Medicare Prescription Drug Savings and Choice Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4769 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 HOUSE OF REPRESENTATIVES OCTOBER 21, 2019 Ms. SCHAKOWSKY introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, 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 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 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 4769 IH SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRE- 1 SCRIPTION DRUG PLAN OPTION. 2 (a) IN GENERAL.—Subpart 2 of part D of title XVIII 3 of the Social Security Act is amended by inserting after 4 section 1860D–11 (42 U.S.C. 1395w–111) the following 5 new section: 6 ‘‘MEDICARE OPERATED PRESCRIPTION DRUG PLAN 7 OPTION 8 ‘‘SEC. 1860D–11A. (a) IN GENERAL.—Notwith- 9 standing any other provision of this part, for each year 10 (beginning with 2021), in addition to any plans offered 11 under section 1860D–11, the Secretary shall offer one or 12 more Medicare operated prescription drug plans (as de- 13 fined in subsection (d)) with a service area that consists 14 of the entire United States and shall enter into negotia- 15 tions in accordance with subsection (c) with pharma- 16 ceutical manufacturers to reduce the purchase cost of cov- 17 ered part D drugs for eligible part D individuals who en- 18 roll in such a plan. 19 ‘‘(b) ENROLLMENT.—Notwithstanding subpara- 20 graphs (C) and (D) of section 1860D–1(b)(1), a Medicare 21 operated prescription drug plan offered under this section 22 shall serve as the default prescription drug plan for all 23 part D enrollees unless another prescription drug plan is 24 selected. 25 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 4769 IH ‘‘(c) NEGOTIATIONS.—Notwithstanding section 1 1860D–11(i), for purposes of offering a Medicare operated 2 prescription drug plan under this section, the Secretary 3 shall negotiate with pharmaceutical manufacturers with 4 respect to the purchase price of covered part D drugs in 5 a Medicare operated prescription drug plan and shall en- 6 courage the use of more affordable therapeutic equivalents 7 to the extent such practices do not override medical neces- 8 sity as determined by the prescribing physician. To the 9 extent practicable and consistent with the previous sen- 10 tence, the Secretary shall implement negotiation and in- 11 centive strategies similar to those used by other Federal 12 purchasers of prescription drugs to reduce the purchase 13 cost of covered Part D drugs, and other strategies, as de- 14 scribed in subsection (f), which may include the use of a 15 pricing scale based on an international price index. 16 ‘‘(d) MEDICARE OPERATED PRESCRIPTION DRUG 17 PLAN DEFINED.—For purposes of this part, the term 18 ‘Medicare operated prescription drug plan’ means a com- 19 prehensive prescription drug plan that offers qualified pre- 20 scription drug coverage and access to negotiated prices de- 21 scribed in section 1860D–2(a)(1)(A). Such a plan may 22 offer supplemental prescription drug coverage in the same 23 manner as other qualified prescription drug coverage of- 24 fered by other prescription drug plans. 25 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 4769 IH ‘‘(e) MONTHLY BENEFICIARY PREMIUM.— 1 ‘‘(1) QUALIFIED PRESCRIPTION DRUG COV- 2 ERAGE.—The monthly beneficiary premium for 3 qualified prescription drug coverage and access to 4 negotiated prices described in section 1860D– 5 2(a)(1)(A) to be charged under a Medicare operated 6 prescription drug plan shall be uniform nationally. 7 Such premium for months in 2021 and each suc- 8 ceeding year shall be based on the average monthly 9 per capita actuarial cost of offering the Medicare op- 10 erated prescription drug plan for the year involved, 11 including administrative expenses. 12 ‘‘(2) SUPPLEMENTAL PRESCRIPTION DRUG COV- 13 ERAGE.—Insofar as a Medicare operated prescrip- 14 tion drug plan offers supplemental prescription drug 15 coverage, the Secretary may adjust the amount of 16 the premium charged under paragraph (1). 17 ‘‘(f) USE OF NEGOTIATION AND BENEFIT DESIGN 18 INCENTIVES.— 19 ‘‘(1) IN GENERAL.—With respect to the oper- 20 ation of a Medicare operated prescription drug plan 21 and in negotiating with respect to the purchase price 22 of covered part D drugs in such plan, the Secretary 23 shall reward value, increase appropriate use of 24 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 4769 IH drugs, and ensure patient safety and access to medi- 1 cations. 