End Price Gouging for Medications Act
The bill's enactment is expected to significantly affect drug pricing in the U.S., particularly for Medicare and Medicaid enrollees, ensuring that the retail list price for drugs does not exceed the established reference price. This shift could potentially lower costs for millions of Americans, making essential medications more affordable and accessible. Additionally, the legislation will also affect individuals without insurance and those covered under various health plans, promoting a more extensive application of cost control measures in drug pricing.
SB2044, known as the End Price Gouging for Medications Act, mandates the Secretary of Health and Human Services to establish annual reference prices for prescription drugs covered by federal health programs. The intent behind this legislation is to regulate drug prices in a manner that prevents manufacturers from charging excess amounts, thereby addressing concerns over medication affordability for consumers under programs like Medicare and Medicaid. The annual reference price will be set based on the lowest retail price from selected reference countries and other factors determined by the Secretary.
Despite the benefits proposed, the bill is not without controversy. Critics, including some drug manufacturers and industry stakeholders, argue that government-imposed price controls could stifle innovation and discourage investment in drug development. They contend that such measures could lead to fewer new drugs entering the market and might adversely affect research funding, as companies may derive less revenue from their existing medications. Proponents counter these claims by emphasizing the need to balance cost control with the necessity of affordable medications for public health.