Trump throws curveball with international drug pricing plan
Illustration: Sarah Grillo / Axios
The White House's addition of a major drug pricing proposal to Medicaid negotiations has thrown a wrench into the reconciliation process and is raising alarm in the pharmaceutical industry.
Why it matters: The "most-favored nation" plan, which would peg Medicaid drug prices to the generally lower prices paid abroad, runs counter to free-market orthodoxy. But it could be hard for GOP lawmakers to say no if President Trump puts his weight behind the idea.
State of play: Trump proposed the policy for Medicare during his first administration. The White House is reviving the idea with House GOP leaders as they race to get a reconciliation package ready for a markup in House Energy and Commerce planned for next week.
- House Majority Leader Steve Scalise declined to directly say Monday night whether he supports the idea — but he didn't reject it out of hand.
- "There were a number of items that the White House discussed with us. That was one of many," he told reporters.
- He did caution that the House has had less time to work on most-favored nation than other Trump ideas like no taxes on tips or overtime. "Those have been discussed for a lot longer," he said.
What they're saying: E&C Health subcommittee Chair Buddy Carter said Tuesday morning that "everything's still on the table" when asked about MFN.
- "The only thing that's in is waste, fraud and abuse, and nothing's out. That's all I can tell you right now," he said.
- He said after an E&C meeting Tuesday that MFN was discussed, but declined to weigh in on it. "It's one of the proposals that's out there," he said.
Rep. Jeff Van Drew, one of the lawmakers with qualms about Medicaid cuts, told reporters Monday night that he was a fan of including MFN in reconciliation over some Medicaid policies.
- "I fully support negotiating for drugs in Medicaid," Van Drew said. "We don't save money by cutting good people [from Medicaid] who are doing their best.… The way you save money is you go after these billionaire drug companies."
- It's not immediately clear how many other members of the GOP caucus are on board, though.
The other side: The pharmaceutical industry is pushing back strongly against the idea, noting it would have spillover effects on the federal 340B program, because that program links its prices to Medicaid.
- "Government price-setting in any form is bad for American patients," said PhRMA spokesperson Alex Schriver.
- "Since Medicaid rebates are used to determine 340B prices, this would also significantly expand the broken 340B program," he added.
- There's also the question of whether the policy would actually save enough money to help reach the $880 billion reconciliation savings target that E&C is supposed to hit. Medicaid drug prices are already lower than Medicare's.
The big picture: Going after drug prices could be more politically favorable for the White House than other Medicaid ideas like a per capita cap for the expansion population, given Trump's comments against cuts.
- Asked if Trump is open to a per capita cap, Scalise said the idea "came up" in leaders' meeting with him Thursday, but Scalise declined "to go into detail on which things are on and off [the table]."
