Sponsors (2)
The bill aims to lower prices and secure emergency supplies by enabling tax-exempt nonprofit manufacturers that must prioritize affordability, but those benefits could be limited by reduced financing/supply options, higher compliance costs, potential tax revenue loss, and regulatory uncertainty.
Medicare and Medicaid beneficiaries (and taxpayers) could pay less because designated nonprofits must prioritize affordability and cost-transparency, likely reducing prices paid by public programs and overall health-system costs.
Patients with chronic conditions and public insurance enrollees could gain greater access to lower-priced drugs and devices because nonprofits can retain 501(c)(3) status while producing affordable products.
The federal government (and thus taxpayers) would have priority access to supplies for the Strategic National Stockpile at near-cost prices, strengthening emergency preparedness.
Nonprofit manufacturers may face reduced capital and constrained supply-chain options because limits on funding sources and bans on certain transactions with for-profit 'disqualified entities' could slow production or reduce availability of some drugs/devices.
Nonprofits could incur meaningful compliance and operational costs from conflict-of-interest rules, reporting, and affordability guidelines, which may raise administrative burdens and could increase prices or limit scale.
Providing tax-exemptions or special tax treatment for manufacturing/distribution could reduce federal tax revenue and shift fiscal burden to taxpayers if lower drug costs do not fully offset the revenue loss.
Based on analysis of 2 sections of legislative text.
Allows certain nonprofit manufacturers or distributors of drugs and medical devices to keep 501(c)(3) tax-exempt status if designated by Treasury (with HHS) and meeting conflict-of-interest rules.
Introduced December 3, 2025 by Jacklyn Sheryl Rosen · Last progress December 3, 2025
Creates a rule in the tax code allowing certain nonprofit organizations that make or distribute drugs or medical devices to retain 501(c)(3) tax-exempt status when those activities are consistent with their public-interest mission. It sets eligibility rules, conflict-of-interest limits, and a process for the Treasury (with HHS consultation) to designate qualifying organizations and eligible products. The change aims to let mission-driven organizations produce or distribute affordable drugs and devices—including items in shortage or priced high—without automatically losing tax-exempt status, while imposing governance and affiliation limits to reduce commercial conflicts.