(CNN) The Trump administration unveiled a proposal Thursday that could radically change the way many drugs are priced and paid for in Medicare and Medicaid.

The plan calls for effectively banning drug makers from providing rebates to pharmacy benefit managers and insurers in Medicare Part D- and Medicaid-managed care plans. Instead, drug companies would be encouraged to pass the discounts directly to patients at the pharmacy counter and would pay pharmacy benefit managers a fixed fee.

The move, which was immediately praised by pharmaceutical companies but panned by insurers and pharmacy benefit managers, would be one of the most substantial steps in the Trump administration's quest to lower drug prices.

"If this rule goes into effect in its current form, it would be the largest change the administration has yet announced on drug pricing," said Rachel Sachs, an associate law professor at Washington University.

However, the actual impact of the proposal remains unclear. It's likely that Medicare and Medicaid patients with high drug costs would save money, but the shift could result in larger premiums for all beneficiaries.

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