By NextBestFitPhase 1: Enactment & build · Step 1.9
Create the national formulary & negotiate drug prices
Months 0–18 for the initial formulary; continuous negotiation · National Formulary and Pricing Board; HTA InstituteDiscuss this step
Prescription drug pricing
How does UHP set drug prices?
The plan chooses
A National Formulary and Pricing Board negotiates a price for every drug. It uses a value assessment (clinical benefit vs. existing treatments) and an international reference band (the median price in 11 comparable countries) as the opening offer. If a manufacturer refuses to negotiate in good faith, the government may authorize generic production under 28 U.S.C. § 1498 (government use of patents with reasonable compensation). New drugs with no comparator get a provisional launch price for 3 years, then a value-based reassessment.
Medicare's IRA negotiation produced 38–79% discounts from list price on the first 10 drugs. Extending negotiation to every drug and every patient makes UHP the buyer for the whole U.S. market, which ends the ability to charge Americans 4x what other countries pay for brand drugs.
Negotiation + value assessment + §1498 backstop (chosen)
As described.
Pros
- +Retail drug spending falls from $467.0B to about $380.1B
- +Patients pay $0 for formulary drugs
Cons
- −Reduced pharmaceutical revenue lowers R&D incentive CBO estimated H.R. 3 would lead to ~8 fewer of ~300 new drugs in a decade; this plan is broader, so expect more.
- −Some new drugs launch later in the U.S. or not at all This already happens in other countries with value assessment.
- −§1498 use would be litigated and anger trading partners
Precedent: UK NICE (cost-per-QALY thresholds), Germany AMNOG (benefit assessment, then negotiation), Medicare IRA negotiation (2026).
International reference pricing only
Pay no more than the average of other countries.
Pros
- +Simple and transparent
Cons
- −Manufacturers delay or withhold launches abroad, or raise foreign list prices
- −Ties U.S. policy to other countries' decisions
Keep market pricing, cap patient costs
UHP pays list-minus-rebate like today.
Pros
- +Maximum innovation incentive
Cons
- −Forgoes about $113.1B a year in price savings
What this choice gives up
- Some future drugs and some speed of access to new drugs.
- Pharmaceutical shareholder value.