Price Cut that Isn’t Quite
Terry H. Schwadron
July 27, 2020
Here was the news: Donald Trump signed four executive orders on Friday aimed at lowering drug prices, clearly identifying an popular issue on which to take action just three months before election.
Trump said that the orders “will lead to massive reduction in drug costs.”
Wow. That sounds good, even unusually helpful from a White House bent on overturning our Affordable Health Care legislation.
The orders would allow states to develop plans to import cheaper drugs from Canada, eliminate a system of drug discounts known as rebates in a bid to simplify the system, and seek to make EpiPens and insulin more affordable community health center patients. A fourth generally would have Medicare pay what other countries pay for prescription drugs.
Now the left jab: It is unclear when any of this can be finalized and take effect.
In fact, Trump said that implementation of the Medicare order would be delayed until Aug. 25 to give pharmaceutical executives, who strongly oppose the idea, a chance to propose an alternative. Trump will be meeting with drug company executives at the White House this week, offering a concession that the order will not be implemented right away.
And, as has become custom with this president’s executive orders, Trump’s power to enact policy this way is limited. The executive order largely just tell the Department of Health and Human Services to move forward with the formal rulemaking process, which takes time.
Why Now?
Of course, the election is 100 days away, and Trump is seeking any good news.
This particular effort is something he talked about as a candidate four years ago, and Trump already took steps towards allowing importation of drugs from Canada last year, though it has yet to happen.
And Republican legislators have never acted on calls for bills to make any of this happen since they regard this as unwarranted intrusion on a free marketplace. Indeed, Trump opposes the sweeping bill to lower drug prices passed by House Democrats in December, which would allow the secretary of Health and Human Services to negotiate lower prices.
So, Democrats are dismissing the actions as election-year posturing, arguing the orders will not actually take effect and reduce drug costs.
Meanwhile, Trump, who always wants the marketplace to resolve issues rather than regulations, said he was willing to drop the Medicare executive order if drug companies come up with an alternative.
The order states that the new rules cannot go into effect until the HHS secretary certifies that the move will not increase federal spending or premiums. An earlier version of the proposal was projected to do both, meaning that it is unclear if the new changes will actually end up going into effect.
So Where Are We?
I want lower drug prices. Trump says he does, but none of this is actually bringing them into reality.
Instead, once again, we have what looks to be an election promise without the beef.
Trump has encouraged serial attacks on the nation’s health systems, even in the midst of pandemic, and that Supreme Court ruling is pending in which the Trump administration argued that the nation’s health system is illegal. Trump, of course, has not proposed an alternative, other than making statements in support of inexpensive private insurance plans that generally find protection for patients with pre-existing conditions prohibitively expensive.
The number one issue in health obviously is coronavirus, where Trump’s record is not good. Trump continues to insist that dealing with the contagion is a problem for states, not the federal government.
But prescription drug prices? Apparently that is a fine federal target, and something where we all, except drug company executives, can find agreement. So, naturally, we’re giving this question back to the drug companies.
I need an aspirin — that I can afford.
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