Trump's Promise On Drug Prices Looks Pretty Empty
President Donald Trump on Tuesday night pledged to bring down the price of prescription drugs. You should take this pledge as seriously as you take any other policy pledge of his ― which is to say, you shouldn’t take it seriously.
Trump’s promise came about halfway into the State of the Union speech, and it was the most substantive thing he had to say on health care all night. (The Affordable Care Act, which was a primary focus of last year’s joint address to Congress, got barely any mention at all.)
“One of my greatest priorities is to reduce the price of prescription drugs,” Trump said. “In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.”
Trump is absolutely right that consumers in other countries pay less for their drugs. And, although he didn’t say it, those lower prices are a big reason why, compared with Americans, people in foreign countries are less likely to miss out on recommended care or to have serious financial problems because of medical bills.
But consumers in those other countries face lower prices because those countries have very different health care policies in place. In those countries, everybody (or nearly everybody) has health insurance, and the benefits are, on the whole, more generous.
And in those countries, governments negotiate directly with drugmakers about prices. And “negotiate” means demanding discounts and excluding high-priced drugs, if that’s clinically possible.
Plenty of policymakers, most of them Democrats, would like to adopt similar approaches here, either by bolstering the Affordable Care Act or even replacing it with a European-style system (or at least by giving the federal government the bargaining power European governments have).
This is not at all what Trump has in mind. As a presidential candidate, Trump spoke frequently about universal coverage and bringing down drug prices in no small part because both ideas are popular.
But, as president, Trump has outsourced health care policy to the Republican majority in Congress. The GOP’s agenda consists of repealing the Affordable Care Act and replacing it (if at all) with a program that offers less-generous benefits. For those who lose insurance, prescription drugs become even more expensive.
As for direct negotiation of drug prices, Republicans want nothing to do with that. (Plenty of Democrats don’t either, by the way.)
There are intellectually defensible arguments for the GOP majority’s view. On the question of negotiation of drug prices in particular, plenty of serious people worry what it would mean for innovation or the availability of expensive but important medications.
And there are other ideas out there ― some supported by Republicans, some supported by Democrats, some supported by both ― with genuine promise for reducing drug prices, at least on the margins. Some involve restructuring the patent system, for example, while others would reexamine the role of intermediary companies that negotiate prices on behalf of health plans. (Dylan Matthews of Vox discussed these in detail the other day.)
But Trump has shown little interest in considering these proposals, let alone turning some of them into an administration priority.
And rather than getting tough with the pharmaceutical industry, as he promised (and still promises) to do, he appointed Alex Azar, a former executive at pharmaceutical giant Eli Lilly, to run the Department of Health and Human Services. Azar, though widely considered capable, is not the person you appoint to run HHS if you’re going to war with Big Pharma.
“Nothing like sweeping action to curb drug prices is under discussion and the industry probably will not view the subjects of the Trump discussions … negatively,” one drug industry analyst told Politico in June.
Of course, that shouldn’t be surprising. If one thing has become clear over the past year, it’s that Trump doesn’t understand policy details, quite possibly because he simply doesn’t care. And that has repercussions. One of them is that policy commitments he makes publicly don’t mean anything ― not even when they are in his State of the Union address.
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