In its first move towards fulfilling the president's campaign promise to reduce the cost of prescription drugs, the Trump administration released a 28-page document summarizing a number of ways to push down prices.
Most of the suggested policies are traditional right-of-center ideas that emphasize the benefits of competition and the harms of government regulation. Few of the proposed solutions are specific.
The administration points a finger at the FDA, saying that the time it takes the agency to review and approve new drugs leaves consumers with fewer generic options and higher prices. One potential solution, it suggests, is to change "the criteria for expedited review to include new molecular entities that are second or third in a class, or second or third for a given indication for which there are no generics."
Recommended For You
Medicare and Medicaid have also incentivized high drug prices, the document claims.
Since drug-makers are required to offer their drugs to Medicaid at a steep discount, those that manufacture drugs that are particularly prevalent among low-income patients, such as HIV medication, have an incentive to inflate the sticker price, says the administration. The solution, it suggests, is for the federal government to develop better standards on how "best prices" for Medicaid be determined.
The document describes a number of problems in Medicare, many of which it claims incentivize beneficiaries to use high-cost, low-value drugs.
The solutions include lower co-pays for generic drugs as well as redesigning the Medicare Part D Coverage Gap Discount Program, which require drug-makers to offer 50 percent discounts to those in the coverage gap. The problem with that program, the document says, is that not only are the drugs steeply discounted, thereby incentivizing patients to choose more expensive medication. Once a patient has spent enough to reach the "catastrophic" phase of coverage, they are only paying 15 percent of the cost.
In line with Trump's stated aims of cracking down on what he views as unfair trade practices, the document also suggests that the U.S. take steps to stop other countries from "freeloading" off the medical research that U.S. consumers and taxpayers are funding.
Because many other countries have price controls that limit the amount drug-makers can charge, pharmaceutical companies are unable to make major profits overseas and therefore seek profits by charging higher prices to U.S. consumers, the document claims.
It's unclear what, if anything, the document will lead to in terms of policy.
Also on Monday, Sen. John McCain, R-Ariz., unveiled a bill that he co-authored with Sen. Tammy Baldwin, D-Wis., that would require pharmaceutical firms to provide more information to justify their prices.
"You promised to take on high drug prices as your top priority, so we urge you to call on leadership in Congress to take up and pass our bipartisan legislation," said Baldwin and McCain in a letter to Trump.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
