H.R. 2542 — Old Drugs, New Cures Act

This section directs the Secretary of Health and Human Services to establish, within 90 days of enactment, a process for drug manufacturers to request designation of a covered outpatient drug as a priority research drug under the Medicaid Drug Rebate Program, with designations required within 60 days if the drug (1) was approved at least 10 years earlier under specified FDA authorities, (2) is under investigation for a new indication addressing a significant unmet medical need (i.e., no approved alternative) for a disease or condition with high prevalence among Federal health care program beneficiaries (i.e., at least 33% of prior-year claims for the targeted population paid under Medicaid, CHIP, Medicare Part D low-income subsidies, the 340B drug discount program, or VA programs), and (3) meets related criteria. It excludes such designated drugs from (1) the Medicaid definition of line extension, (2) a Medicaid best price special rule for selected drugs, and (3) the Medicare Part D definition of line extension. (Thus, such drugs avoid higher rebate obligations and certain pricing adjustments that apply to line extensions.)