This bill adds an exception to the Medicare drug price negotiation program for certain small biotech manufacturers that are "research and development-intensive." Starting with initial price applicability year 2029, a qualifying single source drug of a research and development-intensive small biotech manufacturer is not a "negotiation eligible drug."
The bill defines a "small biotech manufacturer" as a company that has five or fewer qualifying single source drugs and is not owned, controlled by, or organized under the laws of a covered foreign nation. A manufacturer is "research and development-intensive" if it invests at least an "applicable percent" of its net revenue, measured as the average of the previous three years and calculated under generally accepted accounting principles, in research and development. The applicable percent is: 30% for one qualifying drug, 40% for two, 50% for three, 60% for four, and 70% for five.
Manufacturers must apply annually to the Secretary to claim the exception. Applications must include net product revenue and research and development expenditures for the relevant period, a certification of accuracy, and any other information the Secretary requires. The Secretary must create a process for manufacturers to appeal determinations that they do not meet the definition; that appeal must conclude by the selected drug publication date for the applicable initial price year. If a manufacturer is acquired after 2029 by an entity that does not meet the definition, the acquired drug stops qualifying beginning the plan year after the acquisition.
No publicly available information in the bill text provides federal cost estimates, budgetary effects, or projected changes in Medicare spending or drug prices. The bill does require application filings by manufacturers and the Secretary to develop an appeal process, which imply administrative actions but do not include cost details.
The bill text does not include proponents' arguments. Sponsors listed in the bill metadata include Representatives August Pfluger, David Kustoff, Claudia Tenney, Lateefah Simon, and Nathaniel Moran.
The bill text does not include opponents' arguments or stated objections. No publicly available information in the bill text describes opposing views.