End Price Gouging for Medications Act

This bill would set yearly price limits for prescription drugs. The Department of Health and Human Services would set a “reference price” for each drug every year. In federal health programs, the list price could not be higher than that amount. The reference price would be the lowest price found in certain other countries when enough data exists; if not, the price would be based on the drug’s benefits, value, patient access, and research costs.

These rules would apply to Medicare, Medicaid, CHIP, TRICARE, care from the Department of Veterans Affairs, the Federal Employees Health Benefits Program, and Indian Health programs. Drug makers would also have to offer the reference price to everyone, including people without insurance and those with private or job-based plans. For people with insurance, the plan’s payment plus your share could not be more than the reference price. Companies that overcharge would face big fines, and that money would go to the National Institutes of Health to support drug research. The limits would cover brand-name, generic, and biologic drugs.

• Who is affected: People in Medicare, Medicaid, CHIP, TRICARE, VA care, federal employee plans, and Indian Health programs—plus everyone else, since manufacturers must offer the reference price to all individuals.
• What changes: HHS sets annual reference prices based on the lowest prices in certain countries or on factors like benefit and R&D costs; federal program prices can’t exceed that number; manufacturers must honor that price for all buyers; overcharging brings fines equal to five times the extra amount; fines fund NIH research; applies to brand, generic, and biologic drugs.
• When: Reviewed and updated each year; penalty funds are transferred to NIH each year.