Trump plan won't allow Medicare to negotiate prices but will propose some drug plans share discounts

Trump plan won't allow Medicare to negotiate prices but will propose some drug plans share discounts · CNBC

In This Article:

  • President Donald Trump will unveil a plan to lower drug prices.

  • Trump has repeatedly chastised drug companies, even accusing them of "getting away with murder."

President Donald Trump will unveil a plan to limit prices on some costly drugs, though it will not go as far as some Democrats want, according to senior administration officials.

The plan, set to be released Friday, will require Medicare Part D plans share a portion of discounts they receive from drug manufacturers with patients, the officials said. It will include ways to allow the government to better negotiate, they said, though it will stop short of allowing Medicare to directly work with manufacturers on prices.

The government program is currently prohibited from doing this. Democrats have pushed to change this, and Trump supported the idea on the campaign trail. His Health and Human Services Secretary Alex Azar , though, has rejected the idea .

"We're not calling for Medicare negotiation in a way that Democrats have called for," one official said. "We clearly want to make important changes that will dramatically improve the way negotiation takes place inside the Medicare program."

Trump has repeatedly chastised drug companies, even accusing them of "getting away with murder." Despite his criticisms as a candidate and as president, he didn't do much to lower prices during his first year in office. He's slated to outline his proposals to tackle prices in a speech Friday.

The proposal will require Medicare Part D plans to share a portion of drug manufacturer discounts with patients, the officials said. This could be a relief to pharmacy benefit managers, as some reports suggested there would be a push to pass through all of these rebates.

Food and Drug Administration Commissioner Scott Gottlieb last week suggested the federal government re-examine whether the rebates should be re-classified under anti-kickback laws, which has weighed on PBM stocks. Shares of CVS Health CVS and Express Scripts ESRX fell about 9 percent last week before paring losses.

Rebates have become a battleground in the fight over who's to blame for high drug prices. Drugmakers accuse PBMs of profiting off higher list prices because they can negotiate bigger discounts. PBMs say it's manufacturers' fault for setting the high prices in the first place.

Trump's proposal will also seek to limit price increases that are greater than the rate of inflation for drugs covered under Medicare Part B, which covers treatments that patients need to be administered by a physician. It includes some of the most expensive drugs like cancer treatments.