Opinion

How Trump Can Follow Through on His Drug-Pricing Promise

President Donald Trump likes to talk big, and sometimes he does follow through. Just think tariffs on imports and a U.S. embassy in Jerusalem.

But one area where the president and the GOP have yet to make their walk match the talk is on drug prices. And if they’re not careful, they may find that inaction comes with its own high price.

The president made much ado about drug prices at a Rose Garden press conference in May, saying his administration was “launching the most sweeping action in history to lower the price of prescription drugs for the American people.”

“Everyone involved in the broken system — the drugmakers, insurance companies, distributors, pharmacy benefit managers and many others — contribute to the problem,” he said. “Government has also been part of the problem because previous leaders turned a blind eye to this incredible abuse. But under this administration, we are putting American patients first.”

Trump offered cause for hope in that speech — noting steps his administration had taken to control drug costs, such as reforming a discount program for seniors and encouraging the use of generics. And he outlined further steps, such as encouraging competition, reforming an outdated Medicaid price system, and confronting drug companies that spend hundreds of millions of dollars lobbying for favorable rules and unfair government protection.

In fact, the blueprint that accompanied the president’s press conference shows he understands how to fix the problem. The challenge is to translate that blueprint into the right series of actions.

Recently, when he unveiled a plan to reduce the price Medicare pays for some drugs by basing prices on what people pay in other countries, he moved in the wrong direction. Price controls and more government red tape are not what we need.

What Trump should do is go back to his blueprint and grasp that the best way to fix the problem is through increased transparency and competition and better tools for negotiating. And one step that must come with that is to confront the drug manufacturers.

The drugmakers insist that the problem is the “middlemen” — the pharmacy benefit managers — who push for discounts and rebates, forcing drugmakers to charge more in order to maintain their profit margins.

While this system is far from perfect, and while drug manufacturers do spend a lot of money researching and developing potential drugs, it’s also true that without these negotiated discounts, drug prices would be even higher. Drugmakers are in business to make money, and their drugs are costing more because companies are charging more. They spend money on lobbying for long patent protections and barriers to generics because they want to keep it that way.

For some perspective, consider that a 2016 Pharmaceutical Care Management Association report on the impact of pharmacy benefit managers found that they account for just 4 percent of the cost of branded drugs, while drugmakers account for 88 percent. Given those numbers, it’s hard to buy the drugmakers’ argument that the PBMs are the bad guys.

Trump needs to remember this and avoid the distraction game being played when drugmakers say they’re not part of the problem.

The administration has plenty of reasons to get this right.

Trump himself raised this issue during the 2016 campaign, telling Time magazine that he was “going to bring down drug prices.” He talked it up again during the May Rose Garden speech, saying his administration will bring about “tougher negotiation, more competition and much lower prices at the pharmacy counter. And it will start to take effect very soon.”

Yet even the recent move to tie the price Medicare pays for some drugs to costs in other countries — a change that Trump called “revolutionary” — would impact only some Medicare drugs, and only in some parts of the country. No wonder some Democrats said it wouldn’t be much help.

If Trump and the Republicans really want to win on drug prices, they need to let their actions show they see this as a big issue, because voters surely do. The administration should be using the same tools that PBMs use in the private sector to encourage generic and biosimilar drugs to introduce competition in Medicare and Medicaid instead of relying on new government regulations to try to control prices.

An October Fox News national survey found that health care is the top issue for voters, and of those who see it as the top issue, 58 percent favor the Democratic U.S. House candidate in their district, while just 34 percent favor the Republican. Likewise, a Kaiser Family Foundation poll in September found that just 38 percent of voters were confident that Trump “would deliver on his promise that Americans will pay less for prescription drugs under his administration.”

Trump and the Republicans have to do better than that — for their own sake, and for the sake of Americans who pay too much for prescription drugs.

 

Randal Edgar is the former deputy editorial pages editor at The Providence Journal.

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