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 annual reference prices for every prescription drug and to ensure that the retail list price paid for drugs by enrollees in federal health programs does not exceed that reference price. If a manufacturer does not comply, they could face civil penalties, and the government would divert penalty proceeds to the National Institutes of Health (NIH) to fund drug research and development. The reference price would be determined either by the lowest price among a set of international reference countries (if pricing data exists for at least three of them) or, if data are incomplete, through a multi-factor assessment (therapeutic value, overall drug value, patient access, R&D costs, and other factors). The policy would apply to both brand and generic drugs and would require manufacturers to offer the reference price to all purchasers, including the uninsured and those with group plans, with coverage plus cost-sharing not exceeding the reference price.
Key Points
- 1Establish annual reference prices for every prescription drug, to be used as the price cap for retail costs in federal health programs.
- 2Method for setting reference price: (A) use the lowest retail list price among designated reference countries (if pricing data is available for at least 3 countries) or (B) use a multi-factor assessment (therapeutic effect, value, patient access, R&D costs, and other factors) if data are insufficient.
- 3Reference countries include: Australia, Austria, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, and the United Kingdom.
- 4Federal health programs affected: Medicare, Medicaid, CHIP, TRICARE, VA hospital care/services, Federal Employees Health Benefits Program, and Indian Health Care Improvement Act-related programs.
- 5Manufacturers must offer drugs at the reference price to all purchasers, including uninsured individuals and those with group or individual health insurance, with plan coverage plus cost-sharing not exceeding the reference price. Noncompliance triggers civil penalties, and penalties collected are redirected to NIH for drug research and development.