President Donald Trump unveiled a proposal May 11 to slash the prices of pharmaceutical drugs, The New York Times reports.
Here are six main goals he outlined in his speech.
1. Lower drug prices for the elderly. Mr. Trump's proposal backs off his earlier support for allowing Medicare to negotiate the prices of drugs it purchases for older people, but it includes ways to give the government more negotiating leverage. The administration is considering allowing Medicare drug plans to pay different prices for the same drug based on the illness at hand. It also proposed exploring "value-based purchasing" in federal programs, or refund arrangements with drugmakers for medication that doesn't work as expected.
2. Convince other countries to pay more. Mr. Trump wants to pressure foreign countries to increase their prices for prescription medicines. He said the U.S. — which has the highest drug prices in the world — is subsidizing progress that everyone else benefits from.
3. Require drug commercials to disclose prices. The Trump administration proposed requiring companies to include drug prices in prescription drug commercials. The idea raises questions about which price would be presented — the list price or the discounted price for insurers and employers — and whether the information would deter patients from getting needed medication.
4. Prohibit 'gag clauses' for pharmacists. Mr. Trump pledged to take down gag clauses, or contracts between pharmacies and pharmacy benefit managers banning pharmacists from telling patients when it would be cheaper to pay in cash than use insurance. The administration's written proposal said it "may" ban the practice in plans for Medicare Part D.
5. End patent misuse. Patent protection allows drugmakers to recoup research and development expenses, but companies may also use it to charge what they want with little competition. Mr. Trump said "our patent system will reward innovation, but it will not be used as a shield to protect unfair monopolies."
6. Make-over the rebate system. One of the Trump administration's theoretical ideas is to overhaul the existing rebate system for insurers and employers. It is considering whether to deem rebates a form of illegal kickback.