President Joe Biden speaks during an event celebrating the start of Medicare’s prescription drug price negotiation at the White House on Aug. 29, 2023.
In the weeks since the White House announced the first 10 prescription drugs subject to Medicare’s new power to negotiate drug prices and signaled their intention to make it a major part of President Joe Biden’s reelection campaign, the normally divided field of Republican presidential challengers has been united in its response: Silence.
Rather than contest a Democratic president’s biggest health care achievement, as they did with a bitter, campaign-defining fight against Obamacare in 2012, Republicans have mostly pretended Biden’s achievement doesn’t exist.
The party’s reluctance to speak about Biden’s prescription drug policy, let alone campaign on an alternative, speaks to just how much the contemporary GOP has abandoned the pretense of interest in an array of burning domestic policy issues where the party’s ideological preferences conflict with public opinion.
That reality has given Biden an opening to freely tout an immensely popular achievement to some of the most reliable and crucial voting blocs in American elections.
“President Biden and Democrats accomplished what Republicans, including Donald Trump and the slate of 2024 Republicans, promised but failed to deliver: lower prescription drug costs,” Ammar Moussa, a spokesperson for Biden’s re-election campaign, said in a statement. “Unlike Donald Trump, President Biden had the courage to stand up to Big Pharma, and thanks to his and Democrats’ leadership, seniors won’t have to choose between putting a meal on the table and their life-saving medication.”
Biden clearly hopes that news of the lower prices, which won’t take effect until 2026, will be a key asset in his bid for a second term ― not least because no Republicans voted for the sweeping bill containing the drug provisions.
Public opinion is also overwhelmingly on Biden’s side. More than 80% of Americans, including 75% of Republicans, support Medicare price negotiation, according to a West Health-Gallup poll released in late August.
“The Inflation Reduction Act is good politics, and it’s good policy,” said David Mitchell, president of the advocacy group Patients for Affordable Drugs. “Any politician who says otherwise is going against the will of the American people.”
GOP presidential candidate Vivek Ramaswamy, a former investor in pharmaceutical and biologics development, expressed skepticism of price negotiation.
Anything But Price Negotiation
HuffPost reached out to the campaigns of former President Donald Trump and the eight Republican presidential candidates who were on the Milwaukee debate stage in August: Florida Gov. Ron DeSantis (R); entrepreneur Vivek Ramaswamy; former South Carolina Gov. Nikki Haley (R); Sen. Tim Scott (R-S.C.); North Dakota Gov. Doug Burgum (R); former New Jersey Gov. Chris Christie (R); former Vice President Mike Pence; and former Arkansas Gov. Asa Hutchinson (R).
Only three candidates ― Ramaswamy, Trump, and Hutchinson ― responded.
In an interview during a campaign swing through Iowa in late August, Ramaswamy, who made his fortune investing in medicines that could eventually be subject to Medicare price negotiation, panned Biden’s policy while declining to say whether he would try to repeal it.
“That narrow action is not super well thought out,” Ramaswamy said. “The use of the word negotiation is a misnomer, when in fact you’re just negotiating with a single party.”
Pressed on whether he would pursue repeal, Ramaswamy replied: “I’m not going to flash freeze the status quo and then respond to one narrow piece of legislation because it all works in concert, and if I’m taking on healthcare, it’s not going to be picking around the edges of it.”
Ramaswamy prefers to reduce the Food and Drug Administration’s regulation of drugs and biologics, which he believes limits competition by making it too expensive for new treatments to get to market. He also wants to “dismantle” the Center for Medicare and Medicaid Services, which runs Medicare and Medicaid, by getting more seniors to sign up for privately managed Medicare Advantage plans.
Hutchinson and Trump’s campaigns were the only other ones to respond to inquiries about pharmaceutical policy.
As an example of his approach to tackling pharmaceutical costs, Hutchinson cited a 2018 law he signed authorizing the state government to license and regulate pharmacy benefit managers, or PBMs ― the middleman companies that manage health insurers’ prescription drug plans. PBMs claim they provide a service by negotiating lower rates from drug manufacturers, but critics believe that the highly concentrated industry pockets the savings it negotiates at the expense of consumers and independent pharmacists. (There continues to be bipartisan support in Congress for reining in PBMs at the federal level.)
