Sponsors (4)
The bill would lower drug costs for federal beneficiaries and help align some U.S. prices with international norms, but risks reduced access to new therapies, cost-shifting to nonfederal payers, and legal/implementation challenges.
Federal program enrollees (Medicare, Medicaid, CHIP, TRICARE, VA, IHS, FEHB) would pay drug prices capped to international reference prices, lowering out-of-pocket costs for beneficiaries and reducing federal program drug spending.
Many patients and taxpayers would see U.S. retail drug prices pressured toward lower international norms by using prices from 12 high-income reference countries, constraining excessive pricing.
Uninsured individuals would be eligible to buy drugs at the reference price when manufacturers must offer drugs to all individuals, improving affordability for people without coverage.
Patients with chronic conditions and others may face reduced access to new therapies if manufacturers withhold products or delay U.S. launches in response to reference pricing.
Nonfederal purchasers, including privately insured people and uninsured individuals, could face higher prices or cost-shifting as manufacturers adjust pricing to offset capped payments to federal programs.
Employer-sponsored plans and private insurers (and their enrollees) could experience pressure on formularies, pricing arrangements, or benefit design, potentially reducing access or shifting cost-sharing onto employees.
Based on analysis of 2 sections of legislative text.
Caps retail list prices in major federal health programs at annual reference prices set by HHS and requires manufacturers to offer drugs at those prices to all buyers.
Introduced May 14, 2025 by Jeff Merkley · Last progress May 14, 2025
Requires the HHS Secretary to set an annual reference price for every prescription drug and bars retail list prices in major federal health programs from exceeding that reference price. If manufacturers charge more than the reference price for drugs dispensed to enrollees of programs like Medicare, Medicaid, CHIP, TRICARE, VA care, the Federal Employees Health Benefits Program, or Indian Health programs, they face large civil penalties; collected penalties are transferred to the NIH for drug research funding. The law also requires manufacturers to offer drugs at the reference price to all individuals, including the uninsured and those in private group plans.