Old Drugs, New Cures Act
Old Drugs, New Cures Act would amend the Social Security Act to create a new category called “priority research drugs” and to exclude these drugs from certain rebates calculations under Medicare and Medicaid. The goal is to encourage development of new uses for older medicines that address significant unmet needs, while changing how rebates are calculated for these drugs. The bill sets up a formal, time-bound process for manufacturers to obtain designation as a priority research drug, based on explicit criteria (age since initial approval, pursuit of a meaningful new indication, and high use among federal health program beneficiaries). Once designated, priority research drugs would be treated differently in key rebate and price rules, specifically excluding them from the current “line extension” considerations under Medicaid and Medicare rebate calculations and related best-price rules. The bill’s designation process requires action within specific timeframes and uses concrete eligibility tests tied to public program utilization and the absence of alternatives. If a drug meets the criteria and receives designation, it would be exempt from certain calculations that otherwise affect rebates and prices in federal programs. The changes would be applied through amendments to multiple sections of the Social Security Act, affecting how line extensions are defined for Medicaid and Medicare and how the Best Price rule applies to selected drugs. Introduced in the House on April 1, 2025 by Rep. Davis (NC) with Rep. Pfluger, the bill was referred to the Committee on Energy and Commerce and, in parallel, the Committee on Ways and Means.
Key Points
- 1Creates a new designation category: priority research drug, with a formal process to request and obtain designation.
- 2Designation timelines: a process must be established within 90 days after enactment; designation must occur within 60 days after the request is received, if criteria are met.
- 3Eligibility criteria (must be met to receive designation):
- 4- At least 10 years have elapsed since the drug was approved (under FDA’s FDC Act or the PHS Act) as of the submission date.
- 5- The manufacturer is pursuing a new indication for the drug that would address a significant unmet medical need because there is no existing approved or licensed therapy for that indication on the submission date.
- 6- The new indication targets a disease or condition with high prevalence among federal health program beneficiaries (defined as at least 33% of claims in the targeted population paid by specified programs: Medicaid/CHIP, Medicare Part D subsidies, 340B, or Department of Veterans Affairs programs).
- 7Effect on rebates and pricing: priority research drugs would be excluded from being treated as line extensions for purposes of calculating manufacturer rebates under Medicare and Medicaid.
- 8Specific statutory amendments:
- 9- Exclusion from Medicaid line-extension calculations.
- 10- Exclusion from Medicaid Best Price special rule for selected drugs (if designated).
- 11- Exclusion from Medicare line-extension calculations.
- 12Scope: Changes are codified in several sections of the Social Security Act to ensure consistent treatment across Medicaid, Medicare, and related price/best-price rules.