The Key Takeaways of the Trump Administration’s Plan to Lower Drug Costs

drug pricesTrump Administration’s Plan to Lower Drug Costs

If you’ve been keeping up with our recent articles, last week President Trump announced his plan for drug prices. While giving a complete summary of his plan, Health and Human Services Secretary Alex Azar has spoken up about the plan. Azar stated that there are many changes that can be made in the pharmaceutical market in order to lower cost and went into some depth. Today I would like to cover what Azar talked about as we deconstruct the Trump Administration’s plan to lower drug cost.


There are three main ideas that we can take from the blueprint revealed by President Trump. One of the first main ideas in Trump’s blueprint was the restructuring the way pharmacy benefit managers deal with drug-makers. Pharmaceutical companies often negotiate prices based off a percentage with pharmacy benefit managers. A PBM administers prescription drug plans for insurance companies or employers and also negotiate discounts. Azar would like to make PBM’s work off a contract based on set prices for drugs instead of percentage-based. They are also looking to ban PBM’s from making any money at all from pharmaceutical companies. This would leave the companies earning money only from feed paid.

Change in Medicare Payment Options

Azar also says he wants to make the way Medicare pays for drugs a lot simpler and moving more expensive drugs into standard Medicare prescription drug programs. Many of the expensive drugs are bought by doctors, and then they get a cut of administering them to patients. Azar also said he wants to move some of those drugs to part D program so prices can be negotiated against drug companies.

Making Cost Transparent

Transparency of drug prices is another major idea being brought to the board. The Centers for Medicare and Medicaid Services has already stated they will be releasing a new version of drug price dashboards and will give a better explanation of how programs pay for medications. Another idea Azar would like to implement is the price inclusion on all drug company television ads. By letting the patients know how much they are actually buying their drugs for, they will be able to make the decision to find a cheaper alternative. But first Azar states that we need to get rid of the gag rule. The gag rule is in PBM contracts that require a pharmacist to keep quiet about how to get drugs cheaper. This gag rule causes clients to have to buy the most expensive drugs while not necessarily wanting to spend that much.

With these efforts, we can expect to see a difference in drug prices over the next few months/years. Stay tuned for more updates and leave us a comment on what you think!

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