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                                                       Calendar No. 370
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-189

======================================================================



 
                   PHARMACY EDUCATION AID ACT OF 2003

                                _______
                                

                November 6, 2003.--Ordered to be printed

                                _______
                                

    Mr. Gregg, from the Committee on Health, Education, Labor, and 
                   Pensions, submitted the following

                              R E P O R T

                         [To accompany S. 648]

    The Committee on Health, Education, Labor, and Pensions, to 
which was referred the bill (S. 648) to amend the Public Health 
Service Act with respect to health professions programs 
regarding the practice of pharmacy and having considered the 
same, reports favorably thereon with an amendment in the nature 
of a substitute and recommends that the bill (as amended) do 
pass.

                                CONTENTS

                                                                   Page
  I. Purpose and need for legislation.................................1
 II. Summary of the bill..............................................2
III. History of legislation and votes in committee....................2
 IV. Explanation of bill and committee views..........................3
  V. Cost estimate....................................................3
 VI. Regulatory impact statement......................................6
VII. Application of law to the legislative branch.....................6
VIII.Section-by-section analysis......................................6

 IX. Changes in existing law..........................................7

                  I. Purpose and Need for Legislation

    Pharmacists are an important link in our Nation's health 
care system and a shortage of pharmacists threatens the ability 
of patients to pharmacies to provide important prescription 
related services.
    In the landmark report entitled ``To Err is Human: Building 
a Safer Health System'', the Institute of Medicine reported 
that medication errors can be partially attributed to factors 
that are indicative of a shortage of pharmacists (such as too 
many customers, numerous distractions, and staff shortages).
    Congress acknowledged in the Healthcare Research and 
Quality Act of 1999 (Public Law 106-129) the potential need for 
pharmacists by requiring the Security of Health and Human 
Services to conduct a study to determine whether there is a 
shortage of pharmacists in the United States, and, if so, to 
what extent.
    As a result, the Secretary of Health and Human Services 
published a report entitled ``The Pharmacist Workforce: A Study 
in Supply and Demand for Pharmacists'' in December 2000 which 
found, ``while the overall supply of pharmacists has increased 
in the past decade, there has been an unprecedented demand for 
pharmacists and for pharmaceutical care services, which has not 
been met by the currently available supply'' and that the 
``evidence clearly indicates the emergence of a shortage of 
pharmacists over the past 2 years.''
    The same study also found, ``the factors causing the 
current shortage are of a nature not likely to abate in the 
near future without fundamental changes in pharmacy practice 
and education.'' The study projects that the number of 
prescriptions filled by community pharmacists will increase by 
20 percent by 2004.
    Regarding access to pharmacy services in rural areas, the 
study found, ``remoteness, isolation from other professionals, 
lower economic returns, reduced opportunities for advancement 
and other rural practice characteristics remain obstacles'' to 
attracting pharmacists.

                        II. Summary of the Bill

    The Pharmacy Education Aid Act of 2003 authorizes two new 
student-loan repayment programs for pharmacists. The first 
would repay the student loans of pharmacists who agree to 
practice for at least 2 years in facilities that are facing 
critical shortages of pharmacists, as defined by the Secretary 
of Health and Human Services. The second would repay the loans 
of students who agree to serve for at least 2 years as faculty 
members at accredited schools of pharmacy.

