Predicting the Unpredictable: This Week Trump Expected to Address Drug Pricing

Trump Editorial

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Barring yet another headline-leading scandal, confrontational tweet or TV talk-show rant, Trump is expected to offer a speech on his administration’s policies toward drug pricing this week. Nobody really knows when it’s to be or what it’s supposed to cover, although most industry and political observers expect if the president stays on script—a very big “if”—he will discuss policy at a very high level, blast industry executives for “getting away with murder” and leaving the details to the U.S. Food and Drug Administration (FDA) and Health and Human Services (HHS).

Leading health officials have been describing the speech as providing a “comprehensive strategy” that will lead to “profound modernization.”

A hospital and insurance lobbyist told STAT, “This is not him waking up, watching ‘Fox & Friends’ and losing his s—. It’s a planned speech that HHS is behind. Investors will be watching more closely, and going off script is a much bigger deal.”

Trump is quite good at making statements and tweets that generate headlines, and they often seem to have little if anything to do with policy. “It’s like one of the great parlor games—what will the president say and what will really happen, which are two different things,” Ian Spatz, a former lobbyist for Merck who is now a senior adviser at Manatt Health, told STAT.

More important than the speech is likely what the administration, the FDA and HHS actually do. Most are expected to be small changes, no matter what rhetoric the president resorts to. Here are a couple ideas that could come up in the speech, but probably won’t. They include:

Allowing Medicare to negotiate drug prices, which is currently against the law. During his campaign, Trump supported the idea, but he hasn’t mentioned it since taking office, and Alex Azar, the secretary of HHS, has openly opposed the policy.

Allowing consumers to buy drugs from Canada or other countries. It has some bipartisan support, but Azar, the FDA Commissioner Scott Gottlieb, and other healthcare officials have opposed this for quite some time. In June, Azar stated, “This thing about importing drugs from Canada is a canard. These drugs are not American-produced drugs sitting in a Canadian retail pharmacy. These are often drugs coming from China or India or elsewhere that are just being trans-shipped through Canada into the U.S. The administration [and] public health officials have repeatedly found these are not safe. There can be no guarantee of safety.”

Pressuring other companies to pay more for drugs. Given Trump’s current policies over trade tariffs for aluminum and other products, it’s not hard to envision him wanting some sort of trade war regarding drug pricing with other countries. However, his trade tariffs appear to be getting some tough backlash, as China canceled orders for soybeans and other agricultural products in the U.S. in retaliation, with U.S. agricultural economy potentially taking a $14 billion hit as a result. And as it relates to Canada, for many tariffs, the U.S. has given Canada and other trading parties an exception.

Others wonder if Trump will make changes to Medicare Part B. President Obama attempted to take on this issue, but eventually dropped it after opposition from pharma companies and physician groups. Trump is always trying to either undo things Obama did or do the exact opposite, and has already floated similar proposals in the White House budget. The Hill writes, “The problem, some advocates say, is that Medicare Part B incentivizes the use of pricier drugs by reimbursing doctors a percentage of the cost, rather than a flat fee. Trump could try to change the system to bring down costs, either through the administration’s Medicare innovation center, or perhaps more likely a lobbyist said, through authority already provided under the 2003 Medicare Modernization Act.”

Of course, with Trump, you can expect the unexpected … at least sometimes. The Hill notes, “One key question is whether the administration will target pharmaceutical companies directly, as opposed to taking aim at other actors like the pharmacy benefit managers that negotiate drug prices and have come under scrutiny for a lack of transparency. Lobbyists said they expect that Azar wants to take some actions that directly draw opposition from pharmaceutical companies, in part to avoid headlines about backing down from a fight or catering to industry.”

It’s also possible that the speech will get buried in another scandal or Trump’s ongoing legal woes with porn actress Stormy Daniels, the revolving door that is his cabinet, Environmental Protection Agency (EPA) chief Scott Pruitt’s ethics scandals, the Robert Mueller investigation, legal advisor Rudy Giuliani’s missteps, the raid on his lawyers’ offices, the raid on his doctor’s office, the dropout of Trump’s nominee for the Department of Veterans Affairs and most recently, whether Gina Haspel, Trump’s choice to lead the Central Intelligence Agency, requested her nomination be withdrawn.

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