New Act Grants Government Power to Strip Drug Monopolies if Prices Exceed International Median

The newly proposed Prescription Drug Price Relief Act of 2025 creates a powerful new mechanism for the federal government to intervene in the market for expensive brand-name drugs. The core idea is simple: if a drug’s price is deemed “excessive,” the government can immediately cancel the manufacturer’s exclusive rights, opening the door for cheaper generics to flood the market.

The Price Tag Check: What Triggers the Alarm?

This bill gives the Secretary of Health and Human Services (HHS) the job of reviewing all brand-name drug prices annually. A price is flagged as “excessive” in one of two ways (Sec. 2). The first is a straight-up international comparison: if the U.S. price is higher than the median price charged in Canada, the U.K., Germany, France, and Japan, it’s excessive. Think of it like this: if your prescription costs $1,000 here, but the average in those five countries is $700, the drug company is in trouble.

Even if a drug passes the international test, it can still be flagged based on a long list of “other factors.” This is where the Secretary gets a lot of discretion (Sec. 2(b)(2)). They must consider things like how much the federal government invested in the drug’s development, whether the price is stopping people from getting the medicine, and if the price has risen faster than inflation. This broad authority means the government can challenge a price even if it’s internationally competitive, based on its perceived value to the public.

Immediate Loss of Monopoly: The IP Hammer

This is the part that will make pharmaceutical CEOs sweat. If the Secretary determines a drug’s price is excessive, the government immediately terminates any government-granted exclusivity or monopoly the manufacturer holds (Sec. 3(a)(1)). This is a significant regulatory action: the government essentially cancels the patent protection that prevents generics from entering the market.

For you, the busy consumer, this means potentially much faster relief from high costs. If you rely on an expensive brand-name drug, the moment its price is flagged, the door is open for generic manufacturers to step in. The Secretary then issues “open, non-exclusive licenses,” allowing anyone to make, sell, or import the drug, even letting them use the original company’s testing data to speed up their own FDA approval (Sec. 3(a)(2)). The bill mandates that generic applications relying on these licenses must be prioritized and acted upon within eight months.

The Royalties and the Catch

When a generic company takes one of these open licenses, they don't get a free ride. They must pay a “reasonable royalty” back to the original patent holder (Sec. 4). The key constraint here is that the royalty rate cannot be set so high that the resulting generic drug is still sold at an “excessive price.” The goal is clearly affordability. The Secretary has the power to set this rate, considering factors like the drug’s value to patients and how much federal money went into its development.

Manufacturers also get a clear warning about playing games: if they raise the price after the initial excessive price determination but before a generic enters the market, the Secretary can sue them for damages equal to the money they made from that price hike (Sec. 3(c)). This is a direct disincentive against last-minute price gouging.

Transparency and the Reporting Burden

To make this whole system work, the bill creates massive new reporting requirements for manufacturers (Sec. 6). Every year, drug companies must provide a detailed breakdown of their pricing, sales revenue, and, critically, their spending on research and development (R&D) and marketing, both domestically and abroad. They must even detail public subsidies they received for clinical trials.

For the public, this means unprecedented transparency. The Secretary must maintain a public database listing every drug reviewed, those flagged as excessive, and all licensing activity (Sec. 5). This moves the conversation about drug pricing out of closed boardrooms and onto a public website, giving patients and policymakers the data needed to understand why drugs cost what they do.

The Real-World Impact

This Act is a major regulatory shift. On the one hand, it offers a clear path to lower drug prices for consumers by leveraging international pricing and federal investment. If you have a chronic condition requiring an expensive specialty drug, this bill could translate directly into lower co-pays and better access. It puts the government firmly in the driver’s seat regarding price negotiation, backed by the threat of intellectual property revocation.

On the other hand, the immediate cancellation of exclusivity is a severe penalty for manufacturers and could be challenged as a regulatory taking. It also grants the Secretary significant, almost singular, authority to define “excessive” and set royalty rates, which introduces a level of regulatory risk that could chill future private investment in drug development. The success of this system hinges entirely on the Secretary’s ability to manage this complex process fairly, balancing the need for affordable medicine with the need to incentivize pharmaceutical innovation.