President Trump is proposing a new plan to dramatically reduce the cost of prescription drugs.
Under the plan, the Department of Health and Human Services would establish an “international pricing index” to determine how much Medicare should pay for prescription drugs based on the prices charged in other countries.
The announcement, which came a few hours after the administration released a government study reporting that Medicare pays 80% more than other advanced nations around the world on certain prescription drugs, is part of a greater effort by the administration to address certain issues ahead of the midterm elections.
The Trump administration estimates the new policy would save American taxpayers a total of $17.2 billion over five years, including $3.4 billion in out-of-pocket savings for patients.
“When they see their drug prices falling, they’re going to say, ‘What’s happened? They must have made a mistake,’” Trump joked Thursday during his speech announcing the proposed caps on drug prices.
“But you’re going to see a big reduction,” he said.
Medicare is aiming to launch the international pricing index by early 2020.
In his speech, Trump criticized drugmakers for charging Americans more than they charge patients in other countries for the same prescriptions, saying that Americans pay more for prescriptions so that other countries are able to pay less.
“I never understood. Same company, same box, same pill, made in the exact same location,” the president said. “And you’ll go to some countries and it would be 20% the cost of what we pay, and in some cases, much less than that.”
The administration hopes that the international pricing index would help ensure that American patients get a better deal on their medications.