Title II, SEC. 2001. COVERAGE OF OUTPATIENT PRESCRIPTION DRUGS. (a) Covered Outpatient Drugs as Medical and Other Health Services. Section 1861(s)(2)(J) of the Social Security Act (42 U.S.C. 1395x(s)(2)(J)) is amended to read as follows: ``(J) covered outpatient drugs;''. (b) Definition of Covered Outpatient Drug. Section 1861(t) of such Act (42 U.S.C. 1395x(t)), as amended by section 13553(b) of the Omnibus Budget Reconciliation Act of 1993 (hereafter in this subtitle referred to as ``OBRA 1993''), is amended (1) in the heading, by adding at the end the following: ``; Covered Outpatient Drugs''; (2) in paragraph (1), by striking ``paragraph (2)'' and inserting ``the succeeding paragraphs of this subsection''; and (3) by striking paragraph (2) and inserting the following: ``(2) Except as otherwise provided in paragraph (3), the term `covered outpatient drug' means any of the following products used for a medically accepted indication (as described in paragraph (4)): ``(A) A drug which may be dispensed only upon prescription and ``(i) which is approved for safety and effectiveness as a prescription drug under section 505 or 507 of the Federal Food, Drug, and Cosmetic Act or which is approved under section 505(j) of such Act; ``(ii)(I) which was commercially used or sold in the United States before the date of the enactment of the Drug Amendments of 1962 or which is identical, similar, or related (within the meaning of section 310.6(b)(1) of title 21 of the Code of Federal Regulations) to such a drug, and (II) which has not been the subject of a final determination by the Secretary that it is a `new drug' (within the meaning of section 201(p) of the Federal Food, Drug, and Cosmetic Act) or an action brought by the Secretary under section 301, 302(a), or 304(a) of such Act to enforce section 502(f) or 505(a) of such Act; or ``(iii)(I) which is described in section 107(c)(3) of the Drug Amendments of 1962 and for which the Secretary has determined there is a compelling justification for its medical need, or is identical, similar, or related (within the meaning of section 310.6(b)(1) of title 21 of the Code of Federal Regulations) to such a drug, and (II) for which the Secretary has not issued a notice of an opportunity for a hearing under section 505(e) of the Federal Food, Drug, and Cosmetic Act on a proposed order of the Secretary to withdraw approval of an application for such drug under such section because the Secretary has determined that the drug is less than effective for all conditions of use prescribed, recommended, or suggested in its labeling; ``(B) A biological product which ``(i) may only be dispensed upon prescription, ``(ii) is licensed under section 351 of the Public Health Service Act, and ``(iii) is produced at an establishment licensed under such section to produce such product; and ``(C) Insulin certified under section 506 of the Federal Food, Drug, and Cosmetic Act. ``(3) The term `covered outpatient drug' does not include any product which is intravenously administered in a home setting unless it is a covered home infusion drug (as described in paragraph (5)). ``(4) For purposes of paragraph (2), the term `medically accepted indication', with respect to the use of an outpatient drug, includes any use which has been approved by the Food and Drug Administration for the drug, and includes another use of the drug if ``(A) the drug has been approved by the Food and Drug Administration; and ``(B)(i) such use is supported by one or more citations which are included (or approved for inclusion) in one or more of the following compendia: the American Hospital Formulary Service-Drug Information, the American Medical Association Drug Evaluations, the United States Pharmacopoeia-Drug Information, and other authoritative compendia as identified by the Secretary, unless the Secretary has determined that the use is not medically appropriate or the use is identified as not indicated in one or more such compendia, or ``(ii) the carrier involved determines, based upon guidance provided by the Secretary to carriers for determining accepted uses of drugs, that such use is medically accepted based on supportive clinical evidence in peer reviewed medical literature appearing in publications which have been identified for purposes of this clause by the Secretary. The Secretary may revise the list of compendia in paragraph (B)(i) designated as appropriate for identifying medically accepted indications for drugs. ``(5)(A) For purposes of paragraph (3), the term `covered home infusion drug' means a covered outpatient drug dispensed to an individual that ``(i) is administered intravenously, subcutaneously, epidurally, or through other means determined by the Secretary, using an access device that is inserted in to the body and an infusion device to control the rate of flow of the drug, ``(ii) is administered in the individual's home (including an institution used as his home, other than a hospital under subsection (e) or a skilled nursing facility that meets the requirements of section 1819(a)), and ``(iii)(I) is an antibiotic drug and the Secretary has not determined, for the specific drug or the indication to which the drug is applied, that the drug cannot generally be administered safely and effectively in a home setting, or ``(II) is not an antibiotic drug and the Secretary has determined, for the specific drug or the indication to which the drug is applied, that the drug can generally be administered safely and effectively in a home setting. ``(B) Not later than January 1, 1996, (and periodically thereafter), the Secretary shall publish a list of the drugs, and indications for such drugs, that are covered home infusion drugs, with respect to which home infusion drug therapy may be provided under this title.''. (c) Exceptions; Exclusions From Coverage. Section 1862(a) of such Act (42 U.S.C. 1395y(a)), as amended by sections 4034(b)(4) and 4118(b), is amended (1) by striking ``and'' at the end of paragraph (15), (2) by striking the period at the end of paragraph (16) and inserting ``; or'', and (3) by inserting after paragraph (16) the following new paragraph: ``(17) A covered outpatient drug (as described in section 1861(t)) ``(A) when furnished as part of, or as incident to, any other item or service for which payment may be made under this title, or ``(B) which is listed under paragraph (2) of section 1927(d) (other than subparagraph (I) or (J) of such paragraph) as a drug which may be excluded from coverage under a State plan under title XIX and which the Secretary elects to exclude from coverage under this part. (d) Other Conforming Amendments. (1) Section 1861 of such Act (42 U.S.C. 1395x) is amended (A) in subsection (s)(2), as amended by section 13553 of OBRA 1993 (i) by striking subparagraphs (O) and (Q), (ii) by adding ``and'' at the end of subparagraph (N), (iii) by striking ``; and'' at the end of subparagraph (P) and inserting a period, and (iv) by redesignating subparagraph (P) as subparagraph (O); and (B) by striking the subsection (jj) added by section 4156(a)(2) of the Omnibus Budget Reconciliation Act of 1990. (2) Section 1881(b)(1)(C) of such Act (42 U.S.C. 1395rr(b)(1)(C)), as amended by section 13566(a) of OBRA 1993, is amended by striking ``section 1861(s)(2)(P)'' and inserting ``section 1861(s)(2)(O)''.