S-5571-119
Read twice and referred to the Committee on Finance.
Sponsored by Marsha Blackburn (R-TN)
What it does
The bill would amend the Medicare Drug Price Negotiation Program so that the Secretary of HHS would apply an automatic delay of up to 2 years (up from 1 year) in selecting a biologic drug for negotiation when its biosimilar is expected to be marketed within 2 years of the selection date. The automatic delay would turn on public signs such as an FDA application accepted for review or approved, or ongoing or completed clinical studies. Manufacturers could still request a delay, which would require clear and convincing evidence of likely marketing. If the biosimilar is not licensed and marketed during the delay, the biologic would be selected, and its manufacturer would owe rebates for the delayed years. Pending patent litigation would not block a delay. The changes would apply starting with initial price applicability year 2026, and other limits apply.
Who benefits
Biosimilar manufacturers, whose products could reach Medicare patients without competing against a negotiated price on the reference biologic. Medicare Part B and Part D patients who might gain access to lower-cost biosimilars if competition develops. The Medicare program and taxpayers, to the extent biosimilar competition lowers spending or delay rebates are collected. Reference biologic manufacturers that gain a predictable, longer delay window.
Who is hurt
Medicare and its beneficiaries could lose or postpone negotiated prices on selected biologics for up to 2 additional years if the expected biosimilar entry is slow or does not occur. Manufacturers of reference biologics would owe rebates if the biosimilar is not marketed in time. HHS and CMS would take on added determinations and verification work. Manufacturers whose biosimilars are delayed by patent litigation or manufacturing problems could see their reference products trigger rebates or selection. Beneficiaries relying on a biologic whose competitor does not arrive may wait longer for negotiated prices.
Supporters argue
Supporters argue the change would let biosimilar competition, rather than government-set prices, lower costs where a rival product is close to launch. They contend that a 2-year window, sworn manufacturer confirmations, and rebates for missed launches would protect Medicare against gaming while avoiding price-setting that could discourage biosimilar investment.
Opponents argue
Opponents argue the change would delay negotiated prices on high-cost biologics for up to 2 more years based on expected launches that may not happen. They contend that automatic delays based on press releases or filings could be gamed, and that patent disputes could keep biosimilars off the market, leaving Medicare to pay higher prices.
Constitutional context
Congress structures Medicare and drug-pricing rules under its Taxing and Spending Clause power (Art. I, §8, cl. 1) and the Necessary and Proper Clause. The bill raises no distinct constitutional question beyond that authority, though manufacturers' due-process or takings challenges to rebate obligations could arise, as such challenges have been brought against the negotiation program itself.
Checks and balances
The bill would shift discretion toward the HHS Secretary, who would make determinations about likely biosimilar marketing, subject to statutory standards, manufacturer sworn confirmations, and judicial review of final agency action. Congress retains oversight through the Finance Committee and later amendments.
Historical precedent
The Inflation Reduction Act of 2022 created the Medicare negotiation program and its one-year biosimilar delay provision, which this bill would amend.