Most Favored Patient Act of 2026

Bill Number

H.R. 7837

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Health

Status

Introduced

Latest Action

2026-03-05: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, 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.

Last Updated

2026-03-10T12:05:31Z

AI-Generated Summary

Purpose

The "Most Favored Patient Act of 2026" (H.R. 7837) aims to lower prescription drug costs for certain Medicare and Medicaid beneficiaries by requiring the Center for Medicare and Medicaid Innovation (CMMI)—a part of the Centers for Medicare & Medicaid Services (CMS)—to test a new payment model. This model ties U.S. drug prices to lower international prices from select countries, using a "most-favored-nation" approach, which means the U.S. would pay no more than the second-lowest price available in those countries.

Key Provisions

• Mandatory Model Testing: Starting January 1, 2029, CMMI must implement the "Most Favored Nations Pricing Model" for five years. Under this model, drug manufacturers without special agreements must offer their drugs at the most-favored-nation price to eligible patients and report pricing data to the Secretary of Health and Human Services (HHS).
• Pricing Mechanism: The most-favored-nation price for a drug is the second-lowest "applicable net price" (average price paid after rebates and discounts, adjusted for purchasing power differences) from eight reference countries: Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the United Kingdom. This applies only to "covered drugs" (outpatient drugs, Medicare Part B drugs like those administered in clinics, or Part D drugs) sold in at least two reference countries.
• Eligible Recipients: Pricing applies to:
• Medicaid patients getting drugs from pharmacies or mail-order services.
• Medicare Part D enrollees (prescription drug plans) or Medicare Advantage plans with drug coverage.
• Medicare Part B enrollees (including those in Medicare Advantage plans) receiving drugs from hospitals, doctors, or other providers.
• Manufacturer Requirements: Affected manufacturers must provide these lower prices to pharmacies, providers, and patients, and submit data for price calculations.
• Exceptions and Alternatives:
• The Secretary can delay requirements until April 1, 2029, for a drug if the manufacturer is likely to sign a "covered agreement" (a voluntary deal committing to the same pricing, data reporting, and increased U.S. manufacturing by December 31, 2028).
• Agreements must be reported to Congress by April 1, 2029, or within 30 days if signed earlier.
• Scope: Applies to "specified manufacturers" (those without covered agreements) for drugs meeting the criteria.

Significant Changes to Existing Law

• Amends Section 1115A of the Social Security Act, which authorizes CMMI to test innovative payment and service models to reduce costs and improve care. This bill mandates a specific model (previously voluntary or untested in this form), shifting from flexible experimentation to required implementation of international price benchmarking.
• Introduces new definitions and requirements for drug pricing tied to foreign markets, which were not part of prior law. It builds on but differs from past efforts (like a 2020 executive order on most-favored-nation pricing that was never fully implemented) by embedding it statutorily and adding incentives for domestic manufacturing.
• No changes to overall drug approval or coverage rules, but it creates a pathway for voluntary opt-outs via manufacturing commitments.

Potential Impacts

• On Government Agencies: CMS and CMMI would handle model design, data collection, enforcement, and reporting to Congress, potentially reducing federal spending on Medicare Parts B and D, and Medicaid by billions if lower prices are achieved. Administrative costs could rise initially for implementation and monitoring.
• On Citizens: Eligible Medicare and Medicaid beneficiaries (millions of older adults, low-income individuals, and those with disabilities) could see reduced out-of-pocket costs for covered drugs dispensed at pharmacies or administered by providers, improving access to affordable medications. Non-eligible individuals (e.g., those without Medicare/Medicaid) would not directly benefit.
• On International Relations: Referencing prices from other countries might complicate U.S. trade or diplomatic ties, as those nations could view it as interference in their pricing negotiations with drug companies. It could pressure global pharma markets but has no direct enforcement abroad.

Main Stakeholders Affected

• Drug Manufacturers: Specified manufacturers (those without agreements) face mandatory price reductions and reporting; all could be incentivized to boost U.S. production to avoid requirements.
• Patients and Beneficiaries: Medicare Part B/D and Medicaid enrollees eligible for covered drugs, who gain from lower prices.
• Healthcare Providers and Dispensers: Pharmacies, hospitals, doctors, and mail-order services must handle adjusted pricing and billing for eligible patients.
• Government Entities: HHS/CMS for administration; congressional committees (Energy and Commerce, Ways and Means, Finance, Health, Education, Labor, and Pensions) for oversight and reporting.
• Broader Industry: Pharmaceutical trade groups may oppose due to revenue impacts; patient advocacy organizations could support for cost savings.

Notable Legal, Constitutional, or Political Implications

• Legal: The model relies on CMMI's broad authority to test innovations, but could face lawsuits from manufacturers challenging the pricing formula's feasibility, data accuracy, or international sourcing as arbitrary or burdensome. Enforcement might require new regulations, with potential appeals under the Administrative Procedure Act.
• Constitutional: Falls within Congress's power to regulate interstate commerce and spending (via Medicare/Medicaid), but tying prices to foreign markets could raise questions under treaties or foreign affairs powers; no direct constitutional conflicts noted.
• Political: Addresses public concerns over high U.S. drug prices by leveraging international benchmarks, potentially appealing to cost-conscious voters. However, it may spark debate over innovation incentives (e.g., reduced R&D if profits drop) and U.S. manufacturing boosts, influencing future healthcare reform amid partisan divides on pharma regulation.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Meuser, Daniel [R-PA-9]

Recent Actions

• 2026-03-05: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, 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.
• 2026-03-05: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, 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.
• 2026-03-05: Introduced in House
• 2026-03-05: Introduced in House

Bill Versions

• Most Favored Patient Act of 2026 — issued 2026-03-05 — PDF (8 pages)