# Plain Language Summary: Elijah E. Cummings Lower Drug Costs Now Act

This bill is designed to lower prescription drug prices in America through several major changes to how drugs are priced and sold. The core idea is that the federal government will negotiate directly with drug manufacturers to get better prices, especially for expensive medications used by Medicare patients. Right now, the government is largely prohibited from negotiating drug prices—manufacturers set the prices and Medicare has to pay them. This bill changes that by allowing the government to sit down with drug companies and hammer out lower prices, similar to what other wealthy countries like Canada, Australia, and Germany already do.

The bill creates a "Fair Price Negotiation Program" that will identify the most expensive drugs and require manufacturers to negotiate prices with the government. If a drug company refuses to negotiate or won't accept a reasonable price, they face a steep tax penalty—up to 95% of the drug's sales revenue. The government will compare American prices to what the same drugs cost in other developed countries and use that as a benchmark for what's considered a "fair" price. This mainly affects Medicare patients initially, but the bill also extends similar protections to people with private insurance. Starting in 2024, the government will select at least 25 expensive drugs to negotiate on, growing to at least 50 drugs by 2025 and beyond.

The bill also protects Medicare patients from skyrocketing out-of-pocket costs. Currently, seniors can face unlimited costs for prescription drugs once they hit a certain threshold. This bill caps how much Medicare patients have to pay out of pocket each year for their medications, similar to the cap that already exists for other types of medical care. Additionally, if drug manufacturers raise prices faster than inflation, they'll have to pay rebates to Medicare and private insurance plans. This creates a financial incentive for companies to keep price increases reasonable. The bill also requires drug companies to be transparent about their pricing, so patients and policymakers can see why drugs cost what they do.

Finally, the bill invests billions of dollars in medical research through the National Institutes of Health, the Food and Drug Administration, and programs to combat the opioid epidemic. These investments are meant to ensure that while drug prices come down, companies still have incentives to develop new and innovative medications. The bill essentially tries to balance two goals: making existing drugs more affordable for patients right now, while still encouraging the development of new treatments for serious diseases in the future.

Elijah E. Cummings Lower Drug Costs Now Act

Pallone, Frank

Elijah E. Cummings Lower Drug Costs Now Act This bill establishes several programs and requirements relating to the prices of prescription drugs. In particular, the bill requires the Department of Health and Human Services (HHS) to negotiate prices for certain drugs (current law prohibits HHS from doing so). Specifically, HHS must negotiate maximum prices for single-source, brand-name drugs that lack certain generics and that are among either the 125 drugs that account for the greatest national spending or the 125 drugs that account for the greatest Medicare spending. HHS must negotiate the prices of at least 25 such drugs for 2024 and of at least 50 such drugs thereafter and must also negotiate prices for certain newly approved drugs and for insulin products. The negotiated prices must be offered under Medicare and may also be offered under private health insurance unless the insurer opts out. The negotiated maximum price may not exceed (1) 120% of the average price in Australia, Canada, France, Germany, Japan, and the United Kingdom; or (2) if such information is not available, 85% of the U.S. average manufacturer price. Drug manufacturers that fail to comply with the bill's negotiation requirements are subject to civil and tax penalties. The bill also makes a series of additional changes to Medicare prescription drug coverage and pricing, including by (1) requiring drug manufacturers to issue rebates to the Centers for Medicare &amp; Medicaid Services for covered drugs that cost $100 or more and for which the average manufacturer price increases faster than inflation, and (2) capping annual out-of-pocket spending under the Medicare prescription drug benefit. The bill also requires drug manufacturers to report specified information for certain high-cost drugs, and it provides funds for opioid epidemic initiatives and biomedical research.