14 May 2018 - On Friday, in the White House Rose Garden, President Trump announced a comprehensive new effort to lower drug prices. The hot take is that the new plan will achieve little, because it doesn’t ask Medicare to directly negotiate drug prices. 

But the hot take is badly misinformed. The Trump plan, if enacted, represents a sea change in pharmaceutical pricing policy, one that will have a significant effect on drug prices in the future.

There’s long been a myth out there that within the Medicare prescription drug program, also known as “Part D,” Medicare doesn’t negotiate drug prices. But Medicare does negotiate drug prices, and has done so since the program was created in 2003.

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