November 17, 2017 Press Releases

Trump Administration Proposes Important Change To Lower Drug Prices

WASHINGTON, DC – Patients For Affordable Drugs applauded a proposal by the Trump Administration that would lower drug costs for Medicare patients. A key change in the Medicare Part D proposed rule would allow beneficiaries to pay coinsurance and deductibles based on discounted drug prices rather than the outrageous retail prices. By basing coinsurance and deductibles on lower prices, consumers could save millions per year in out-of-pocket costs.

“We applaud CMS for bringing this proposal forward and seeking information on how it should be implemented. It is a simple matter of fairness,” said David Mitchell, President of Patients For Affordable Drugs and a Medicare beneficiary with an incurable blood cancer. “Patients should pay for drugs based on the discounted price everyone else uses — not on a higher retail price set by monopoly drug companies.”

By law, Medicare cannot negotiate the retail price of drugs. But most drug purchasers — like employers, insurance companies, and the Veterans Administration —pay drug prices that are discounted or based on a rebated price. Until now, Medicare beneficiaries have not had access to discounted prices, so out-of-pocket costs for just one drug could reach almost $12,000 per year, according to the Kaiser Family Foundation. This proposed change could lower that amount significantly, although precise estimates are not yet available.

Patients For Affordable Drugs and academics have called for this change previously. Just last week, Mitchell told an audience of drug pricing experts at the Federal Trade Commission “the fact that patients pay coinsurance and deductibles on the retail price and everyone else in the system gets the rebate price is wrong. It needs to be changed.”

While the proposed change is needed and welcome, there is a long road ahead to gather comments on how it can be implemented. It also does not address directly the high prices set by drug corporations, which are the root cause of the drug price problem. In fact, the drug industry’s lobbying influence over this administration is evident in the rule proposed yesterday, which leaves drug corporation pricing power largely untouched. Other solutions are still needed, such as Medicare price negotiation and increased transparency into PBMs.

Patients For Affordable Drugs plans to submit comments on behalf of patients encouraging CMS to adopt the revision in the final notice. It would take effect in 2019.

Patients For Affordable Drugs is the nation’s only bipartisan patient organization focused exclusively on policies to lower prescription drug prices. It does not accept funding from any organizations that profit from the development or distribution of prescription drugs.


Patients For Affordable Drugs is the only independent national patient organization focused exclusively on achieving policy changes to lower the price of prescription drugs.