Trump Orders Big Pharma To Reduce Drug Prices Or ... Well, They Just Better!
Biden's plan was too slow and legal. Empty threats are easier!
Donald Trump continued his string of impressive-sounding but basically unenforceable executive orders Monday by ordering American pharmaceutical companies to reduce their drug prices in the USA so everyone can have prescription drugs at the same price as in Europe, but without the socialism. No, you smartasses, the government demanding price reductions from for-profit companies wouldn’t be socialism, because the US is not commie like France is.
Trump bragged on his fake Twitter substitute site Sunday that “Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%.” Yes, both drugs and pharmaceuticals. This guy is not messing around!
There’s just a little problem with the order, which is that presidents don’t actually have the power to make private companies set prices, not even when they dress it up with some herebys. As The New York Times points out (gift link),
Mr. Trump opted not to propose measures that could have had more teeth, such as calling for his administration to work with Congress on legislation or writing regulations to change how government health programs pay for some drugs.
Propose legislation that would have to be passed by Congress? Now let’s not get carried away in some fever dream of constitutional governing here!
The order directs HHS Secretary Robert F. Kennedy Jr. to come up with a plan within 30 days that would determine “most-favored-nation price targets” that would be presented to pharmaceutical companies, possibly while Kennedy says “nice corporate office you have here. Be a shame if it were flooded with raw sewage.” (Haha, we are joking of course! Kennedy has no objections to swimming in poopwater!)
And then, without being terribly specific, if the companies don’t make “significant progress towards” delivering on the demands, well then HHS would come up with some rules to make that happen, which, again, the executive branch doesn’t actually have the power to do, as if that would get in Trump’s way.
The big problem for Trump is that while federal insurance programs like Medicare have the statutory authority to negotiate some drug prices (thanks to Joe Biden’s 2022 Inflation Reduction Act), there’s no similar law that would let Trump make similar demands when it comes to private insurers, or people paying out of pocket. The EO never gets into that, and of course never mentions the IRA, since Biden did that.
Even the Harvard med students are laughing at Trump:
“The executive order reads more like an aspirational statement than a serious attempt to initiate a policy change,” said Ameet Sarpatwari, who studies pharmaceutical policy at Harvard Medical School.
Trump’s order is framed, not surprisingly, as a protracted whine about how other countries, with all their socialism, are taking advantage of America by negotiating lower prices for their various national health programs, which in our case we have not got.
As a result, Big Pharma makes most of its profits in America, and that’s not fair, says Trump (or really, whoever wrote the thing), and that’s amazingly close to getting the point: If we treated healthcare as a right and had universal healthcare, we too would be in a stronger position to negotiate lower prescription drug prices for everyone. But we’re allegedly committed to free market capitalism, so we leave such negotiations up to private insurers, who have their own shareholders’ profits to think about.
Instead, the EO frames the problem in terms of nasty foreigns and Big Pharma getting away with an “abuse of Americans’ generosity”:
Drug manufacturers, rather than seeking to equalize evident price discrimination, agree to other countries’ demands for low prices, and simultaneously fight against the ability for public and private payers in the United States to negotiate the best prices for patients. The inflated prices in the United States fuel global innovation while foreign health systems get a free ride.
Again, really close, but that’s also simply a description of for-profit healthcare under the patchwork mess of a healthcare system the US has settled for.
In a speech and presser Monday that the AP sanewashed with the adjective “wide-ranging,” Trump claimed to have invented the word “equalize” all by himself, and then said that’s what his order would do to drug prices.
Basically what we’re doing is equalizing. It's a new word that I came up with, which I think is probably the best word. We’re going to equalize. We’re all going to pay the same. We’re going to pay what Europe pays.
The AP report, sadly, leaves out the first two sentences, with Trump’s act of linguistic cunning, but includes the bit about Europe, which isn’t in the video.
As part of the great equalizing (TM and © The Trump Organization), the order also instructs federal agencies to find out why European countries get away with paying less, and demands the agencies find ways to make those freeloaders pay more. Once more, though, those wet blankets at the Times point out that American presidents are also not the boss of other countries’ healthcare either.
Mr. Trump threatened to use trade policy to push European countries to pay more for prescription drugs. But drug companies are already locked into contracts with governments, and if they try to charge more for new medicines, European countries may balk at covering them at all. And higher prices in Europe would not necessarily lead to lower prices in the United States, drug pricing experts warned.
You can see why Trump wants to throw all of them — journalists, experts, Europeans — in jail. What a bunch of negative Nellies!
The really annoying, frustrating thing about the executive order is that, like that Clickhole headline about the worst person you know, it includes a pretty good point, noting that Big Pharma companies rely on publicly funded medical research to develop many of their products. Then the companies make most of their profits selling drugs in the US, all the time justifying high prescription costs because without them, the beneficent drug companies couldn’t keep making incredible breakthroughs. You want the next miracle cure, you’d better be happy paying through the nose for drugs that cost a pittance to manufacture!
But unlike the fictional asshole’s heartbreaking good point, Trump’s “solution” is shit, because it consists mostly of asking for lower prices and then threatening regulatory action that has no basis in law. But at least he’s eliminating all our medical research, so take that, Big Pharma and parents of kids with cancer.
When he issued a similar, but more limited, order in his first term, capping prices on injected drugs like insulin that were delivered in a doctor’s office, courts put it on hold because it was sloppily written, ignoring federal law, so it never went into effect.
Joe Biden and congressional Democrats passed a real $35 per month insulin price cap and a plan to negotiate prescription drug costs for Medicare as part of the Inflation Reduction Act, and both have survived lawsuits so far. Although those parts of the IRA are still in effect, Trump wants them repealed, and Republicans seem likely to go along.
Instead, they’ll have the Trump EO, which experts on drug prices say won't accomplish bupkis.
“It almost sounds like: We’ll just ask for lower prices and see how that goes,” said Stacie Dusetzina, a health policy professor at Vanderbilt University who studies drug pricing. Barring more substantive action, she said, “I would not anticipate drug prices to come down in the near future.”
Well sure, you elitists say that now, and you keep talking about how prescription drug pricing reform would require an actual law — like, say, the IRA we already passed in 2022, or better yet, universal healthcare. But Donald Trump is willing to give bullying and empty threats, so you just watch what wonders he’ll work!
[AP / NYT (gift link) / White House]
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Updated with a small note about how Trump has solved the problem of Big Pharma developing drugs using publicly funded research by eliminating all the grants for medical research. Take that, Big Pharma and parents of kids with cancer!
Wild Chonk is not to be fucked with.