End Price Gouging for Medications Act

The End Price Gouging for Medications Act would require the Secretary of Health and Human Services (HHS) to establish an annual reference price for every prescription drug for purposes of Federal health programs (like Medicare, Medicaid, CHIP, TRICARE, Veterans Affairs, Federal Employees Health Benefits, and certain Indian Health Service programs). For Federal programs, the drug’s retail list price would not be allowed to exceed this reference price. The reference price would be set either by using the lowest available retail list price among a specified set of reference countries (if pricing data is available for at least 3 of them) or, if data are insufficient, by considering factors such as therapeutic effect, drug value, patient access, and research and development costs. The Act would require drug manufacturers to offer the reference price to all purchasers, including the uninsured and those with private insurance, with the insured’s obligation limited to the sum of coverage plus cost-sharing not exceeding the reference price. Violations would incur civil penalties paid to NIH for drug research and development, and the penalties would be calculated as five times the difference between what the manufacturer earned under Federal programs and what they would have earned had they complied. The reference price would apply to both brand-name and generic drugs approved under the FDA or Public Health Service Act.