Text: H.R.2890 — 102nd Congress (1991-1992)All Information (Except Text)

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Union Calendar No. 510
102d CONGRESS
2d Session
H. R. 2890
[Report No. 102-384, Parts I and II]
A BILL
To establish limits on the prices of drugs procured by the Department of
Veterans Affairs, and for other purposes.
September 22, 1992
Reported by the Committee on Energy and Commerce with amendments, committed
to the Committee of the Whole House on the State of the Union, and ordered
to be printed
HR 2890 RH
Union Calendar No. 510
102d CONGRESS
2d Session
 H. R. 2890
[Report No. 102-384, Parts I and II]
To establish limits on the prices of drugs procured by the Department of
Veterans Affairs, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
July 15, 1991
Mr. MONTGOMERY (for himself, Mr. STUMP, and Mr. HAMMERSCHMIDT) introduced
the following bill; which was referred jointly to the Committees on Veterans'
Affairs and Energy and Commerce
November 25, 1991
Reported from the Committee on Veterans' Affairs
September 22, 1992
Additional sponsors: Mr. SLATTERY, Mr. BROWN, Mr. STAGGERS, Mr. MRAZEK,
Mr. ANNUNZIO, Mr. MYERS of Indiana, Mr. OLIN, Mr. TAYLOR of Mississippi,
Ms. SLAUGHTER, Mr. PICKETT, Mr. BILBRAY, Mr. APPLEGATE, Mr. KOLTER,
Mr. BOEHLERT, Mr. LAGOMARSINO, Mr. LEWIS of California, Mr. RAVENEL,
Mr. IRELAND, Mrs. PATTERSON, Mr. PAYNE of Virginia, Mr. LEWIS of Florida,
Mr. HOCHBRUECKNER, Mr. MCCANDLESS, Mr. BROOMFIELD, Mr. FALEOMAVAEGA,
Mr. KOLBE, Mr. TORRES, Mr. JONTZ, Mr. RANGEL, Mr. TOWNS, Mr. SCHIFF,
Mr. SMITH of Iowa, Mrs. LLOYD, Mr. BUSTAMANTE, Mr. FASCELL, Mr. MAZZOLI,
Mr. PERKINS, Mr. PETERSON of Minnesota, Mr. GAYDOS, Mr. JONES of North
Carolina, Mr. KYL, Mr. DE LA GARZA, Mr. TRAFICANT, Mr. EVANS, Mr. PACKARD,
Mr. SANTORUM, Mr. DE LUGO, Mrs. BYRON, Mr. ABERCROMBIE, Mr. JOHNSON of
South Dakota, Mr. SHAW, Mr. GONZALEZ, Mr. PETERSON of Florida, Mr. KLECZKA,
Mr. MACHTLEY, Mr. CONDIT, Mr. HUCKABY, Ms. KAPTUR, Mr. JOHNSTON of Florida,
Mrs. VUCANOVICH, Mr. ALEXANDER, Mr. GINGRICH, Mrs. SCHROEDER, Mr. WYLIE,
Mr. SPENCE, Mr. JENKINS, Mr. HEFNER, Mr. RICHARDSON, Mr. STENHOLM, Mr. PARKER,
Mr. HARRIS, Mr. CHAPMAN, Mr. HAYES of Louisiana, Mr. FISH, Mr. LENT, Mr. CAMP,
Mr. ROGERS, Mr. BLAZ, Mr. ENGEL, Mrs. MINK, Mr. EMERSON, Mrs. MORELLA,
Mr. ATKINS, Mr. STUDDS, Mr. STARK, Mr. OBERSTAR, Ms. SNOWE, Mr. DORNAN of
California, Mr. HOYER, Mr. RAHALL, Mr. FEIGHAN, Mr. NEAL of Massachusetts,
Mr. ROSE, Mr. NAGLE, Mr. DICKINSON, Mr. SIKORSKI, Mr. MAVROULES, Mr. SKEEN,
Mr. KILDEE, Mr. FAZIO, Mr. REED, Mr. HALL of Texas, and Mr. Cramer
September 22, 1992
Reported by the Committee on Energy and Commerce with amendments, committed
to the Committe of the Whole House on the State of the Union, and ordered
to be printed
[Strike out after the enacting clause and insert the part printed in italic]
A BILL
To establish limits on the prices of drugs procured by the Department of
Veterans Affairs, and for other purposes.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
 [Struck out->] SECTION 1. LIMITATION ON PRICES OF DRUGS PROCURED BY DEPARTMENT
 OF VETERANS AFFAIRS. []   (a) REQUIREMENT FOR PARTICIPATION IN PROGRAMS OF DEPARTMENT
 OF VETERANS AFFAIRS- The Secretary of Veterans Affairs may not make any
 payment for covered drugs and biologicals to a manufacturer unless the price
 charged by the manufacturer to the Department of Veterans Affairs for the
 drugs and biologicals is determined in accordance with an agreement entered
 into between the Secretary and the manufacturer that meets the requirements
 of section 1927(a)(5) of the Social Security Act (as added by subsection
 (b)(2)). []   (b) REQUIREMENT FOR PARTICIPATION IN MEDICAID-  []   (1) IN GENERAL- The first sentence of section 1927(a)(1)
 of the Social Security Act (42 U.S.C. 1396s(a)(1)), as inserted by section
 4401(a)(3) of the Omnibus Budget Reconciliation Act of 1990 (hereafter
 referred to as `OBRA-1990'), is amended by striking `manufacturer).' and
 inserting `manufacturer) and an agreement described in paragraph (5) (with
 respect to drugs dispensed on or after the date of the enactment of that
