Feb 7, 2024 - Health

How Trump could weaken Medicare drug pricing negotiations

Illustration of a red MAGA-style hat with stitching that reads "Rx".

Illustration: Annelise Capossela/Axios

If Donald Trump returns to the White House, the self-proclaimed master negotiator could get his shot at brokering Medicare prices for drugs.

Why it matters: Trump first ran for president bucking conservative orthodoxy by vowing to negotiate drug prices, though he later abandoned that pledge.

  • But the Democrats' drug pricing law would require the GOP frontrunner to negotiate Medicare prices for some drugs if he wins a second term, and former Trump health officials expect he would use executive power to soften the government's approach.

Catch up quick: The Biden administration last week kicked off negotiations over the first set of 10 high-cost drugs, a milestone for Democrats who long supported leveraging the government's purchasing power to rein in drug prices.

  • President Biden is campaigning on his drug pricing victories, drawing a contrast with Republicans who have widely panned negotiations and other measures they argue will hurt drug development.
  • Though Trump remains critical of the pharmaceutical industry, he hasn't made drug pricing a focus of his campaign the same way he did in 2016 or 2020.

Future administrations won't have much flexibility to dismantle or ignore Medicare drug price negotiations without a change from Congress.

  • The Inflation Reduction Act sets out how many drugs Medicare must negotiate, what factors it should consider, and the types of drugs up for negotiations.
  • But Medicare has discretion in how it determines the negotiated price — and that's where Trump or another Republican administration would have leeway to dial back negotiating powers.

What they're saying: Biden's and Trump's views on Medicare drug prices are "probably not that different," said Brian Blase, a former Trump policy adviser and president of Paragon Health Institute.

  • But the people advising Trump would likely take a more friendly view of pharma.
  • "We'd get more differences in who's advising the presidents and what the presidents hear in way of recommendations," he said.
  • "There definitely would be some changes" to the negotiation process under a Trump presidency. It's not clear how it would change, Blase said, but he and others suggested possible levers that could be pulled.

A Trump health secretary likely wouldn't push for prices below what's required by law, Blase said.

  • A Trump administration could loosen Medicare's interpretation of whether a drug has competition, which could result in more drugs being exempt from negotiations, said Joe Grogan, who led Trump's Domestic Policy Council.
  • Trump appointees may also try to increase transparency around negotiations and cut the number of dedicated staff at Health and Human Services to "dramatically reduce the amount of money and people working on the program," added Joel White, a GOP strategist and president of Horizon Government Affairs.
  • A chief complaint of the pharmaceutical industry is Medicare isn't publicly sharing details of its pricing talks.

The Trump campaign did not respond to requests for comment.

  • Trump last June pledged to "take on Big Pharma" by reviving his failed push to tie what Medicare pays for physician-administered drugs to cheaper prices overseas.
  • It's not clear whether Trump would push for legislative changes to drug negotiations. Trump advisers said he would "gut" the IRA's climate and energy provisions, while key Republican lawmakers have expressed interest in repealing drug negotiations.
  • Meanwhile, drug companies are suing to stop Medicare negotiations in court. If the challenges aren't settled before next year, a Trump administration could decide to drop the government's defense against the lawsuits.

The intrigue: Trump may not want to spend as much time on drug pricing in a second term, Grogan said.

  • "I think there's other fish to fry and there's other things that need to be done" in health policy that would compete for bandwidth, like changes to the Affordable Care Act — which Trump is again pushing to repeal and replace — and trimming Medicare payments to hospitals' outpatient departments.
  • Medicare negotiations are broadly popular with Americans. Three-quarters of Republicans and more than 80% of Americans overall support allowing the government to negotiate lower Medicare drug prices, according to a Gallup-West Health poll last year.
  • Drug price negotiations could follow a similar trajectory to the ACA, said Lesley Yeung, a partner at law firm Epstein Becker Green who advises drugmakers and other health care companies.
  • "The longer it goes on, the more entrenched it'll be, [and] the harder it would be to unwind," she said.
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