A bill to amend the Social Security Act to provide coverage for out-of-hospital prescription drugs under medicare.

Authorizes payments under title XVIII (Medicare) of the Social Security Act to cover the costs of out-of-hospital prescription drugs under regulations established by the Secretary of Health, Education, and Welfare, with the advice of an Expert Committee on Drug Coverage established under this Act.

Provides for the determination of a "reasonable drug charge" for drugs covered under this Act.

Establishes, within the Department of Health, Education, and Welfare a Formulary Committee. Directs such Formulary Committee to compile, publish, and make available a Formulary of the United States. Provides that such Formulary shall contain an alphabetically arranged listing, by established name, of those drugs and bilogicals that shall be deemed qualified drugs for purposes of the payments authorized under this Act.

Directs the Formulary Committee to exclude from the Formulary any drugs which the Committee determines are not necessary for proper patient care.