           III. History of Legislation and Votes in Committee

    On December 11, 2001, Senator Reed, for himself and 
Senators Enzi, Johnson, Chafee, Graham of Florida, Collins, 
Landrieu, Hutchinson, Inouye, Cochran, and Wellstone, 
introduced S. 1806, the Pharmacy Education Aid Act of 2001. 
Senators Mikulski and Torricelli later joined as co-sponsors of 
the act.
    On September 30, 2002, the committee held an executive 
session to consider S. 1806. After agreeing to an amendment in 
the nature of a substitute, the committee approved S. 1806 by 
unanimous voice vote.
    On October 3, 2002, the Senate approved S. 1806 by 
unanimous voice vote. On October 7, 2002, the House received S. 
1806 and referred the act to the Committee on Energy and 
Commerce.
    There was no further action on S. 1806 in the 107th 
Congress.
    On March 18, 2003, Senator Reed, for himself and Senators 
Enzi, Johnson, Warner, Landrieu, Collins, Inouye, and Roberts, 
introduced S. 648, the Pharmacy Education Aid Act of 2003. 
Senators Cochran, Lautenberg, Mikulski, and Stabenow later 
joined as cosponsors of the act.
    On June 11, 2003, the committee held an executive session 
to consider S. 648. After agreeing to an amendment in the 
nature of a substitute offered by Senator Enzi for himself and 
Senator Reed, the committee approved S. 648 by unanimous voice 
vote.

                          A. AMENDMENT ADOPTED

    The Enzi-Reed substitute amendment approved by the 
committee requires schools of pharmacy conform to current law 
and match federal contributions on a dollar-for-dollar basis in 
the faculty loan repayment program. The substitute amendment 
also removed a provision establishing a new information 
technology grant program for schools of pharmacy.

              IV. Explanation of Bill and Committee Views

    The committee recognizes the important role that 
pharmacists play in the American health care system. In 
particular, the committee appreciates the role that pharmacists 
play in rural areas, where the pharmacist can be one of the few 
local health professionals with a permanent presence in the 
community.
    The demand for pharmacists will increase as prescription 
drug use continues to grow. To help meet this demand, the 
Pharmacy Education Aid Act of 2003 would establish programs 
that help reduce the financial barriers faced by pharmacists 
who would seek to practice in shortage areas or to serve as 
pharmacy school faculty, two of the great demonstrated needs in 
the pharmacist workforce.
    The committee would be concerned if schools of pharmacy 
were to use funds made available through this act for repaying 
the educational loans of a faculty member to replace funds that 
the school otherwise would have paid in salary or other 
benefits to such faculty member. The committee intends for the 
faculty loan repayment program to assist pharmacists who take 
faculty positions in repaying their educational loans, since 
faculty positions generally pay less than full-time practicing 
positions in most areas. To that end, the committee expects the 
Secretary to ensure that faculty loan repayments made by a 
school of pharmacy are in addition to the compensation that the 
individual would normally receive for serving as a member of 
the faculty.
    The committee expects that the Secretary will develop 
regulations to implement this act, in particular the definition 
of a ``facility with a critical shortage of pharmacists'', in 
consultation with organizations representing residents of 
medically underserved areas, facilities and pharmacists that 
serve such residents, and schools of pharmacy.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 31, 2003.
Hon. Judd Gregg,
Chairman, Committee on Health, Education, Labor, and Pensions, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 648, the Pharmacy 
Education Aid Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Alexis 
Ahlstrom.
            Sincerely,
                                         Robert A. Sunshine
                               (for Douglas Holtz-Eakin, Director).
    Enclosure.

S. 648--Pharmacy Education Aid Act of 2003

    Summary: S. 648 would establish two pharmacy education 
programs within the Health Services and Research Administration 
(HRSA). The bill would authorize the agency to pay principal 
and interest on education loans owed by pharmacists possessing 
bachelor or doctorate degrees who agree to work for at least 
two years in an area where there is a shortage of pharmacists. 
S. 648 also would provide for loan repayments for students and 
graduates who became members of the faculty of a pharmacy 
school for a minimum of two years. In each case, payments for 
an individual could not exceed $35,000 per year of service. The 
bill would authorize the appropriation of such sums as 
necessary for these activities from 2004 through 2008.
    Assuming appropriation of the necessary amounts, CBO 
estimates that implementing S. 648 would cost $2 million in 
2004 and $51 million over the 2004-2008 period.
    By authorizing assistance to certain pharmacists, S. 648 
would effectively extend provisions of section 224 of the 
Public Health Service act to those pharmacists who choose to 
work in health centers that receive funding under section 330 
of that act. That section authorizes settlements and awards for 
tort claims to be paid out of the Treasury's Judgment Fund. 
Those payments are considered direct spending, regardless of 
whether the health program involved is an entitlement program 
or subject to appropriations. CBO estimates that additional 
payments under S. 648 would be less than $500,000 over the 
2004-2008 period.
    S. 648 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Any costs that public schools of pharmacy incur to assist 
faculty members with loan payments would be voluntary.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 648 is shown in the following table. The 
costs of this legislation fall within budget functions 550 
(health) and 800 (general government).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                          ------------------------------------------------------
                                                              2004       2005       2006       2007       2008
----------------------------------------------------------------------------------------------------------------
                                CHANGES IN SPENDING SUBJECT TO APPROPRIATIONS \1\