“As Governor, I took decisive action by signing legislation that reformed PBMs, effectively lowering drug prices for Arkansas residents,” Hutchinson said in a statement to HuffPost.
The Inflation Reduction Act’s Medicare negotiations approach is constitutionally precarious and risks unintended consequences that could stifle research and innovation.Former Arkansas Gov. Asa Hutchinson (R)
Hutchinson expressed opposition to Biden’s price negotiation plan without explicitly stating whether he would seek to repeal it ― or what kind of other reforms he would try to enact as president.
“While it’s essential to find ways to alleviate the financial burden on Americans, the Inflation Reduction Act’s Medicare negotiations approach is constitutionally precarious and risks unintended consequences that could stifle research and innovation,” he said.
While Pence did not respond to HuffPost, he has previously spoken critically about Biden’s policy. “I would have concerns about, ultimately, being able to use the power of the government to impose price controls under the free market,” he told Semafor in late August.
Trump’s campaign referred HuffPost to a June campaign video in which Trump promised to re-issue a now-shelved executive order that “will tell Big Pharma that we will only pay the best price they offer to foreign nations, who have been taking advantage of us for so long.”
Trump suggested that a revived version of the September 2020 “most favored nation” order, which applied to Medicare Part B drugs administered in doctor’s offices and the Part D drugs purchased at pharmacies, would provide Americans savings at the expense of patients in foreign countries that purchase U.S. drugs.
“They should have never rescinded my original Executive Order. It just shows you the power of Big Pharma. But this will force Big Pharma to RAISE prices on foreign countries and REDUCE prices very substantially for American Patients,” he said. (The campaign’s transcript of Trump’s remarks capitalizes certain words.)
The Biden administration indeed withdrew Trump’s executive order, but only after multiplefederal judges blocked the order from taking effect.
Sen. Charles Grassley (R-Iowa), right, consults Sen. Ron Wyden (D-Ore.) before a 2019 hearing on prescription drug prices. Their bill to address the problem never got a floor vote.
Trump’s Broken Campaign Promise ― And Legislative Failure
But while Trump, unlike his GOP rivals, is running explicitly on taking on Big Pharma, he too has declined to address Biden’s legislation empowering Medicare to negotiate lower prescription drug prices.
That could be because, as president, Trump abandoned his 2016 campaign promise to enact the same policies. In the months after Trump’s November 2016 election win, he stood by the policy, fuming that the pharmaceutical industry was “getting away with murder.” By the time he met with top pharmaceutical executives in February 2017, however, he apparently changed his mind about the policy and never seriously pursued it as president.
Trump’s embrace and prompt abandonment of Medicare drug price negotiation were typical of his on-and-off commitment to tackling drug affordability. The inconsistency of his approach ultimately undermined his results.
“In general, the Trump administration was actually quite proactive here, and they worked with Congress to try to lower the costs for seniors and to establish a benchmark for paying for drugs that would be lower than what we otherwise pay,” said Rena Conti, a Boston University business school professor, who specializes in prescription drug policy. “What happened, however, is that they were unsuccessful in pursuing these policies.”
As president, Trump used the Executive Branch to take a number of steps to reduce prescription drug costs. For example, in 2017, the Trump administration proposed a rule that would reduce Medicare’s payments to hospitals for drugs that those hospitals obtained at a discounted rate, effectively saving Medicare money. Hospitals’ trade associations sued to overturn the rule, resulting in a July 2022 opinion by the U.S. Supreme Court that upheld lower courts’ decisions striking it down.
Trump also gave his blessing to a bipartisan prescription drug reform bill spearheaded by Sens. Charles Grassley (R-Iowa) and Ron Wyden (D-Ore.), who were then, respectively, the chair and ranking member of the Senate Finance Committee. The 2019 bill would have, among other things, required drug makers to provide rebates to the federal government for drugs covered by Medicare that grew more than the rate of inflation; capped out-of-pocket drug costs for Medicare beneficiaries; and required PBMs to adopt greater price transparency.
