Sponsors (4)
The bill would cap what many patients pay for prescription drugs and lower prices for uninsured and privately insured buyers, at the likely cost of reduced manufacturer revenues that could delay launches, constrain availability, and introduce uncertainty into NIH funding.
Medicare, Medicaid, CHIP, VA, TRICARE, and FEHB beneficiaries would pay no more than a statutory annual reference price for covered prescription drugs, reducing out‑of‑pocket costs for many patients with chronic and high‑cost conditions.
Uninsured and privately insured individuals would be offered covered drugs at the reference price, which could lower retail prices and reduce cost‑sharing for people without strong pharmacy coverage.
Penalty revenues tied to manufacturer noncompliance would be directed to the NIH, increasing funding for biomedical research and supporting future drug R&D without new discretionary appropriations.
U.S. drug manufacturers could face substantially lower revenues from covered sales, which may prompt higher list prices in non‑covered channels or reduced overall product availability for some medicines.
Manufacturers may delay U.S. launches or refrain from seeking additional indications for drugs if reference‑price limits reduce expected U.S. returns, potentially slowing patient access to new or expanded therapies.
Routing penalty receipts to NIH creates budgeting uncertainty because funds depend on enforcement outcomes and could be legally contested, making R&D funding less predictable.
Based on analysis of 2 sections of legislative text.
Establishes annual reference prices for prescription drugs and caps retail list prices for major Federal health program beneficiaries, with manufacturer penalties for noncompliance.
Official title: Require the Secretary of Health and Human Services to establish reference prices for prescription drugs for purposes of Federal health programs, and for other purposes.
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 the retail list price charged to enrollees or beneficiaries in major Federal health programs from exceeding that reference price. Reference prices are generally the lowest retail list price from a specified set of 12 foreign reference countries (when at least three have usable data); for drugs without sufficient foreign data, the Secretary sets a price using factors like therapeutic benefit, value, access, and R&D costs. Manufacturers must offer covered drugs at the reference price to all purchasers, including uninsured and privately insured patients (private plans are covered if plan payment plus patient cost-sharing would otherwise exceed the reference price). Civil penalties are imposed on manufacturers who do not comply: an annual penalty per drug equal to five times the difference between what Federal programs actually paid and what they would have paid under compliance. Penalties collected are deposited in the Treasury and transferred annually to NIH for drug research and development.