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H.R. 3: Elijah E. Cummings Lower Drug Costs Now Act

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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Apr 22, 2021.

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 & 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.