To amend title 10, United States Code, to restore the eligibility of former members of the uniformed services who are entitled to retired or retainer pay or equivalent pay, or a dependent of such members, and who are eligible for hospital insurance benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) for prescription pharmaceuticals through the military medical system.

Directs the Secretary of Defense to establish a program to provide prescription pharmaceuticals to members and former members of the armed forces (and dependents of such members) who are entitled to certain retired or retainer pay and Medicare benefits and who would be eligible for armed forces health benefits but for their Medicare eligibility.

Requires the Secretary to: (1) determine the pharmaceuticals that may be obtained by eligible persons; and (2) establish a fee or copayment to be paid for such pharmaceuticals.

Bars such fees or copayments from exceeding those established under the National Defense Authorization Act for Fiscal Year 1993 for participation in the pharmaceutical demonstration project or the retail pharmacy network included in a managed health care program.