Washington, DC - President Trump has exposed the dirty secret of drug pricing: There is a shadowy third player in the transaction between patients and their pharmacists: middlemen who have taken a big kickback from the drug manufacturer, which may or may not be reflected in patients’ out-of-pocket costs.

As Americans heard Tuesday in the State of the Union Address, the president is committed to improving fairness and transparency in health care. These back-door deals in health care undermine his vision for drug pricing and are completely unacceptable.

We have already gotten started. Last week, the Trump administration proposed what could be the single biggest change to the way Americans’ drugs are priced at the pharmacy counter, ever. Under the president’s plan, the current system of kickbacks to middlemen would be replaced with transparent, up-front discounts, delivered directly to patients.

There are other benefits to bringing this new transparency to drug markets. As it is, drug companies regularly raise prices on many medications, because the higher prices allow them to make larger kickback payments, in the form of rebates, to the drug plans that decide which drugs are covered by insurance.

Without these kickbacks, the single biggest incentive to raise prices every year will be eliminated, and prices can come down. Eliminating today’s kickbacks will also open up more choice and competition for patients. Today, kickbacks are used by drug companies to ward off competition, depriving patients of options they may have never known about.

More broadly, Americans ought to know the price of a health care service, and what they’re going to owe out-of-pocket, before they get that service. The president has required hospitals, for the first time ever, to post their standard set of charges online.

The president is going to keep charging ahead with delivering better care at more transparent, lower prices. That’s what it looks like to put American patients first, and that’s what he will deliver.

Read the full op-ed here.