 paragraph).'. []   (2) AGREEMENTS DESCRIBED- Section 1927(a) of the Social
 Security Act (42 U.S.C. 1396s(a)), as inserted by section 4401(a)(3) of
 OBRA-1990, is amended by adding at the end the following new paragraph:
 []   `(5) LIMITATION ON PRICES OF DRUGS PROCURED BY DEPARTMENT
 OF VETERANS AFFAIRS-  []   `(A) AGREEMENTS WITH SECRETARY- An agreement under this
 paragraph is an agreement-- []   `(i) between the Secretary of Veterans Affairs and a
 manufacturer of covered outpatient drugs that provides that, with respect to a
 drug described in subparagraph (B) procured in a calendar quarter, the price
 for the drug charged to the Department of Veterans Affairs may not exceed
 the applicable price for the drug charged to the entity as of September 1,
 1990, increased (in a compounded manner) by the sum of the covered drug
 updates (as defined in subparagraph (C)) for calendar quarters beginning
 on or after April 1, 1991, up to and including the calendar quarter during
 which the drug is procured; or []   `(ii) between the Secretary of Veterans Affairs and a
 manufacturer of covered outpatient drugs that provides for another methodology
 for determining the prices charged to the entity by the manufacturer for
 drugs described in subparagraph (B). []   `(B) DRUGS COVERED UNDER AGREEMENTS- Subparagraph (A)
 shall apply to any drug or biological product procured by the Department
 of Veterans Affairs-- []   `(i) that is purchased under a depot contracting system;
 or []   `(ii) that is listed under the Federal Supply Schedule of the
 General Services Administration on or after January 1, 1990. []   `(C) COVERED DRUG UPDATE- For purposes of subparagraph
 (A)(i), a `covered drug update' is equal to, with respect to a calendar
 quarter, 25 percent of the percentage increase provided for calculating
 the cost of inflation in the medical care account of the Department of
 Veterans Affairs contained in the budget request submitted by the Secretary
 of Veterans Affairs for the fiscal year in which the calendar quarter
 occurs. []   `(D) EFFECTIVE DATE- Subparagraph (A) shall apply to drugs
 and biological products procured by the Department of Veterans Affairs on
 or after the date of the enactment of this paragraph.'. [] SEC. 2. EXCLUSION OF PRICES FOR PRESCRIPTION DRUGS PROCURED
 BY FEDERAL GOVERNMENT FROM CALCULATION OF BEST PRICES FOR MEDICAID REBATE
 AGREEMENTS. []   (a) IN GENERAL- Section 1927(c)(1)(C) of the Social
 Security Act (42 U.S.C. 1396s(c)(1)(C)), as inserted by section 4401(a)(3)
 of OBRA-1990,  is amended-- []   (1) by striking `governmental entity' and inserting
 `governmental entity (other than an entity of the Federal Government)';
 and []   (2) by striking `(excluding' and all that follows through
 `Federal Government)'. []   (b) EFFECTIVE DATE- The amendments made by subsection (a)
 shall apply to drugs procured for quarters beginning on or after October 1,
 1991. [] SEC. 3. STUDY OF EFFECTS OF CHANGES IN PRICING POLICIES FOR
 DRUGS PROCURED BY DEPARTMENT OF VETERANS AFFAIRS. []   (a) STUDY- The Secretary of Veterans Affairs shall
 conduct a study of the effects on the costs and availability of drugs and
 biological products for programs of the Department of Veterans Affairs of--
 []   (1) the exemption of prices for drugs procured by the Federal
 Government from the prices used to determine the best price for covered drugs
 for purposes of covered outpatient drug rebate agreements under the medicaid
 program (as provided under section 2(a) of this Act); and []   (2) the limitation on prices for covered drugs provided
 to the Department of Veterans Affairs (as provided under section 1 of this
 Act). []   (b) REPORT- Not later than 1 year after the date of the
 enactment of this Act, the Secretary of Veterans Affairs shall submit
 a report on the study conducted under subsection (a) to the Committees
 on Veterans' Affairs of the Senate and the House of Representatives,
 together with a report on the status of contract negotiations between
 the Secretary and manufacturers of covered drugs and biological products,
 including a description of any negotiations that are not resolved at the
 time the Secretary submits the report. [