A bill to amend titles II and XVIII of the Social Security Act to include qualified drugs, requiring a physician's prescription or certification and approved by a formulary committee, among the items and services covered under the hospital insurance program.

Provides for the inclusion of qualified drugs, requiring a physician's prescription or certification and approved by a Formulary Committee, among the items and services covered under the hospital insurance program administered pursuant to the Medicare and Old-Age, Survivors', and Disability Insurance programs of the Social Security Act.

Establishes a Formulary Committee within the Department of Health, Education, and Welfare to list in standardized terms the drugs covered by insurance based on the suitability of such drugs for patient care. Authorizes the Formulary Committee to establish maximum allowable costs for qualified drugs under this Act.