More than half of Americans say they have a hard time affording their prescription drugs. Luckily for them, the Trump administration recently proposed a rule to criminalize the shady business practices that keep drug prices high for patients at the pharmacy counter and lawmakers should support the proposal full stop.

The president’s reform takes aim at middlemen in the drug supply chain known as “pharmacy benefit managers” or PBMs. Insurers hire PBMs to negotiate with drug manufacturers and help decide which drugs insurers should cover. This gatekeeper status gives PBMs considerable power to snag big discounts and rebates from drug makers. 

In fact, pharmaceutical manufacturers typically offer PBMs major deals, upwards of 30%, off the sticker price of their drugs. But patients derive little direct benefit from these discounts. 

Patients expect to owe their insurers “co-insurance,” a fixed percentage of the cost of their medication. But since PBM discounts are hidden, insurers are charging patients more than they should. Rather than owing a percentage of the discounted net price of the drug, patients are charged a percent of the full sticker price at the pharmacy counter.

Say a drug’s sticker price was $100 but a PBM negotiated it down to $60. A patient with a 20% coinsurance payment would be required to dish out $20 — or a full third of the price insurers paid — as opposed to $12. 

It’s no surprise then patient out-of-pocket spending on co-insurance grew by 89% between 2005 and 2015. Meanwhile, overall health plan costs grew only 57%.  

In other words, players in the drug supply chain are getting rich while America’s most vulnerable patients continue paying more for their lifesaving drugs. 

The Trump administration proposal would end this abuse. It would make it illegal for PBMs to retain any manufacturer rebates within Medicare’s “Part D” prescription drug benefit for seniors and persons with disabilities. Instead of working with PBMs, drug manufacturers would pass these discounts directly to patients. 

By one estimate, if just a third of manufacturer rebates were passed to patients, Medicare beneficiaries could save $20 billion in the next decade. 

This will help patients stay healthy, too. The lower the patient cost-sharing the more likely he or she will take his or her medications. And medication adherence prevents costly hospital visits and further health complications down the road.

President Donald Trump’s Part D plan is a great first step. But the government should look for additional ways to crack down on PBM profiteering on all drugs — not just those covered by Medicare.

All participants in the drug supply chain — manufacturers, wholesalers, PBMs and pharmacies — should be paid based on the value they provide. Right now, middlemen are earning staggering profits by diverting discounts away from the most vulnerable patients.

Peter J. Pitts is a former FDA associate commissioner and is president of the Center for Medicine in the Public Interest.