Sponsors (2)
The bill aims to lower prices and improve emergency supply access by enabling and requiring nonprofit drug/device producers to prioritize affordability and give the federal stockpile priority access, but it may introduce compliance, funding, tax-revenue, and regulatory-uncertainty risks that could slow production or shift costs elsewhere.
Patients (including those with chronic conditions) and Medicare/Medicaid beneficiaries will likely pay less for certain drugs and devices because designated nonprofit manufacturers/distributors can retain 501(c)(3) status while being required to prioritize affordability and cost-transparency, which can lower prices for public payers and taxpayers.
The federal government (and thus taxpayers) gains priority, near-cost access to designated supplies for the Strategic National Stockpile, improving emergency preparedness and access to critical medical supplies during crises.
Nonprofit manufacturers/distributors may incur higher compliance and operational costs and face limits on transactions with for-profit entities, reducing funding and supply options—this could slow production, limit scale, increase administrative burden, and indirectly raise prices or reduce availability for patients.
Allowing tax-exemptions or tax-favored treatment for manufacturing/distribution could reduce federal tax revenue and shift fiscal burdens to taxpayers if cost savings do not offset the revenue loss.
Delegating determinations of 'eligible products' and other discretionary rules to the Secretary(s) creates regulatory ambiguity that can complicate planning and procurement for nonprofits, hospitals, and health systems.
Based on analysis of 2 sections of legislative text.
Permits certain IRS‑designated nonprofits to manufacture or distribute eligible drugs and devices without losing 501(c)(3) status, subject to eligibility and conflict-of-interest rules.
Official title: Amend the Internal Revenue Code of 1986 to provide rules for determining the tax-exempt status of organizations that manufacture and distribute drugs and medical devices to meet public health needs, and for other purposes.
Introduced December 3, 2025 by Jacklyn Sheryl Rosen · Last progress December 3, 2025
Allows certain nonprofit organizations to make or distribute drugs and medical devices without losing their 501(c)(3) tax-exempt status if they receive a new federal designation as a “public interest drug or medical device health care organization.” Sets eligibility rules, conflict-of-interest limits, control restrictions with for-profit manufacturers/distributors, and defines what products qualify (including shortage, affordability, or public health importance criteria determined with HHS).