Chairman Scott, Bipartisan Senators Urge HHS to Expand Incentives for American-Made Essential Medicines

WASHINGTON, D.C. - U.S. Senate Special Committee on Aging Chairman Rick Scott joined U.S. Senator Marsha Blackburn, and a bipartisan group of senators in urging the Trump administration to boost federal policy incentives for hospitals to buy and use American-made essential medicines over foreign competitors.

In a letter to Health and Human Services (HHS) Secretary Robert Kennedy Jr. and Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz, the senators called the proposal a critical first step and asked the agencies to go further in the final rule by:

• Covering the entire FDA Essential Medicines List;
• Letting providers choose the payment that fits their purchasing cycles; and
• Paying higher incentives for finished drugs made in America with U.S.-made advice ingredients and key starting materials.

The senators highlighted the dangers of overreliance on China and India for pharmaceuticals, resulting in both national security threats and drug shortages - including shortages of chemotherapy drugs that forced some providers to ration treatment.

The senators wrote, "To secure health care infrastructure for the benefit of national security, patients, and providers, HHS should implement clear reimbursement incentives for utilizing U.S.-made essential drugs. This strategy activates existing, untapped domestic manufacturing capabilities and incentivizes fresh capital investment in American production, further protecting patient care from the dual threats of chronic drug shortages and global supply chain disruptions."

U.S. Senators Adam Schiff, Ted Budd, and Andy Kim also signed the letter.

BACKGROUND:

In October 2025, Senate Aging Committee Chairman Scott and Ranking Member Gillibrand released an investigative report titled "Protecting Seniors' Access to Essential Medications: Securing the Foreign Generic Pharmaceutical Supply Chain." The report focused on America's dangerous overreliance on foreign-made generic drugs, which are largely imported from China. Chairman Scott has been a leading advocate for American drug supply chain transparency and reform.

The Consumer Labeling for Enhanced API Reporting and Legitimate Accountability for Base Entity Listings (CLEAR LABELS) Act, introduced by Chairman Scott and Ranking Member Gillibrand in January 2026, addresses these concerns by adding country of origin labeling requirements to the U.S.'s prescription drug supply chain.

Chairman Scott previously sent a letter to Administrator Oz urging CMS to buy American-made medical devices and pharmaceutical drugs, rather than Communist Chinese products that can be used to surveil and harm Americans. The Chairman has been the Senate's leading advocate that no federal funding should be used to purchase devices or pharmaceuticals made in China when domestic supply is available.

Read the letter HERE or below.

Dear Administrator Oz and Secretary Kennedy:

We write today highlighting the need to reduce our country's over-reliance on foreign drug manufacturing, including through a proposed Medicare payment incentive for hospitals and clinics that use domestically manufactured essential medicines.

The Centers for Medicare & Medicaid Services (CMS) released a proposal in the FY 2027 Medicare Hospital Outpatient Prospective Payment System (OPPS) proposed rule outlining potential approaches to incentivize hospitals to procure domestically manufactured essential medicines. We appreciate that CMS's proposal recognizes how Medicare payment policy can align hospital purchasing decisions to better support domestic medical manufacturing and supply chain resiliency. This is a critical first step, and we encourage you to strengthen this proposal with additional policy levers, outlined below.

In recent years, numerous shortages of essential medicines have demonstrated that vulnerabilities within our pharmaceutical supply chain carry immediate clinical consequences, leaving patients and providers with limited options for essential generics and acute-care medications. For example, shortages of essential generic chemotherapy agents have demonstrated the fragility of pharmaceutical supply chains and their direct impact on patient care, forcing providers in some areas to ration treatment.

To mitigate our strategic dependence on foreign manufacturing hubs like India and China and protect patients from potentially life-threatening care disruptions, we urge the Department of Health and Human Services (HHS) to utilize targeted reimbursement incentives for health care facilities like those proposed in the FY 2027 OPPS proposed rule. This approach will help drive purchasing toward high-quality domestic facilities under U.S. regulatory jurisdiction, effectively tap into existing domestic production capabilities, and clearly communicate the federal commitment to strengthening onshore pharmaceutical manufacturing.

As you move toward final rulemaking on this proposal, we respectfully urge you to consider the following:

• Expand the Incentive to Cover the Entire Essential Medicines List (EML): The Food and Drug Administration's (FDA) Essential Medicines List identifies medicines that are critical to national health care infrastructure and supply chain resiliency. Each of the medications on the EML represents a vital resource for health care providers and therefore must be available in adequate amounts to satisfy the health care needs of a population. Limiting the incentive to only a subset of the EML would distort purchasing decisions and leave clinically important medicines without meaningful support.

• Predictable, Timely, and Adequate Payments: CMS outlined several potential payment methodologies in the proposal. Both methodologies would reflect providers' use of qualifying products. We encourage CMS to permit health care providers to elect whichever payment methodology is easier for its specific institutional needs in order to ensure a streamlined payment mechanism that permits providers to receive these funds in a predictable manner that aligns with their purchasing cycles.

• U.S.-Manufactured Pharmaceutical Products, including U.S. Active Pharmaceutical Ingredients (API) and Key Starting Materials (KSM): Bolstering U.S.-made pharmaceutical products, including U.S.-made API and KSM, is vitally important to the resiliency of American supply chains. Therefore, a payment incentive should recognize and reward domestic pharmaceutical manufacturing, with incentives for use of finished-dose products manufactured in the United States using Trade Agreement Act (TAA)-compliant API and higher incentives for US-manufactured finished doses that also use domestic API and KSM.

To secure health care infrastructure for the benefit of national security, patients, and providers, HHS should implement clear reimbursement incentives for utilizing U.S.-made essential drugs. This strategy activates existing, untapped domestic manufacturing capabilities and incentivizes fresh capital investment in American production, further protecting patient care from the dual threats of chronic drug shortages and global supply chain disruptions.

Thank you for your leadership and consideration. We stand ready to work with you to bolster the resilience of the American health care system.

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