2 ‘‘(2) ROLE OF AHRQ.—The Director of the 3 Agency for Healthcare Research and Quality, in co- 4 ordination with the Administrator of the Centers for 5 Medicare & Medicaid Services, shall be responsible 6 for assessing the clinical benefit of covered part D 7 drugs and making recommendations to the Secretary 8 regarding the negotiated prices of covered drugs and 9 any appropriate tiering or incentive strategies under 10 the plan. In conducting such assessments and mak- 11 ing such recommendations, the Director shall carry 12 out the following activities: 13 ‘‘(A) Consider the comparable inter- 14 national price of such drugs based upon the me- 15 dian retail list price of such drug (which shall 16 be, as practicable, the volume-weighted price for 17 comparable units and dosage forms) among a 18 category of at least the following peer reference 19 countries: Canada, the United Kingdom, 20 France, Japan, Australia, and Germany. 21 ‘‘(B) Consider safety concerns and post- 22 market data, including those identified by the 23 Food and Drug Administration and from na- 24 tional health registries. 25 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 4769 IH ‘‘(C) Use available data and evaluations, 1 including from research supported by the Na- 2 tional Institutes of Health, with priority given 3 to randomized controlled trials, to examine clin- 4 ical effectiveness, comparative effectiveness, 5 safety, and enhanced compliance with a drug 6 regimen. 7 ‘‘(D) Use the same classes of drugs devel- 8 oped by United States Pharmacopeia for this 9 part. 10 ‘‘(E) Consider evaluations made by— 11 ‘‘(i) the Director under section 1013 12 of the Medicare Prescription Drug, Im- 13 provement, and Modernization Act of 14 2003; 15 ‘‘(ii) other Federal entities, such as 16 the Secretary of Veterans Affairs; and 17 ‘‘(iii) other private and public entities, 18 which may include the Drug Effectiveness 19 Review Project and Medicaid programs. 20 ‘‘(F) Consider recommendations made by 21 the advisory committee pursuant to paragraph 22 (3)(F). 23 ‘‘(G) Recommend to the Secretary those 24 drugs in a class that provide a greater clinical 25 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 4769 IH benefit, including fewer safety concerns or less 1 risk of side-effects, than another drug in the 2 same class. 3 ‘‘(3) USE OF ADVISORY COMMITTEE.— 4 ‘‘(A) IN GENERAL.—The Secretary shall 5 establish and appoint an advisory committee (in 6 this paragraph referred to as the ‘advisory com- 7 mittee’)— 8 ‘‘(i) to review petitions from drug 9 manufacturers, health care provider orga- 10 nizations, patient groups, and other enti- 11 ties regarding negotiated prices; and 12 ‘‘(ii) to recommend any changes in 13 order to further negotiations with respect 14 to such prices. 15 ‘‘(B) COMPOSITION.—Subject to subpara- 16 graph (C), the advisory committee shall be com- 17 posed of 9 members and shall include represent- 18 atives of physicians, pharmacists, consumers, 19 and others with expertise in evaluating prescrip- 20 tion drugs. The Secretary shall select members 21 based on their knowledge of pharmaceuticals 22 and the Medicare population. Members shall be 23 deemed to be special Government employees for 24 purposes of applying the conflict of interest pro- 25 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 4769 IH visions under section 208 of title 18, United 1 States Code, and no waiver of such provisions 2 for such a member shall be permitted. 3 ‘‘(C) BANNED INDIVIDUALS.— 4 ‘‘(i) DRUG COMPANY LOBBYISTS.—No 5 former registered drug manufacturer lob- 6 byist— 7 ‘‘(I) may be appointed to the ad- 8 visory committee; or 9 ‘‘(II) may be employed by the ad- 10 visory committee during the 6-year 11 period beginning on the date on which 12 the registered lobbyist terminates its 13 registration in accordance with section 14 4(d) of the Lobbying Disclosure Act 15 of 1995 (2 U.S.C. 1603(d)) or the 16 agent terminates its status, as appli- 17 cable. 18 ‘‘(ii) SENIOR EXECUTIVES OF LAW- 19 BREAKING COMPANIES.