This bill requires the Secretary of Health and Human Services to establish annual "reference prices" for prescription drugs based on the lowest prices charged in twelve comparable countries—including Canada, Australia, and most Western European nations. These reference prices would cap what drug manufacturers can charge for medications under major federal health programs, including Medicare, Medicaid, the Veterans Health Administration, and TRICARE. The bill applies to all prescription drugs, both brand name and generic, and would also require manufacturers to offer drugs at these reference prices to uninsured individuals and those with private insurance. Manufacturers that violate the price caps face civil penalties equal to five times the difference between what they actually charged and what they would have received at the reference price; penalties would be collected and directed to the National Institutes of Health for drug research. The bill affects millions of Americans covered by federal health programs and aims to address what sponsors describe as price gouging on medications.
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