Trump’s Plan to Lower Drug Prices Tests Limits of the Law

In his effort to bring down prescription drug prices, President Trump is testing the limits of a law that prohibits the government from interfering in negotiations between drug manufacturers and insurance companies that provide drug coverage to more than 42 million people on Medicare.

The prohibition was adopted 15 years ago when a Republican Congress added drug benefits to Medicare, and since then Republicans have repeatedly invoked it to quash Democratic demands for the government to rein in drug costs.

But now, with prices of new drugs often topping $10,000 a year, Mr. Trump has unveiled a blueprint to lower drug prices, and some of his ideas envision a larger role for the government.

He wants to require insurers to reduce retail drug prices to reflect the discounts they receive from drug manufacturers. These discounts often take the form of rebates paid to insurers and middlemen known as pharmacy benefit managers.

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