Small Biotech Innovation Act
Sponsored By: Representative Pfluger
Introduced
Summary
R&D-based exemption from Medicare drug price negotiation for a targeted class of small biotechnology makers starting in 2029. It would exclude qualifying single source drugs when the company meets defined R&D spending and ownership criteria.
Show full summary
- Small biotech manufacturers: Firms with five or fewer qualifying single source drugs could earn an exemption if they invest a high share of net revenue in research and development. The required share scales with drug count, from 30% up to 70%.
- Medicare negotiation pool and patients: Qualifying single source drugs owned by these "RD-intensive" small biotech manufacturers would be removed from the negotiation-eligible list for initial price applicability years beginning in 2029, changing which drugs Medicare can negotiate on.
- Compliance and ownership rules: Manufacturers must submit annual GAAP-based revenue and R&D reports and may appeal denials under a Secretary-established process. Drugs lost by acquisition become ineligible if the successor does not meet the RD-intensive test at the next plan year start.
Your PRIA Score
Personalized for You
How does this bill affect your finances?
Sign up for a PRIA Policy Scan to see your personalized alignment score for this bill and every other piece of legislation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
1 provisions identified: 0 benefits, 0 costs, 1 mixed.
Some small biotech drugs skip Medicare talks
Starting in the 2029 price year, some small biotech drugs would be exempt from Medicare price negotiation. A company would qualify only if it has 1–5 single‑source drugs, is not owned or controlled by a foreign government, and is not organized in a covered nation. It would also need to spend a set share of its three‑year average net revenue on R&D under GAAP: 1 drug = 30%, 2 = 40%, 3 = 50%, 4 = 60%, 5 = 70%. Manufacturers would have to apply each year, report net revenue and R&D spending, certify accuracy, and follow any added rules the Secretary sets. If denied, they could appeal, and the decision would need to finish by the selected drug publication date for that year. If a qualifying maker is bought after 2029 by a non‑qualifying firm, the drug would lose the exemption the next plan year. If you take an exempt drug, Medicare might not negotiate its price, which could affect your savings.
Sponsors & CoSponsors
Sponsor
Pfluger
TX • R
Cosponsors
Kustoff
TN • R
Sponsored 6/4/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.govTake It Personal
Get Your Personalized Policy View
Start a Free Government Policy Watch to see how policy affects your household, then upgrade to PRIA Full Coverage for year-round monitoring.
Already have an account? Sign in