# Plain Language Summary: End Price Gouging for Medications Act

This bill would cap prescription drug prices for people covered by major government health programs. The government would set a maximum price—called a "reference price"—that drug companies can charge for medications used by Medicare patients, Medicaid recipients, veterans, military families, federal employees, Native Americans through Indian Health Services, and children in the CHIP program. Drug manufacturers would be prohibited from charging more than this reference price to anyone in these programs, no matter what they currently charge.

The reference prices would be based on what the same drugs cost in other wealthy countries like Canada, the United Kingdom, Germany, France, Japan, Australia, and several others. Each year, the government would look at what these countries pay for a drug and use the median (middle) price as the U.S. reference price. If pricing information isn't available from at least three other countries, the government would set a price based on factors like how effective the drug is, its value to patients, and research and development costs. The bill also requires drug companies to offer these same reference prices to uninsured people and those with private insurance.

If a drug manufacturer charges more than the reference price, they face significant financial penalties—specifically, they'd owe five times the difference between what they actually charged and what they should have charged under the law. The money collected from these penalties would go to the National Institutes of Health to fund drug research. This approach aims to bring U.S. drug prices closer to what other developed nations pay, potentially making medications more affordable for millions of Americans covered by government health programs.

End Price Gouging for Medications Act

Welch, Peter

End Price Gouging for Medications Act This bill requires the Department of Health and Human Services (HHS) to set maximum prices for prescription drugs under specified federal health programs. Specifically, HHS must establish reference prices based on certain factors, including drug prices in listed countries. Retail prices of covered drugs under specified federal health programs (e.g., Medicare and Medicaid) may not exceed the established reference prices. Drugs must also be available at such prices to uninsured individuals and to individuals with private health insurance.