HR-10628-119
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.
Sponsored by Nicholas Langworthy (R-NY)
What it does
The bill would amend the Medicare Drug Price Negotiation Program so the Secretary of Health and Human Services would have to automatically delay selection of a biologic drug for negotiation when a biosimilar is expected to be marketed within 2 years of the selected-drug publication date. The Secretary would make that finding based on FDA review or clinical-study status and on a manufacturer's written confirmation under penalty of perjury, and patent litigation would not block a delay. The delay would grow from 1 year to 2 years, and a biologic would be selected after the delay if no biosimilar has been licensed and marketed. If the biosimilar is not marketed in time, the brand manufacturer would owe a rebate for the delay years. The bill would also make other changes to the negotiation timeline and would apply starting with initial price applicability year 2027.
Who benefits
Manufacturers of biosimilars, which may gain a longer window to launch before the reference product faces a negotiated price. Patients and payers who may gain from earlier or broader biosimilar competition if the delay encourages launches. Brand biologic makers, which could see their products delayed from negotiation by up to 2 years. Medicare may receive rebates in cases where an expected biosimilar does not launch.
Who is hurt
Medicare, which could pay negotiated-price savings later on biologics that get delayed, and its beneficiaries who might pay higher coinsurance during the delay. Brand biologic manufacturers whose expected biosimilar does not launch, because they would owe rebates for the delay years. Biosimilar makers, who would need to confirm launch timing under penalty of perjury. HHS and CMS, which would take on added determinations and verification work. Taxpayers, if delayed negotiation reduces federal savings.
Supporters argue
Supporters argue the bill would protect the incentive to develop biosimilars by ensuring that a negotiated price on the brand product does not undercut a competitor about to launch. They contend that an automatic delay, a sworn written confirmation from the manufacturer, and a rebate if no launch occurs would give a predictable, enforceable process. They also argue that the bill's bipartisan sponsorship shows broad support for balancing price negotiation with market competition.
Opponents argue
Opponents argue the bill would postpone negotiated prices on high-spending biologics by up to 2 years, which could cost Medicare and beneficiaries savings the negotiation program is designed to deliver. They contend that a launch expectation, even one confirmed under penalty of perjury, can be wrong or strategic, and that a rebate may not fully offset the lost savings. They also argue that barring patent litigation from blocking a delay could shield brand products from negotiation.
Constitutional context
Congress acts under its Article I Taxing and Spending Clause authority over Medicare and its power to regulate drug markets under the Commerce Clause. Drug manufacturers have challenged the negotiation program itself on Takings, Due Process and compelled-speech grounds, but this bill only adjusts timing and delay rules and raises no distinct constitutional question.
Checks and balances
The bill would give the Secretary of HHS defined fact-finding duties on delay decisions, while Congress sets the standard (clear and convincing evidence) and courts may review agency determinations under the Administrative Procedure Act, subject to any statutory limits on review.
Historical precedent
The Inflation Reduction Act of 2022 created the Medicare Drug Price Negotiation Program and its original one-year biosimilar delay provision, which this bill would revise.