—No former senior 20 executive of a covered entity (as defined in 21 clause (iii))— 22 ‘‘(I) may be appointed to the Ad- 23 visory Committee; or 24 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 4769 IH ‘‘(II) may be employed by the 1 Advisory Committee during the 6-year 2 period beginning on the later of— 3 ‘‘(aa) the date of the settle- 4 ment described in item (aa) of 5 clause (iii)(II); or 6 ‘‘(bb) the date on which the 7 enforcement action described in 8 item (bb) of such clause has con- 9 cluded. 10 ‘‘(iii) COVERED ENTITY.—The term 11 ‘covered entity’ means any entity that is— 12 ‘‘(I) a drug manufacturer; and 13 ‘‘(II)(aa) operating under Fed- 14 eral settlement including a Federal 15 consent decree; or 16 ‘‘(bb) the subject of an enforce- 17 ment action in a court of the United 18 States or by an agency. 19 ‘‘(D) CONSULTATION.—The advisory com- 20 mittee shall consult, as necessary, with physi- 21 cians who are specialists in treating the disease 22 for which a drug is being considered. 23 ‘‘(E) REQUEST FOR STUDIES.—The advi- 24 sory committee may request the Agency for 25 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 4769 IH Healthcare Research and Quality or an aca- 1 demic or research institution to study and make 2 a report on a petition described in subpara- 3 graph (A)(i) in order to assess cost-effective- 4 ness, clinical effectiveness, comparative effec- 5 tiveness, safety, and compliance with a drug 6 regimen. 7 ‘‘(F) RECOMMENDATIONS.—The advisory 8 committee shall make recommendations to the 9 Director of the Agency for Healthcare Research 10 and Quality regarding the appropriate price at 11 which to begin negotiations on a part D drug 12 pursuant to this section. 13 ‘‘(G) LIMITATIONS ON REVIEW OF MANU- 14 FACTURER PETITIONS.—The advisory com- 15 mittee shall not review a petition of a drug 16 manufacturer under subparagraph (A)(i) with 17 respect to a covered part D drug unless the pe- 18 tition is accompanied by the following: 19 ‘‘(i) Raw data from clinical trials on 20 the safety and effectiveness of the drug. 21 ‘‘(ii) Any data from clinical trials con- 22 ducted using active controls on the drug or 23 drugs that are the current standard of 24 care. 25 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 4769 IH ‘‘(iii) Any available data on compara- 1 tive effectiveness of the drug. 2 ‘‘(iv) Any other information the Sec- 3 retary requires for the advisory committee 4 to complete its review. 5 ‘‘(g) INFORMING BENEFICIARIES.—The Secretary 6 shall take steps to inform part D eligible individuals not 7 previously enrolled in a Medicare operated drug plan (in- 8 cluding such individuals who are newly eligible to enroll 9 under this part) regarding the enrollment of such indi- 10 vidual in a Medicare operated drug plan in accordance 11 with this section, including providing information in the 12 annual handbook and adding information to the official 13 public Medicare website related to prescription drug cov- 14 erage available through this part. 15 ‘‘(h) APPLICATION OF ALL OTHER REQUIREMENTS 16 FOR PRESCRIPTION DRUG PLANS.—Except as specifically 17 provided in this section, any Medicare operated drug plan 18 shall meet the same requirements as apply to any other 19 prescription drug plan, including the requirements of sec- 20 tion 1860D–4(b)(1) relating to assuring pharmacy ac- 21 cess.’’. 22 (b) CONFORMING AMENDMENTS.— 23 VerDate Sep 11 2014 18:56 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4769.IH H4769 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 4769 IH (1) Section 1860D–3(a) of the Social Security 1 Act (42 U.S.C. 1395w–103(a)) is amended by add- 2 ing at the end the following new paragraph: 3 ‘‘(4) AVAILABILITY OF THE MEDICARE OPER- 4 ATED PRESCRIPTION DRUG PLAN.—A Medicare op- 5 erated prescription drug plan (as defined in section 6 1860D–11A(d)) shall be offered nationally in ac- 7 cordance with section 1860D–11A.’’. 8 (2)(A) Section 1860D–3 of the Social Security 9 Act (42 U.S.C. 1395w–103) is amended by adding 10 at the end the following new subsection: 11 ‘‘(c) PROVISIONS ONLY APPLICABLE IN 2006 12 THROUGH 2020.—The provisions of this section shall only 13 apply with respect to 2006 through 2020.’’. 14 (B) Section 1860D–11(g) of such Act (42 15 U.S.C. 1395w–111(g)) is amended by adding at the 16 end the following new paragraph: 17 ‘‘(8) NO AUTHORITY FOR FALLBACK PLANS 18 AFTER 2020.—A fallback prescription drug plan shall 19 not be available after December 31, 2020.’’. 20 (3) Section 1860D–13(c)(3) of the Social Secu [Text truncated for display. 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