Drug Prices Could Drop Under Trump

Drug Prices Could Drop Under Trump


Earlier this year, the Trump administration introduced proposals that would reduce the price of prescription drugs. The proposals, which were announced by President Trump on October 25, are part of an initiative to bring drug prices in the United States in line with international levels. During his speech at the Department of Health and Human Services, the President said the reforms would help “Put America First.”


The way Trump proposes to reduce the price of prescription drugs is by allowing Medicare to directly negotiate drug prices with drug companies that he says have “rigged” the system and caused Americans to pay more than necessary for their medications. He aims to stop foreign drug companies from charging American’s more than they charge citizens of their own country.


In tandem with the President’s announcement, the Centers for Medicare & Medicaid Services (CMS) released an advance notice of proposed rulemaking (ANPRM). The notice discusses a potential new mandatory payment model referred to as the “International Pricing Index” (IPI). According to the CMS, a proposed rule might be issued in Spring 2019 that would make the IPI standard, officially launching the model nation-wide in Spring 2020.


In the ANPRM, CMS says the model might include:

  • A lowered Medicare payment amount for selected Medicare Part B drugs to levels that more closely align with international prices
  • The allowance for private-sector vendors to negotiate prices of drugs and compete for physician and hospital business
  • An increased drug add-on payment to reflect 6 percent of historical drug costs to be paid to physicians and hospitals according to a set payment amount structure


If they are instated, it is unclear how tangible the effects of both Trump’s and Medicare’s proposals will be to the average American. Drug prices could, indeed, drop with greater government involvement. On the other hand, experts point out that — according to the Department of Health and Human Services — the plan would just be an experiment that involves cut prices for only a handful of costly drugs. Either way, the proposal still needs to make its way through other government offices and its journey will be crucial to follow for Americans who rely on drug-based treatments.


Dr. Steven Lipsky

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