DEMONSTRATION PROJECT ON COVERAGE OF SELECTED OVER-THE-COUNTER DRUGS UNDER THE PHARMACY BENEFITS PROGRAM.

SEC. 705. DEMONSTRATION PROJECT ON COVERAGE OF SELECTED OVER-THE-COUNTER DRUGS UNDER THE PHARMACY BENEFITS PROGRAM.(a) Requirement to Conduct Demonstration.—The Secretary of Defense shall conduct a demonstration project under section 1092 of title 10, United States Code, to allow particular over-the-counter drugs to be included on the uniform formulary under section 1074g of such title.(b) Elements of Demonstration Project.—(1) Inclusion of certain over-the-counter drugs.—(A) As part of the demonstration project, the Secretary shall modify uniform formulary specifications under section 1074g(a) of such title to include an over-the-counter drug (referred to in this section as an “OTC drug”) on the uniform formulary if the Pharmacy and Therapeutics Committee finds that the OTC drug is cost-effective and therapeutically equivalent to a prescription drug. If the Pharmacy and Therapeutics Committee makes such a finding, the OTC drug shall be considered to be in the same therapeutic class of pharmaceutical agents as the prescription drug.(B) An OTC drug shall be made available to a beneficiary through the demonstration project, but only if—(i) the beneficiary has a prescription for a drug requiring a prescription; and(ii) pursuant to subparagraph (A), the OTC drug—(I) is on the uniform formulary; and120 STAT. 2281(II) has been determined to be therapeutically equivalent to the prescription drug.(2) Conduct through military facilities, retail pharmacies, or mail order program.—The Secretary shall conduct the demonstration project through at least two of the means described in subparagraph (E) of section 1074g(a)(2)(E) of such title through which OTC drugs are provided and may conduct the demonstration project throughout the entire pharmacy benefits program or at a limited number of sites. If the project is conducted at a limited number of sites, the number of sites shall be not less than five in each TRICARE region for each of the two means described in such subparagraph.(3) Period of demonstration.—The Secretary shall provide for conducting the demonstration project for a period of time necessary to evaluate the feasibility and cost effectiveness of the demonstration. Such period shall be at least as long as the period covered by pharmacy contracts in existence on the date of the enactment of this Act (including any extensions of the contracts), or five years, whichever is shorter.(4) Implementation deadline.—Implementation of the demonstration project shall begin not later than May 1, 2007.(c) Evaluation of Demonstration Project.—The Secretary shall evaluate the demonstration project for the following:(1) The costs and benefits of providing OTC drugs under the pharmacy benefits program in each of the means chosen by the Secretary to conduct the demonstration project.(2) The clinical effectiveness of providing OTC drugs under the pharmacy benefits program.(3) Customer satisfaction with the demonstration project.(d) Report.—Not later than two years after implementation of the demonstration project begins, the Secretary shall submit to the Committees on Armed Services of the Senate and House of Representatives a report on the demonstration project. The report shall contain—(1) the evaluation required by subsection (c);(2) recommendations for improving the provision of OTC drugs under the pharmacy benefits program; and(3) recommendations on whether permanent authority should be provided to cover OTC drugs under the pharmacy benefits program.(e) Continuation of Demonstration Project.—If the Secretary recommends in the report under subsection (d) that permanent authority should be provided, the Secretary may continue the demonstration project for up to one year after submitting the report.(f) Definitions.—In this section:(1) The term “drug” means a drug, including a biological product, within the meaning of section 1074g(f)(2) of title 10, United States Code.(2) The term “OTC drug” has the meaning indicated for such term in subsection (b)(1)(A).(3) The term “over-the-counter drug” means a drug that is not subject to section 503(b) of the Federal Food, Drug, and Cosmetic Act.(4) The term “prescription drug” means a drug that is subject to section 503(b) of the Federal Food, Drug, and Cosmetic Act.120 STAT. 2282