Sep 1, 2023 - Health

How a Republican president could affect Medicare drug negotiations

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Illustration: Natalie Peeples/Axios

A future Republican president who opposes Medicare drug price negotiations likely couldn't dismantle or ignore the process but could have some regulatory discretion to seek lower price cuts, experts told Axios.

Why it matters: Giving Medicare the ability to negotiate drug prices was a signature achievement for President Biden. Republicans, meanwhile, have long opposed Medicare negotiations, regarding them as price controls that could hurt new drug development.

Driving the news: Biden this week announced the first 10 drugs that will be subject to negotiations — a process made possible through the Inflation Reduction Act.

How it works: Experts said the IRA is rather prescriptive in how Medicare must pursue negotiations, so there isn't much that an administration opposing the process can do legally.

  • The Inflation Reduction Act specifies the number of drugs health officials can select for price negotiations, the timeline for choosing the drugs and the pricing criteria.
  • "The negotiations process is fairly well baked into federal law, so a future Administration would have limited flexibility to make changes to the process without Congressional action," Tricia Neuman, executive director of KFF's Medicare policy program, said in an email.

Yes, but: The Centers for Medicare and Medicaid Services has discretion over the final maximum fair price it sets on drugs, said Ian Spatz, a Manatt Health consultant and a former vice president at Merck.

  • The law says which factors must be considered in the price negotiation process, but it doesn't outline how CMS should weigh each factor, according to KFF.
  • "That's to me the biggest wildcard, is how that discretion will be exercised from year to year, from product to product, from administration to administration," Spatz said.

The intrigue: Former President Trump, who has a good shot of being the GOP presidential nominee in 2024, originally campaigned on Medicare drug price negotiations, breaking with his party's longstanding opposition to the idea.

  • But he dropped that pledge about midway through his term, though he supported another measure that would tie Medicare drug payments to lower prices paid overseas.

Reality check: It's not unheard of for administrations — Republican or Democratic — to delay or impede a law they oppose.

  • For instance, the Trump administration faced numerous court battles over its efforts to weaken the Affordable Care Act through regulation.
  • If there is a new administration in 2025, the president could face a decision on whether to defend the drug pricing law against numerous challenges from drugmakers.
  • And if a future White House decides not to enforce Medicare negotiations, "the question then really comes up about who has standing to go to court to object to that," Spatz said.
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