End Price Gouging for Medications Act
- Bill Number
- H.R. 3391
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-07-02: Referred to the Subcommittee on Health.
- Last Updated
- 2025-12-12T09:07:49Z
AI-Generated Summary
Purpose
The "End Price Gouging for Medications Act" (H.R. 3391) aims to lower prescription drug costs by requiring the Secretary of Health and Human Services (HHS) to set annual "reference prices" for all prescription drugs. These prices cap what drug manufacturers can charge in federal health programs and extend to other buyers, using international pricing as a benchmark to prevent excessive pricing (often called "price gouging").
Key Provisions
- Establishment of Reference Prices: HHS must annually determine a reference price for each prescription drug.
- If pricing data is available from at least three "reference countries" (Australia, Austria, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, and the United Kingdom), the price is set at the lowest retail list price among those countries.
- If data is insufficient, HHS sets an "appropriate price" based on factors like the drug's therapeutic benefits (added health effects), overall value, patient access, research and development costs, and other relevant considerations.
- Application to Federal Health Programs: The reference price becomes the maximum retail list price for covered drugs in these programs:
- Medicare (hospital and outpatient care).
- Medicaid (state-funded health coverage for low-income individuals).
- Children's Health Insurance Program (CHIP).
- TRICARE (military health benefits).
- Veterans Affairs (VA) health services.
- Federal Employees Health Benefits Program (FEHB).
- Indian Health Care Improvement Act programs (health services for Native American communities).
- Extension to Other Buyers: Drug manufacturers must offer drugs at or below the reference price to all individuals, including the uninsured. For those with private insurance (group or individual plans), the total cost (insurance coverage plus out-of-pocket payments) cannot exceed the reference price.
- Enforcement and Penalties: Non-compliant manufacturers face civil penalties equal to five times the revenue difference between what they charged and what they would have charged at the reference price, calculated per drug and per year. Collected penalties are transferred to the National Institutes of Health (NIH) to fund drug research and development.
- Scope: Applies to both brand-name drugs (new, patented medications) and generic drugs (lower-cost versions after patents expire), as approved by the Food and Drug Administration (FDA).
Significant Changes to Existing Law
- Introduces mandatory price caps that override other laws, forcing retail prices in federal programs to align with international benchmarks—previously, U.S. drug prices were not directly tied to foreign pricing.
- Requires manufacturers to extend these caps beyond federal programs to private buyers and the uninsured, a new federal mandate on pricing for non-government sales.
- Redirects enforcement penalties to NIH research, creating a novel funding mechanism from drug pricing violations rather than general appropriations.
Potential Impacts
- On Government Agencies: HHS gains new authority to monitor and set drug prices annually, increasing administrative workload. Federal health programs like Medicare and Medicaid could save billions in drug spending, potentially reducing program costs and taxpayer burdens. NIH receives additional funding for research, boosting innovation in drug development.
- On Citizens: Patients in federal programs and the uninsured benefit from lower or capped drug costs, improving access to medications and reducing out-of-pocket expenses. Privately insured individuals may see indirect savings if total costs are limited, though insurers and employers could face negotiation pressures with manufacturers.
- On International Relations: Relies on pricing data from 12 allied countries, which might strain diplomatic ties if those nations view U.S. policy as pressuring their own pricing systems. No direct impact on trade, but it could influence global pharmaceutical markets by signaling U.S. resistance to high prices.
Main Stakeholders Affected
- Drug Manufacturers: Face revenue losses from price caps and penalties for non-compliance; must adjust global pricing strategies.
- Patients and Beneficiaries: Include enrollees in federal programs (e.g., seniors on Medicare, low-income families on Medicaid, veterans, military personnel, federal employees, and Native Americans), the uninsured, and privately insured individuals who gain from affordable drugs.
- Government Entities: HHS (price-setting role), NIH (receives penalty funds), and agencies administering health programs (e.g., Centers for Medicare & Medicaid Services, VA, Department of Defense for TRICARE).
- Healthcare Providers and Insurers: Hospitals, pharmacies, and private insurers may see reduced drug costs but could need to adapt billing and negotiation processes.
- Reference Countries: Indirectly affected as their pricing data informs U.S. caps, potentially influencing international drug affordability discussions.
Notable Legal, Constitutional, or Political Implications
- Legal: The bill's price controls could face challenges under the Fifth Amendment (takings clause, if seen as seizing manufacturer profits without compensation) or antitrust laws (if viewed as government interference in private markets). It explicitly overrides other laws, which might lead to court battles over federal authority in drug pricing.
- Constitutional: Raises questions about federal power to regulate private sales (extending to non-federal buyers), potentially testing Commerce Clause limits on interstate commerce regulation.
- Political: Likely to spark debate between supporters (advocating for affordable healthcare) and opponents (pharma industry arguing it discourages innovation). As a bipartisan issue on drug costs, it could influence election-year healthcare reforms, but enforcement details may require further congressional funding or rules.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2025-07-02: Referred to the Subcommittee on Health.
- 2025-05-14: Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Armed Services, Veterans' Affairs, Oversight and Government Reform, and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-05-14: Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Armed Services, Veterans' Affairs, Oversight and Government Reform, and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-05-14: Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Armed Services, Veterans' Affairs, Oversight and Government Reform, and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-05-14: Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Armed Services, Veterans' Affairs, Oversight and Government Reform, and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-05-14: Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Armed Services, Veterans' Affairs, Oversight and Government Reform, and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-05-14: Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Armed Services, Veterans' Affairs, Oversight and Government Reform, and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-05-14: Introduced in House
- 2025-05-14: Introduced in House
Bill Versions
- End Price Gouging for Medications Act — issued 2025-05-14 — PDF (6 pages)