Sens. Josh Hawley and Peter Welch are teaming up on bipartisan legislation aimed at lowering drug costs by barring drug companies in the U.S. from charging higher prices than the international average.
While their bill is different from what the Trump administration is proposing to help finance the GOP’s megabill of tax cuts and extensions, border security investments and more, it underscores the cross-party and populist interest in cracking down on pharmaceutical companies. The White House is pushing a proposal to reduce spending in Medicaid by aligning what the safety net program pays for drugs with the lower prices paid abroad.
In a statement shared first with POLITICO, Hawley, a Missouri Republican, tied the bipartisan legislation to President Donald Trump’s efforts during his first term to link drug prices in the United States to those in other high-income nations.
“This bipartisan legislation would continue that work to end a drug market that favors Big Pharma, make prescriptions affordable again, and empower Americans to get the care they need,” Hawley said.
Where congressional Republicans ultimately end up on drug pricing as part of their yet-to-be-finalized policy package remains to be seen. While the White House is pushing what it is calling a “most favored nation” plan, Speaker Mike Johnson poured cold water on the idea during an interview last week.
Hawley, meanwhile, is a key vote to watch on the Republicans’ sweeping party-line bill — and as part of the Senate’s debate on that measure, lawmakers will be able to offer unlimited amendments on nearly any proposal. He said that “if Republicans want to save money on health care costs in reconciliation, this is where to start.”
In addition to prohibiting pharmaceutical companies from selling drugs within the United States at a higher price than the international average, it also would impose a penalty if companies violate the prohibition.
“Big Pharma’s price gouging has made that a reality for many Americans, forcing them to pay four or five times more for the same lifesaving medications as folks in other countries — it’s unacceptable,” said Welch, a Vermont Democrat.
The legislation would go after the list price of drugs, but most Americans don’t pay the list price when getting prescriptions filled. That’s because health insurers and pharmacy benefit managers are able to negotiate lower costs.
The pharmaceutical industry is expected to fiercely oppose such a move, having previously argued that so-called international reference pricing and other similar “government price controls” would lead to significant barriers to accessing treatments for patients, including longer wait times for medications.
The Congressional Budget Office found last year that an international reference pricing policy based on prices in several other high income countries, including Canada, France and the United Kingdom, would reduce average drug prices in 2031 by more than 5 percent.
