Prescription Drug Price Relief Act of 2025
- Bill Number
- S. 1818
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-05-20: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2026-01-21T06:37:58Z
AI-Generated Summary
Purpose
The Prescription Drug Price Relief Act of 2025 aims to reduce prescription drug prices in the United States by identifying brand name drugs sold at excessively high prices compared to international benchmarks and ending certain government protections that allow manufacturers to maintain monopolies on those drugs. This encourages competition from generic and biosimilar versions to make medications more affordable.
Key Provisions
- Identification of Excessively Priced Drugs (Section 2): The Secretary of Health and Human Services (HHS) must review all brand name drugs at least once a year, starting 30 days after enactment. A drug is deemed excessively priced if its average U.S. manufacturing price exceeds the median price in at least three of five reference countries (Canada, United Kingdom, Germany, France, Japan). For drugs not meeting this criterion or lacking data, the Secretary considers additional factors, including:
- Size of the patient population affected.
- Drug's value to patients (e.g., health benefits versus price and access).
- Federal subsidies or investments in the drug.
- Development costs and global revenues.
- Improvements in health outcomes compared to existing treatments.
- Price increases exceeding inflation (measured by the Consumer Price Index).
- Other relevant factors.
Anyone can petition the Secretary for a review (limited to once per year per drug), with decisions required within 90 days and made publicly available.
- Ending Monopolies for Excessively Priced Drugs (Section 3): For drugs with excessive prices, the Secretary must immediately waive or void government-granted exclusivities (e.g., patent extensions or market protections that delay generic competition). The Secretary grants open, non-exclusive licenses to any entity to produce, sell, or import the drug, including using the original drug's safety and efficacy data. Generic or biosimilar applications referencing these drugs receive expedited FDA review (within 8 months). If the original manufacturer raises prices after a determination, the Secretary can sue for damages equal to the revenue from those increases.
- Licensing Terms (Section 4): License holders pay a "reasonable royalty" to the original patent holder or manufacturer, calculated as:
- A percentage of sales (no higher than the average from IRS data on pharmaceutical tax returns), or
- An amount set by the Secretary based on factors like patient value, population size, federal investments, health improvements, and recovered development costs.
Royalties must ensure the drug sells at affordable prices below the excessive U.S. price. If multiple patent holders exist, royalties are divided fairly. Licensees must sell below the determined excessive price.
- Public Database and Reporting (Section 5): HHS must create and maintain an online database tracking brand name drugs, excessive price determinations, petitions, licenses granted, and application approvals. The Secretary submits annual reports to Congress summarizing reviews, determinations, licenses, approvals, and manufacturer compliance. All information is publicly accessible on the FDA website.
- Manufacturer Reporting Requirements (Section 6): Drug manufacturers must submit annual reports (due January 15) detailing U.S. and reference-country prices, global revenues, R&D and marketing expenditures (broken down by category), patient population size, federal subsidies, and pricing methodologies. Non-compliance or false reporting incurs civil penalties (0.5% to 1% of the drug's prior-year gross revenues per day of delay), with funds supporting NIH research grants.
- Prohibition on Anticompetitive Behavior (Section 7): Manufacturers cannot engage in actions violating antitrust laws (under the Federal Trade Commission Act) that hinder licensing or affordable drug access.
- Definitions (Section 8): Key terms include "average manufacturer price" (U.S. wholesale cost or equivalent abroad), "brand name drug" (patented, FDA-approved drugs), "government-granted exclusivity" (legal protections delaying competition), "open, non-exclusive license" (broad permission to produce and sell), and others aligned with existing FDA and patent laws.
Significant Changes to Existing Law
- Introduces mandatory annual price reviews tied to international comparisons, a new mechanism not in current U.S. law, which relies on market forces and limited negotiations (e.g., under the Inflation Reduction Act).
- Authorizes compulsory licensing and waiver of patent exclusivities for high-priced drugs, overriding parts of the Hatch-Waxman Act and Biologics Price Competition and Innovation Act that protect innovator drugs from competition.
- Imposes detailed reporting on manufacturers and penalties, expanding beyond existing transparency rules under the Affordable Care Act.
- Enables expedited generic/biosimilar approvals and civil lawsuits for post-determination price hikes, altering FDA processes and enforcement tools.
Potential Impacts
- On Patients and Citizens: Could significantly lower costs for brand name drugs by increasing generic and biosimilar availability, improving access for millions, especially those with chronic conditions, and reducing out-of-pocket expenses and insurance premiums.
- On Government Agencies: HHS and FDA gain new responsibilities for reviews, licensing, database management, and litigation, potentially straining resources but enabling better oversight of drug pricing. Penalties fund NIH research, indirectly supporting public health.
- On Drug Manufacturers: Brand name companies may face revenue losses from lost monopolies and royalties, discouraging aggressive pricing but pressuring them to align U.S. prices with global norms. Generic/biosimilar makers benefit from easier market entry.
- On International Relations: Relies on pricing data from five allied countries, which could strain data-sharing agreements or prompt reciprocal actions, but promotes global equity in drug access without direct trade sanctions.
Main Stakeholders Affected
- Patients and Consumers: Primary beneficiaries through lower prices and better access.
- Drug Manufacturers: Brand name firms (e.g., Pfizer, Merck) face risks of lost exclusivity; generic/biosimilar producers (e.g., Teva, Mylan) gain opportunities for competition.
- Healthcare Payers: Insurers, Medicare/Medicaid, and employers could see reduced costs from cheaper drugs.
- Government Entities: HHS, FDA, and Congress handle implementation, enforcement, and reporting; NIH receives penalty funds.
- Advocacy Groups: Patient organizations and consumer advocates support affordability; pharmaceutical industry lobbies may oppose innovation disincentives.
Notable Legal, Constitutional, or Political Implications
- Legal: The compulsory licensing and exclusivity waivers could face challenges under patent law (e.g., as government interference with private property) or the Administrative Procedure Act (due to rulemaking on "excessive" prices). Civil penalties and lawsuits expand HHS enforcement powers, potentially overlapping with FTC antitrust roles.
- Constitutional: Possible claims of "takings" under the Fifth Amendment if waivers devalue patents without just compensation, though royalties mitigate this. The bill's reliance on international data raises questions about sovereignty in domestic regulation.
- Political: As a Senate-introduced bill by progressive Democrats, it signals bipartisan tension on drug pricing (building on prior reforms like the 2022 Inflation Reduction Act). Passage could reshape pharma lobbying but risks industry backlash, including claims of reduced U.S. innovation leadership. If enacted, it sets a precedent for using global benchmarks in U.S. policy, influencing future healthcare debates.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (7)
Sen. Blumenthal, Richard [D-CT], Sen. Booker, Cory A. [D-NJ], Sen. Merkley, Jeff [D-OR], Sen. Murphy, Christopher [D-CT], Sen. Welch, Peter [D-VT], Sen. Warren, Elizabeth [D-MA], Sen. Whitehouse, Sheldon [D-RI]
Recent Actions
- 2025-05-20: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2025-05-20: Introduced in Senate
Bill Versions
- Prescription Drug Price Relief Act of 2025 — issued 2025-05-20 — PDF (20 pages)