Estimated Authorization Level............................          3          8         13         18         22
Estimated Outlays........................................          2          5         11         15         18
----------------------------------------------------------------------------------------------------------------
\1\ Enacting S. 648 also would increase direct spending, but the estimated cost would be less than $500,000 over
  the 2004-2008 period.

    Basis of estimate: For this estimate, CBO assumes that S. 
648 will be enacted by the fall of 2003 and that the necessary 
amounts to implement the bill will be appropriated each year. 
CBO estimates that implementing S. 648 would require new 
discretionary spending of about $51 million over the next five 
years. Enacting the legislation also could increase direct 
spending, but any such effects would not be significant.

Spending subject to appropriation

    S. 648 would establish a loan repayment program for 
individuals with a pharmacy degree who agree to work for a 
minimum of two years in areas with a critical shortage of 
pharmacists. The program would reimburse up to $35,000 per year 
for loans covering tuition and living expenses, and would cover 
the tax liability associated with those reimbursements.
    Based on information from HRSA, CBO estimates that about 50 
graduates would participate in 2004, rising to about 250 
graduates each year by 2008. CBO estimates that annual loan 
repayments, including payments for tax liability, would average 
about $30,000 per participant in 2004, and that participants 
would receive this aid for two to three years.
    The bill would allow HRSA to recover payments to 
individuals who fail to complete two years of service in an 
area with a shortage of pharmacists. CBO estimates that the 
percentage of pharmacists who fail to complete two years of 
service would be between 5 percent and 15 percent, which is 
similar to the experience of the National Health Service Corps 
program.
    CBO estimates that the cost of implementing this loan 
repayment program would be less than $2 million in 2004 and $49 
million over the 2004-2008 period, assuming the appropriation 
of the necessary amounts.
    The bill also would establish a loan repayment program for 
pharmacy school graduates and near-graduates who serve on the 
faculty of a pharmacy school. Under the bill, HRSA would enter 
into contracts with students or graduates who have agreed to 
work for a minimum of two years at a school of pharmacy. HRSA 
would reimburse participants up to $35,000 per year for their 
outstanding loans. The school hiring the participant would be 
required to match federal payments, and would not be able to 
reduce the faculty member's salary to account for the loan 
repayments.
    Based on information from HRSA, CBO expects that there 
would not be much participation by pharmacy schools in the 
faculty loan repayment program because of the matching 
requirement. CBO estimates that the number of participants in 
the loan repayment program would grow from 5 in 2004 to 30 in 
2008. We assume that participants would receive loan 
reimbursement for two years on average, in amounts averaging 
between $22,000 and $25,000 per year over this period. CBO 
estimates that implementing this program would cost less than 
$500,000 in 2004 and $3 million over the 2004-2008 period, 
assuming the appropriation of the necessary amounts.

