 4 visory committee; or 5 ‘‘(II) may be employed by the ad- 6 visory committee during the 6-year 7 period beginning on the date on which 8 the registered lobbyist terminates its 9 registration in accordance with section 10 4(d) of the Lobbying Disclosure Act 11 of 1995 (2 U.S.C. 1603(d)) or the 12 agent terminates its status, as appli- 13 cable. 14 ‘‘(ii) SENIOR EXECUTIVES OF LAW- 15 BREAKING COMPANIES.—No former senior 16 executive of a covered entity (as defined in 17 clause (iii))— 18 ‘‘(I) may be appointed to the Ad- 19 visory Committee; or 20 ‘‘(II) may be employed by the 21 Advisory Committee during the 6-year 22 period beginning on the later of— 23 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 9 •S 2650 IS ‘‘(aa) the date of the settle- 1 ment described in item (aa) of 2 clause (iii)(II); or 3 ‘‘(bb) the date on which the 4 enforcement action described in 5 item (bb) of such clause has con- 6 cluded. 7 ‘‘(iii) COVERED ENTITY.—The term 8 ‘covered entity’ means any entity that is— 9 ‘‘(I) a drug manufacturer; and 10 ‘‘(II)(aa) operating under Fed- 11 eral settlement including a Federal 12 consent decree; or 13 ‘‘(bb) the subject of an enforce- 14 ment action in a court of the United 15 States or by an agency. 16 ‘‘(D) CONSULTATION.—The advisory com- 17 mittee shall consult, as necessary, with physi- 18 cians who are specialists in treating the disease 19 for which a drug is being considered. 20 ‘‘(E) REQUEST FOR STUDIES.—The advi- 21 sory committee may request the Agency for 22 Healthcare Research and Quality or an aca- 23 demic or research institution to study and make 24 a report on a petition described in subpara- 25 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 10 •S 2650 IS graph (A)(i) in order to assess cost effective- 1 ness, clinical effectiveness, comparative effec- 2 tiveness, safety, and compliance with a drug 3 regimen. 4 ‘‘(F) RECOMMENDATIONS.—The advisory 5 committee shall make recommendations to the 6 Director of the Agency for Healthcare Research 7 and Quality regarding the appropriate price at 8 which to begin negotiations on a part D drug 9 pursuant to this section. 10 ‘‘(G) LIMITATIONS ON REVIEW OF MANU- 11 FACTURER PETITIONS.—The advisory com- 12 mittee shall not review a petition of a drug 13 manufacturer under subparagraph (A)(i) with 14 respect to a covered part D drug unless the pe- 15 tition is accompanied by the following: 16 ‘‘(i) Raw data from clinical trials on 17 the safety and effectiveness of the drug. 18 ‘‘(ii) Any data from clinical trials con- 19 ducted using active controls on the drug or 20 drugs that are the current standard of 21 care. 22 ‘‘(iii) Any available data on compara- 23 tive effectiveness of the drug. 24 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 11 •S 2650 IS ‘‘(iv) Any other information the Sec- 1 retary requires for the advisory committee 2 to complete its review. 3 ‘‘(g) INFORMING BENEFICIARIES.—The Secretary 4 shall take steps to inform part D eligible individuals not 5 previously enrolled in a Medicare operated drug plan (in- 6 cluding such individuals who are newly eligible to enroll 7 under this part) regarding the enrollment of such indi- 8 vidual in a Medicare operated drug plan in accordance 9 with this section, including providing information in the 10 annual handbook and adding information to the official 11 public Medicare website related to prescription drug cov- 12 erage available through this part. 13 ‘‘(h) APPLICATION OF ALL OTHER REQUIREMENTS 14 FOR PRESCRIPTION DRUG PLANS.—Except as specifically 15 provided in this section, any Medicare operated drug plan 16 shall meet the same requirements as apply to any other 17 prescription drug plan, including the requirements of sec- 18 tion 1860D–4(b)(1) relating to assuring pharmacy ac- 19 cess.’’. 20 (b) CONFORMING AMENDMENTS.— 21 (1) Section 1860D–3(a) of the Social Security 22 Act (42 U.S.C. 1395w–103(a)) is amended by add- 23 ing at the end the following new paragraph: 24 VerDate Sep 11 2014 04:28 Oct 23, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2650.IS S2650 kjohnson on DSK79L0C42 with BILLS 12 •S 2650 IS ‘‘(4) AVAILABILITY OF THE MEDICARE OPER- 1 ATED PRESCRIPTION DRUG PLAN.—A Medicare op- 2 erated prescription drug plan (as defined in section 3 1860D–11A(d)) shall be offered nationally in ac- 4 cordance with section 1860D–11A.’’. 5 (2)(A) Section 1860D–3 of the Social Security 6 Act (42 U.S.C. 1395w–103) is amended by adding 7 at the end the following new subsection: 8 ‘‘(c) PROVISIONS ONLY APPLICABLE IN 2006 9 THROUGH 2020.—The provisions of this section shall only 10 apply with respect to 2006 through 2020.’’. 11 (B) Section 1860D–11(g) of such Act (42 12 U.S.C. 1395w–111(g)) is amended by adding at the 13 end the following new paragraph: 14 ‘‘(8) NO AUTHORITY FOR FALLBACK PLANS 15 AFTER 2020.—A fallback prescription drug plan shall 16 not be available after December 31, 2020.’’. 17 (3) Section 1860D–13(c)(3) of the Social Secu- 18 rity Act (42 U.S.C. 1395w–113(c)(3)) is amended— 19 (A) in the heading, by inserting ‘‘AND 20 MEDICARE OPERATED PRESCRIPTION DRUG 21 PLANS’’ after ‘‘FALLBACK PLANS’’; and 22 (B) by inserting ‘‘or a Medicare operated 23 prescription drug plan’’ [Text truncated for display. Full text available on Congress.gov.]