H.R. 3391: End Price Gouging for Medications Act

This bill, titled the "End Price Gouging for Medications Act," is aimed at regulating the prices of prescription drugs to prevent excessive pricing, particularly for federal health programs. The main points of the bill are as follows:

Reference Prices for Prescription Drugs

The Secretary of Health and Human Services (HHS) will be responsible for setting annual reference prices for each prescription drug. The retail list price for a drug cannot exceed the established reference price for individuals enrolled in specific federal health programs.

How Reference Prices Will Be Determined

Reference prices will be determined annually using the following criteria:

• If pricing information 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 reference price will be the lowest retail list price among these countries.
• If comparative pricing information is not available from at least three reference countries, the Secretary will consider various factors to establish an appropriate price, including:
  • the added therapeutic effect of the drug;
  • the overall value of the drug;
  • accessibility for patients;
  • research and development costs; and
  • other relevant factors as determined by the Secretary.

Applicable Federal Health Programs

The reference prices will apply to covered outpatient and inpatient drugs under the following federal health programs:

• Medicare
• State Medicaid plans
• State Children's Health Insurance Program (CHIP)
• TRICARE (military health program)
• Department of Veterans Affairs medical services
• Federal Employees Health Benefits Program
• Indian Health Care Improvement Act services

Application to Other Drug Purchasers

Drug manufacturers will also be required to offer drugs at the reference price to all individuals, regardless of insurance. For individuals with group health plans, the total amount paid (including any cost-sharing) must not exceed the reference price. This provision ensures that even uninsured individuals get access to the lower reference price.

Enforcement Mechanism

To ensure compliance, drug manufacturers that fail to adhere to the price requirements will face a civil penalty. This penalty will be calculated based on the difference between what the manufacturer received for drug sales under federal health programs and what they would have received if they had complied with the reference price.

Penalties collected will be directed to the National Institutes of Health (NIH) for drug research and development purposes.

Applicability to Brand and Generic Drugs

The reference pricing will apply to both brand-name and generic drugs that are approved under relevant federal laws related to drug approval.

Relevant Companies

None found.