Direct spending

    Under current law, settlements and tort claims arising from 
the actions of licensed health care providers in federally 
funded health centers are paid from the Treasury's Judgment 
Fund. The bill would expand that coverage to include tort 
claims arising from the actions of licensed pharmacists 
participating in the new loan repayment program. Based on past 
experience with spending from the Judgment Fund for providers 
covered under section 224 and the small number of pharmacists 
who would likely be affected by this provision, CBO estimates 
that any payments from the Fund would be less than $500,000 
during the 2004-2008 period.
    Intergovernmental and private-sector impact: S. 648 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. Any costs that public schools of pharmacy 
incur to assist faculty members with loan payments would be 
voluntary.
    Estimate prepared by: Federal Costs: Alexis Ahlstrom; 
Impact on State, Local, and Tribal Governments: Leo Lex; and 
Impact on the Private Sector: Daniel Wilmoth.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                    VI. Regulatory Impact Statement

    The committee has determined that there will be minimal 
increases in the regulatory burden imposed by this bill.

           VII. Application of Law to the Legislative Branch

    The Committee has determined that there is no legislative 
impact.

                   VIII. Section-by-Section Analysis


Section 1. Short title

    This bill may be referred to as the ``Pharmacy Education 
Aid Act of 2003''.

Section 2. Findings

    The findings describe the nature of the pharmacist 
shortage, particularly as it impacts rural areas, and the need 
both to educate a new generation of pharmacists and to 
encourage new pharmacists to practice in underserved areas and 
facilities.

Section 3. Health professions programs related to the practice of 
        pharmacy

    The act amends Title VII of the Public Health Service Act 
to create two student-loan repayment programs for pharmacists.
            Loan repayment program for pharmacists serving in critical 
                    shortage facilities
    The act authorizes the Secretary of Health and Human 
Services to repay the student loans of licensed pharmacists who 
agree to serve for at least 2 years at a facility designated by 
the Secretary as having a critical shortage of pharmacists.
    For each year of obligated service for which a pharmacist 
contracts to serve, the Secretary may pay up to $35,000 of the 
pharmacist's student loans.
    Similar to the National Health Service Corps student loan 
repayment program, the act authorizes the Secretary to 
reimburse the pharmacist for tax liability resulting from the 
student loan payments. To do so, the Secretary shall make 
payments to the pharmacist in an amount equal to 39 percent of 
the total amount of loan repayments made for the taxable year 
involved.
    In entering into student loan repayment agreements under 
this section, the Secretary shall give preference to qualified 
applicants with the greatest financial need.
    The act requires the Secretary to report to Congress 
annually on the program. The Secretary must also report to 
Congress within 5 years after enactment on how the program 
carried out under this section interacts with other Federal 
loan repayment programs for pharmacists and the relative 
effectiveness of such programs in increasing pharmacists 
practicing in underserved areas.
    A pharmacist who breaches his or her agreement under this 
section shall be liable to the Federal Government for the 
amount of the award and for interest on such amount.
    The act authorizes such sums as may be necessary for fiscal 
years 2003 through 2008.
            Pharmacy faculty loan repayment program
    The act authorizes the Secretary of Health and Human 
Services to repay the student loans of pharmacists or pharmacy 
students who agree to serve for at least 2 years as a faculty 
member of a qualified school of pharmacy. To be qualified, a 
school of pharmacy must provide clinical experience that 
includes service provided for, or a facility that serves, 
medically underserved citizens.
    For each year of service, the Secretary may not pay more 
than $35,000 of the principal and interest of the educational 
loans of such individuals.
    Eligible individuals include those who have a baccalaureate 
degree in pharmacy or a Doctor of Pharmacy degree from an 
accredited program, or are enrolled as a full-time student in 
an accredited pharmacy program and are in the final year of a 
course of study leading to a baccalaureate degree in pharmacy 
or a Doctor of Pharmacy degree.
    The Secretary may not enter into a loan-repayment contract 
unless the individual involved has entered into a contract with 
a school of pharmacy to serve as a member of the facility of 
the school for not less than 2 years; and the contract provides 
that the school will, for each year for which the individual 
will serve as a member of the faculty under contract with the 
school, make payments of the principal and interest due on the 
educational loans of the individual for such year in an amount 
equal to the amount of such payments made by the Secretary for 
the year.
    The payments made by the school must be in addition to the 
compensation that the individual would otherwise receive for 
serving as a member of the faculty.
    The act authorizes such sums as may be necessary to carry 
out the program in fiscal years 2004 through 2008.

