The United States pays much higher prices for brand drugs than people who live in other industrialized nations. Congress and the Biden Administration are considering how to lower US drug rug prices but lowering prices would lower manufacturer revenue and return on investment. Members of Congress have introduced several bills to curb drug prices, but H.R. 3 is the most important because it would allow the government to set drug prices for both government and commercial payers and impose prohibitive tax penalties on pharmaceutical manufacturers that did not accept the government price. Legislation directing HHS to negotiate drug prices with manufacturers needs to specify what happens if the parties fail to agree. Three approaches to setting lower prices for high-priced drugs exist unilateral setting, notice and comment rulemaking, or independent arbitrator. HHS would have the discretion to unilaterally decide on a regulated price and could consider information and positions exchanged during the initial negotiation stage, as well as any expert analysis. HHS uses notice and comment rulemaking to set prices for hospital admissions, physician services, and many other providers. If a rule-making approach is chosen, the public comment period could be shortened to less than 60 days. The statute could require HHS to issue regulations establishing an overall framework, programmatic goals, and decision criteria, and to justify its proposal, limiting arbitrary and capricious actions. Congress would have to decide whether to exempt these price decisions from judicial review. Legislation could specify who arbitrates, how arbitrators are chosen, and whether the arbitrator can set the price anywhere within the ranges proposed by the government and pharmaceutical companies or must decide which party prevails and select the price that the party proposed. Arbitrators could be federal employees charged with acting independently or they could be professional (non-federal) arbitrators. Manufacturers might have been concerned that federal employees would tend to favor HHS. The private sector relies on arbitration organizations to resolve disputes, but public policy concerns might arise about having private individuals make decisions that are inherently governmental, such as determining what to spend taxpayers spend grams like Medicare and Medicaid. The U.S. lets manufacturers of drugs and biologics set whatever price they choose, and government intervention is required to lower prices for many drugs. Many of the almost 400 million annual outpatient prescriptions for brand medicines are subject to some competition from therapeutic alternatives, which can range from different molecules that yield clinically similar treatments to different molecules that treat the same condition but differ in clinically significant ways. If insurers and pharmacy benefit managers were allowed to negotiate lower-than-ceiling prices, they would steer patients and prescribers to preferred drugs through restrictive formularies, differential cost-sharing, and utilization management tools. This would result in a divergence of list and actual (net) drug prices.