"There are not bad industry players," the Louisiana Republican told CNBC's "Closing Bell." "There are just incredibly bad incentives."
Cassidy, who spoke shortly after Trump unveiled his plan to lower drug prices, said the president is attempting to strip down some of the unnecessary complexities in the health-care industry. That includes the role of pharmacy benefit managers, which negotiate drug benefits for insurance plans and employers.
Trump sharply criticized PBMs during his speech from the White House on Friday.
The senator argued that in some cases the role of PBMs has "expanded" under Trump's plan. He was referring to Trump's plan to create "new tools to negotiate for lower prices" in Medicare Part D plans.
Part of Trump's plan would require insurers and PBMs to share a portion of the rebates they get on prescription drugs with consumers to lower their out-of-pocket costs. It could also make it easier for cheaper generic drugs to reach the market. Drugmakers have accused PBMs of profiting off higher list prices because they can negotiate bigger discounts.
"Someone getting a prescription or a blood test or an X-ray should know the cost of that before she has it done," said Cassidy, a member of the Senate Committee on Health, Education, Labor and Pensions. "The president is all about that."
However, not everyone was positive about Trump's plan. Shortly after the Trump's speech, top Democrats, including veteran Rep. Elijah Cummings, D-Md., said the president was "abandoning his promise" to allow direct negotiation to lower drug prices.
—Reuters contributed to this report.