                      IX. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

PUBLIC HEALTH SERVICE ACT

           *       *       *       *       *       *       *



                TITLE VII--HEALTH PROFESSIONS EDUCATION

                         PART A--STUDENT LOANS

   Subpart I--Insured Health Education Assistance Loans to Graduate 
                                Students

SEC. 701. STATEMENT OF PURPOSE.

           *       *       *       *       *       *       *


         PART E--HEALTH PROFESSIONS AND PUBLIC HEALTH WORKFORCE

    Subpart 1--Health Professions Workforce Information and Analysis

SEC. 761. HEALTH PROFESSIONS WORKFORCE INFORMATION AND ANALYSIS.

    (a) Purpose.--* * *

           *       *       *       *       *       *       *


              ``Subpart 3--Pharmacy Workforce Development

``SEC. 781. LOAN REPAYMENT PROGRAM FOR PHARMACISTS SERVING IN CRITICAL 
                    SHORTAGE FACILITIES.

  (a) In General.--In the case of any individual--
          (1) who has received a baccalaureate degree in 
        pharmacy or a Doctor of Pharmacy degree from an 
        accredited program;
          (2) who obtained an educational loan for pharmacy 
        education costs; and
          (3) who is licensed without restrictions in the State 
        in which the designated health care facility is 
        located;
the Secretary may enter into an agreement with such individual 
who agrees to serve as a full-time pharmacist for a period of 
not less than 2 years at a designated health care facility, to 
make payments in accordance with subsection (b), for and on 
behalf of that individual, on the principal of and interest on 
any loan of that individual described in paragraph (2) which is 
outstanding on the date the individual begins such service.
  (b) Manner of Payments.--
          (1) In general.--The payments described in subsection 
        (a) may consist of payment, in accordance with 
        paragraph (2), on behalf of the individual of the 
        principal, interest, and related expenses on government 
        and commercial loans received by the individual 
        regarding the undergraduate or graduate education of 
        the individual (or both), which loans were made for--
                  (A) tuition expenses;
                  (B) all other reasonable educational 
                expenses, including fees, books, and laboratory 
                expenses, incurred by the individual; or
                  (C) reasonable living expenses as determined 
                by the Secretary.
          (2) Payments for years served.--
                  (A) In general.--For each year of obligated 
                service that an individual contracts toserve 
under subsection (a) the Secretary may pay up to $35,000 on behalf of 
the individual for loans described in paragraph (1). In making a 
determination of the amount to pay for a year of such service by an 
individual, the Secretary shall consider the extent to which each such 
determination--
                          (i) affects the ability of the 
                        Secretary to maximize the number of 
                        agreements that may be provided under 
                        this section from the amounts 
                        appropriated for such agreements;
                          (ii) provides an incentive to serve 
                        in areas with the greatest shortages of 
                        pharmacists; and
                          (iii) provides an incentive with 
                        respect to the pharmacist involved 
                        remaining in the area and continuing to 
                        provide pharmacy services after the 
                        completion of the period of obligated 
                        service under agreement.
                  (B) Repayment schedule.--Any arrangement made 
                by the Secretary for the making of loan 
                repayments in accordance with this subsection 
                shall provide that any repayments for a year of 
                obligated service shall be made not later than 
                the end of the fiscal year in which the 
                individual completes such year of service.
          (3) Tax liability.--For the purpose of providing 
        reimbursements for tax liability resulting from 
        payments under paragraph (2) on behalf of an 
        individual--
                  (A) the Secretary shall, in addition to such 
                payments, make payments to the individual in an 
                amount equal to 39 percent of the total amount 
                of loan repayments made for the taxable year 
                involved; and
                  (B) may make such additional payments as the 
                Secretary determines to be appropriate with 
                respect to such purpose.
