Affordable Pricing for Taxpayer Drugs

Summary#

This bill would require federal agencies that give or receive research funding to include a "reasonable pricing" requirement for any biomedical product or service developed with that funding. The requirement would apply in grants, contracts, cooperative agreements, and in licenses of patents or regulatory test data. The Secretary of Health and Human Services (the Secretary) would decide what is "reasonable," unless the Secretary grants a waiver.

The bill would bar charging U.S. residents more than a reference price based on the median price in Canada and six other high-income countries (the six reference countries). The Secretary could adjust that reference by regulation after public notice and comment. The Secretary may also write additional rules to implement reasonable pricing standards and may use tools such as lowering prices or shortening exclusivity if revenues exceed targets, or lowering prices based on cost per health benefit or access burdens.

The Secretary could waive the pricing requirement in the public interest but must give public notice, hold a hearing, accept written comments, and publish an economic analysis before the waiver takes effect. Companies commercializing covered products must report clinical trial costs, federal subsidies for those costs, and annual product revenues by county to the Secretary. The Secretary must make those reports public. The bill defines "biomedical product or service" to include drugs, vaccines, devices, diagnostics, assistive technology, cell- and gene-based therapies, and other health technologies.

What it means for you#

• If you are a company that receives federal support for biomedical research, you would need to agree to reasonable pricing terms set by the Secretary when you accept that support or when you license related patents or regulatory data.
• If you sell biomedical products developed with federal research, you would have to provide cost and revenue reports to the Secretary and follow pricing limits tied to prices in Canada and six other high-income countries unless the Secretary grants a waiver.
• If you are a patient or a buyer of covered products, the bill’s rules aim to limit how much companies can charge U.S. residents for products developed with federal research funding and to increase public reporting about costs and revenues.
• Federal agencies that fund research would be required to include these pricing terms in their funding agreements and licenses.

Expenses#

No publicly available information on the bill’s estimated costs, budget effects, or savings.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.