• The cost of prescription drugs in the United States remains a hot-button issue for policymakers and consumers alike
• The vast majority of the public sees drug prices as unreasonably high with one in four people taking prescription drugs reporting difficulty in affording their medication
• The Trump Administration, Congress and federal policymakers have focused growing attention on potential actions to address drug costs, including regulatory and legislative changes that affect both Medicare and Medicaid as well as  private insurance
• Previously the White House unveiled a plan for reducing drug prices which would let Medicare set prices based on an international index. Unlike previous attempts at controlling the costs, the proposal would be carried out via the regulatory process and therefore would not require approval by Congress
• The President’s FY 2019 Budget proposed a number of policies impacting drug spending in Medicare, including making changes to Part D plan formulary standards and protected classes; excluding manufacturer discounts when calculating out-of-pocket costs for beneficiaries in the so-called “donut hole”; and giving the HHS Secretary the authority to move certain Part B drugs into Part D
• Numerous legislative proposals to control drug prices are being considered by key committees in both the House and Senate including a plan developed by House Speaker Nancy Pelosi which includes elements of a White House proposal to utilize an international price index
• The highly partisan split in Washington underscored by Democratic efforts in the House to consider impeaching President Trump could directly impact efforts to reach a deal on controlling drug prices between the White House and Congress.

The pharmaceutical industry is under mounting government scrutiny because of rapidly increasing expenditures for drugs in the United States. Drug expenditures are now the fastest-growing component of U.S. healthcare costs, increasing at an unsustainable rate of about 15 per cent per year. In fact, it is now estimated that total prescription drug spending comprises anywhere between 10-15% of the $3.3 trillion price tag for total U.S. healthcare expenditures. With pressure mounting both from policy initiatives being advanced by the Trump Administration including a controversial drug price control plan along with a strong legislative push starting in 2019 by the\Democratic majority in the House, understanding how this is most likely to unfold in the months ahead will help determine the future impact of federal policy on prescription drug pricing in 2020 and leading up to the the national election next November. Depending on the outcome of these policy efforts, potentially billions of dollars are at risk for both drug manufacturers and middlemen such as pharmacy benefit managers.