After the bill advanced out of the Senate Finance Committee in a bipartisan vote in September 2019, then-Senate Majority Leader Mitch McConnell (R-Ky.) never scheduled it for a vote on the Senate floor.
Democrats blamed McConnell ― and, by extension, Trump, for failing to lean on his GOP partners in Congress to pass a bill. In March 2022, even Grassley admitted that pharmaceutical reform might only be possible with Democrats in charge of Congress.
Theo Merkel, a former special assistant for economic policy to Trump and a key figure in the administration’s pharmaceutical policymaking, faults Democrats for insisting on the inclusion of rebates for drug costs that exceeded the rate of inflation. “The cap on inflation alienated many from the other major reforms on which there was a lot of consensus,” said Merkel, who now runs the private health reform initiative at the Paragon Health Institute, a conservative think tank.
Trump speaks before signing executive orders on prescription drug prices on July 24, 2020. His failure to pass legislation undercut his impact on prescription drugs policy.
A Flurry Of Executive Orders
Absent drug price legislation, Trump scrambled to act unilaterally to lower drug prices in the final months of his presidency.
On a single day in July 2020, Trump signed three executive orders to reduce drug prices.
The first order required community health centers that serve low-income communities to pass along to patients the savings that they receive on bulk purchases of insulin and EpiPens. A second order cleared a path for the importation of cheaper drugs from foreign countries. And a third order sought to have PBMs forfeit their savings to patients.
And, of course, in September 2020, Trump proceeded with his most-favored nation executive order tying Medicare drug prices to the lowest rates abroad.
But executive orders are inherently less durable than legislation. Trump’s actions were hobbled by legal and implementation challenges from the start.
The most-favored nation order stalled out in federal court. And Biden rescinded Trump’s community health center and pharmacy benefit manager executive orders. (Unlike Biden’s price negotiation, the PBM proposal was projected to increase federal spending by $177 billion.)
Trump’s order creating a process for foreign drug importation remains in place, but it is unclear if or when the federal government will grant the waivers to state governments seeking to take advantage of the rule. Under DeSantis’ leadership, Florida is suing Biden’s FDA for failing to, thus far, approve Florida’s November 2020 request for importation rights.
Meanwhile, Biden’s Inflation Reduction Act incorporated the Grassley-Wyden bill’s inflation ceiling while also empowering Medicare to eventually negotiate the prices of at least 20 drugs a year, capping Medicare beneficiaries’ annual out-of-pocket costs at $2,000 and capping monthly out-of-pocket costs for insulin at $35.
In general, the Trump administration was actually quite proactive here and they worked with Congress to try to lower the costs for seniors and to establish a benchmark for paying for drugs that would be lower than what we otherwise pay. What happened however is that they were unsuccessful in pursuing these policies.Rena Conti, prescription drug policy expert, Boston University
Price negotiation alone is projected to save the federal government more than $100 billion over a decade, slightly more than the Grassley-Wyden bill would have saved. The IRA’s caps on out-of-pocket, which are lower than in the bipartisan bill, are projected to save 18.7 million seniors about $400 each per year.
Merkel encourages the next GOP president to repeal the price negotiation part of the law and preserve out-of-pocket cost caps while advancing “other reforms that would push drug prices lower without depending on political appointees and bureaucrats to determine which drugs have value and how much.”
Some Republicans evidently believe that Merkel’s position is smart politics. McConnell, for example, has railed against Biden’s policy of “prescription drug socialism,” warning that it will result in the development of hundreds of fewer drugs. And House Republicans plan to hold a hearing later this month on how the IRA’s “price setting scheme means fewer cures for patients.”
Even if the next Republican presidential nominee sides with advisors who see drug price negotiation as a vulnerability for Biden, though, there are practical obstacles to repealing that provision of the IRA alone. The law uses savings that the federal government is due to get from negotiating lower prices to finance the caps on out-of-pocket costs that provide direct benefits to consumers, Conti noted. Any repeal effort that preserves the out-of-pocket caps would presumably require a substitute source of revenue.
“You can’t disentangle one part and leave the rest,” she said. “The Biden administration absolutely has the advantage.”