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.
This bill creates an exemption from Medicare's drug price negotiation program for small biotech companies that heavily invest in research and development. Starting in 2029, small manufacturers with five or fewer drugs would be excluded from price negotiations if they spend a required percentage of their revenue on R&D—ranging from 30 percent for companies with one drug to 70 percent for those with five drugs. The exemption applies only to drugs made by these qualifying companies and would be lost if the company is acquired by a larger manufacturer that doesn't meet the definition. Companies seeking the exemption must annually submit information to the Department of Health and Human Services documenting their R&D spending and revenue, with a dispute resolution process available if the department denies their eligibility. The bill aims to incentivize innovation by smaller biotech firms while preserving Medicare's ability to negotiate prices for drugs from larger manufacturers.
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