          (4) Payment schedule.--The Secretary may enter into 
        an agreement with the holder of any loan for which 
        payments are made under this section to establish a 
        schedule for the making of such payments.
    (c) Preferences.--In entering into agreements under 
subsection (a), the Secretary shall give preference to 
qualified applicants with the greatest financial need.
    (d) Reports.--
          (1) Annual report.--Not later than 18 months after 
        the date of enactment of the Pharmacy Education Aid 
        Act, and annually thereafter, the Secretary shall 
        prepare and submit to Congress a report describing the 
        program carried out under this section, including 
        statements regarding--
                  (A) the number of applicants and contract 
                recipients;
                  (B) the amount of loan repayments made;
                  (C) which educational institution the 
                recipients attended;
                  (D) the number and practice locations of the 
                loan repayment recipients at health care 
                facilities with a critical shortage of 
                pharmacists;
                  (E) the default rate and actions required;
                  (F) the amount of outstanding default funds 
                of the loan repayment program;
                  (G) to the extent that it can be determined, 
                the reason for the default;
                  (H) the demographics of the individuals 
                participating in the loan repayment program; 
                and
                  (I) an evaluation of the overall costs and 
                benefits of the program.
          (2) 5-year report.--Not later than 5 years after the 
        date of enactment of the Pharmacy Education Aid Act, 
        the Secretary shall prepare and submit to Congress a 
        report on how the program carriedout under this section 
interacts with other Federal loan repayment programs for pharmacists 
and determining the relative effectiveness of such programs in 
increasing pharmacists practicing in underserved areas.
    (e) Application of Certain Provisions.--
          (1) In general.--The provisions of section 338C, 
        338G, and 338I shall apply to the program established 
        under this section in the same manner and to the same 
        extent as such provisions apply to the National Health 
        Service Corps Loan Repayment Program under subpart III 
        of part D of title III, including the applicability of 
        provisions regarding reimbursements for increased tax 
        liability and bankruptcy.
          (2) Breach of agreement.--An individual who enters 
        into an agreement under subsection (a) shall be liable 
        to the Federal Government for the amount of the award 
        under such agreement (including amounts provided for 
        expenses related to such attendance), and for interest 
        on such amount at the maximum legal prevailing rate, if 
        the individual fails to provide health services in 
        accordance with the program under this section for the 
        period of time applicable under the program.
          (3) Waiver or suspension of liability.--In the case 
        of an individual or health facility making an agreement 
        for purposes of subsection (a), the Secretary shall 
        provide for the waiver or suspension of liability under 
        paragraph (2) if compliance by the individual or the 
        health facility, as the case may be, with the agreement 
        involved is impossible, or would involve extreme 
        hardship to the individual or facility, and if 
        enforcement of the agreements with respect to the 
        individual or facility would be unconscionable.
          (4) Date certain for recovery.--Subject to paragraph 
        (3), any amount that the Federal Government is entitled 
        to recover under paragraph (2) shall be paid to the 
        United States not later than the expiration of the 3-
        year period beginning on the date the United States 
        becomes so entitled.
          (5) Availability.--Amounts recovered under paragraph 
        (2) with respect to a program under this section shall 
        be available for the purposes of such program, and 
        shall remain available for such purposes until 
        expended.
    (f) Definition.--In this section, the term ``health care 
facility'' means a facility with a critical shortage of 
pharmacists as determined by the Secretary.
  (g) Authorization of Appropriations.--For the purpose of 
payments under agreements entered into under subsection (a), 
there are authorized to be appropriated such sums as may be 
necessary for each of fiscal years 2004 through 2008.

SEC. 782. PHARMACY FACULTY LOAN REPAYMENT PROGRAM.

