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Trump Administration Medicare Drug Price Announcement Is a Good First Step – Here’s Why It Matters

By Blue Cross NC | October 26, 2018 | Industry Perspectives

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We welcome the Trump Administration’s recent announcement of a pilot effort to rein in Medicare spending on prescription drugs. This is a reasonable first step toward getting spiraling drug prices under control. After all, prescription drug spending is growing faster than any other category of health care costs.

As part of this pilot, Medicare will base payments for drugs administered in the hospital setting on the prices paid in other advanced, industrialized countries. This will save money for the federal government and for Medicare subscribers.

It’s a step in the right direction, but to make prescription drugs more affordable for all Americans, we need to get to the bottom of why these drugs are so expensive in the first place.

Consider these key facts:

  • Nine out of ten of the largest drug makers spent 50 percent more on advertising than they spend on researching and developing new drugs.1
  • Using a practice called “pay for delay” pharmaceutical companies whose patents are expiring pay the generic drug company not to launch a version of their drug. The Federal Trade Commission estimates this practice costs us $3.5 billion in higher drug costs each year.3
  • The U.S. spends two times more for the exact same prescription drugs compared to other countries.2   

What’s Next

If we want drug prices to be fair and sustainable, we need to have an open and honest conversation about drug pricing that supports both innovation and affordability for all Americans. While this Medicare initiative will bring relief to millions, we will help many more when we explore reforms that address the underlying causes of high drug prices in the U.S. through increased transparency, competition, and value.

Here are 5 ways you can save on prescriptions today. 



1 The Crisis.” The Campaign for Sustainable Rx Pricing, 2018. Accessed Oct. 2018.

2 Why Is Health Spending in the United States So High?” The Organization for Economic Co-operation and Development (OECD), 2011. Accessed Oct. 2018.

3How Pharma Companies Game the System to Keep Drugs Expensive.” Harvard Business Review, Apr. 2017. Accessed Oct. 2018.