Old Drugs, New Cures Act Offers Drug Makers Pricing Breaks to Research New Uses for 10-Year-Old Medications

The “Old Drugs, New Cures Act” is trying to solve a big problem: how do you get pharmaceutical companies to invest in finding new uses for drugs that have been around forever? The answer, according to this bill, is a new designation called a “priority research drug,” and it comes with a major trade-off in how the government buys medicine.

The 10-Year Rule and the Unmet Need

This bill sets up a new category for older drugs—specifically, any drug that was first approved at least ten years ago. To earn the “priority research drug” label, a manufacturer must be actively researching that old drug for a brand-new use that addresses a “major medical need” where no other treatment is available. Think of it like taking that reliable old sedan and upgrading it with a new engine and specialized off-road tires for a specific, tough job.

The catch? This new use must target a condition highly prevalent in federal health programs. To prove this, at least 33% of the claims for that targeted patient population in the previous year must have been paid for by Medicaid, Medicare Part D subsidies, the 340B discount program, or the VA. The Secretary has 60 days to approve or deny the request once it’s submitted, meaning the process moves quickly.

The Pricing Loophole: What the Designation Buys

So, why would a drug manufacturer bother going through this process? Because the designation buys them a huge advantage in pricing negotiations with the government. This is the part that affects your tax dollars and state budgets.

Federal law, particularly Medicaid, uses a powerful cost-control mechanism called the “best price” rule. Essentially, Medicaid is supposed to get the lowest price offered to almost any purchaser, ensuring taxpayers aren't overpaying. This bill exempts a designated “priority research drug” from being counted when calculating this “best price” if the drug is considered a “line extension.” It also excludes it from a special rule used to calculate the best price in Medicaid. Similarly, it gets excluded from certain Medicare pricing calculations related to line extensions.

What this means in plain English: If a drug receives this designation, the manufacturer can keep its price higher for Medicare and Medicaid than it might otherwise be forced to charge. The incentive for the manufacturer is clear: research a new use for an old drug, and in return, you get to skip some of the mandatory price cuts that usually keep government spending in check. It's trading higher drug costs for faster research on prevalent diseases.

The Real-World Trade-Off

For the average person, this bill presents a classic policy dilemma. On one hand, it’s great news for patients with conditions that currently lack treatment options, especially those covered by federal programs. This law incentivizes companies to find new cures using existing, well-understood medications, potentially speeding up access to treatment. If you or a family member suffer from an unmet condition that disproportionately affects Medicare or Medicaid patients, this research incentive is a huge benefit.

On the other hand, the cost mechanism is a significant concern. By exempting these drugs from the core “best price” rule, the bill effectively shifts higher costs onto state Medicaid programs and federal taxpayers. We are paying a premium—potentially a higher price than necessary—to incentivize this specific type of research. If this leads to a flood of manufacturers seeking the designation primarily to avoid price reductions rather than genuinely pursuing high-impact research, the financial burden on the public could quickly outweigh the therapeutic benefits. It’s a gamble that faster access to new uses for old drugs is worth the potential increase in government drug spending.