    (a) Establishment of Program.--The Secretary shall 
establish a program under which the Secretary will enter into 
contracts with individuals described in subsection (b) and such 
individuals will agree to serve as faculty members of schools 
of pharmacy in consideration of the Federal Government agreeing 
to pay, for each year of such service, not more than $35,000 of 
the principal and interest of the educational loans of such 
individuals.
    (b) Eligible Individuals.--An individual is described in 
this subsection if such individual--
          (1) has a baccalaureate degree in pharmacy or a 
        Doctor of Pharmacy degree from an accredited program; 
        or
          (2) is enrolled as a full-time student--
                  (A) in an accredited pharmacy program; and
                  (B) in the final year of a course of a study 
                or program, offered by such institution 
andapproved by the Secretary, leading to a baccalaureate degree in 
pharmacy or a Doctor of Pharmacy degree from such a school.
    (c) Requirements Regarding Faculty Positions.--The 
Secretary may not enter into a contract under subsection (a) 
unless--
          (1) the individual involved has entered into a 
        contract with a school of pharmacy to serve as a member 
        of the faculty of the school for not less than 2 years; 
        and
          (2) the contract referred to in paragraph (1) 
        provides that--
                  (A) the school will, for each year for which 
                the individual will serve as a member of the 
                faculty under contract with the school, make 
                payments of the principal and interest due on 
                the educational loans of the individual for 
                such year in an amount equal to the amount of 
                such payments made by the Secretary for the 
                year;
                  (B) the payments made by the school pursuant 
                to subparagraph (A) on behalf of the individual 
                will be in addition to the compensation that 
                the individual would otherwise receive for 
                serving as a member of such faculty; and
                  (C) the school, in making a determination of 
                the amount of compensation to be provided by 
                the school to the individual for serving as a 
                member of the faculty, will make the 
                determination without regard to the amount of 
                payments made (or to be made) to the individual 
                by the Federal Government under subsection (a).
    (d) Applicability of Certain Provisions.--The provisions of 
sections 338C, 338G, and 338I shall apply to the program 
established in subsection (a) to the same extent and in the 
same manner as such provisions apply to the National Health 
Service Corps Loan Repayment Program established in subpart III 
of part D of title III, including the applicability of 
provisions regarding reimbursements for increased tax liability 
and regarding bankruptcy.
    (e) Authorization of Appropriations.--For the purpose of 
carrying out this section, there are authorized to be 
appropriated such sums as may be necessary for each of fiscal 
years 2004 through 2008.

SEC. 783. DEFINITIONS.

  In this subpart:
          (1) School of pharmacy.--the term ``school of 
        pharmacy'' means a college or school of pharmacy (as 
        defined in section 799B) that, in providing clinical 
        experience for students, requires that the 
studentsserve in a clinical rotation in which pharmacist services (as 
defined in section 331(a)(3)(E)) are provided at or for--
                  (A) a medical facility that serves a 
                substantial number of individuals who reside in 
                or are members of a medically underserved 
                community (as so defined);
                  (B) an entity described in any of 
                subparagraphs (A) through (L) of section 
                340B(a)(4) (relating to the definition of 
                covered entity);
                  (C) a health care facility of the Department 
                of Veterans Affairs or of any of the Armed 
                Forces of the United States;
                  (D) a health care facility of the Bureau of 
                Prisons;
                  (E) a health care facility operated by, or 
                with funds received from, the Indian Health 
                Service; or
                  (F) a disproportionate share hospital under 
                section 1923 of the Social Security Act.
          (2) Pharmacist services.--The term ``pharmacist 
        services'' includes drug therapy management services 
        furnished by a pharmacist, individually or on behalf of 
        a pharmacy provider, and such services and supplies 
        furnished incident to the pharmacist's drug therapy 
        management services, that the pharmacist is legally 
        authorized to perform (in the State in which the 
        individual performs such services) in accordance with 
        State law (or the State regulatory mechanism provided 
        for by State law).

           *       *       *       *       *       *       *