Pelosi’s Drug-Price Bill Can Still Hurt Trump Even if It’s DOA
(Bloomberg Opinion) -- Americans pay the highest drug prices in the world, and it’s not even close. So it should be good news that House Democrats (and two rogue Republicans) passed a historic bill Thursday that would lower these costs — plus, cut federal health spending, lower insurance premiums, and expand Medicare benefits — by empowering the government to negotiate with drugmakers.
Don’t get too excited, though. The bill will most certainly die on arrival in the Republican-controlled Senate — and if by some miracle it doesn’t, President Donald Trump has threatened to veto it.
It's not surprising that Trump doesn't want to hand House Speaker Nancy Pelosi a policy win as she works on impeaching him. Still, in vowing to help block it, he is effectively handing a critical populist issue to Democrats at a time when his own initiatives are flagging. It wasn’t so long ago that the president was calling for government price negotiation on the campaign trail and saying that Big Pharma was "getting away with murder." There’s a sharp contrast between Trump’s rhetoric, his actions, and his opposition to this bill, and it’s likely to hurt him on the campaign trail.
Even Republicans strongly support aggressive government action on high drug prices, up to and including government negotiation. It’s not an abstract or distant issue for Americans, many of whom report skipping or rationing prescription drugs due to price.
Trump recognizes this and has unleashed a variety of speeches and policy plans aimed at the high cost of medicines, but he's accomplished little. Some combination of Republican hesitance, pharma lobbying, legal troubles, and a soap-operatic feud between top health officials have collapsed several once-touted initiatives. And the administration’s frequent assertion that drug prices have declined under its watch is only valid if you use a particular flawed measure.
The administration also can’t seem to figure out exactly how far it’s willing to go. There’s no better example than a proposed international price index, the most potent of the many Trump initiatives that have made little tangible progress. The proposal would tie the price for certain expensive drugs used by Medicare beneficiaries to lower costs abroad.
It’s heady stuff for a Republican administration, and it is remarkably similar in many ways to the House bill, which includes a similar internationally-derived price cap but extends it to more medicines and the millions of Americans with employer coverage. Instead of working with Pelosi on a bill that would very much fulfill Trump’s stated goal of bringing prices substantially down, the White House is endorsing a much milder Senate alternative that wouldn’t.
There are legitimate arguments against Pelosi’s bill. It could reduce the number of new drugs that hit the market as it crimps pharma revenue and the potential return on research investment. Even if you believe that risk is overstated or a necessary tradeoff, the bill arguably doesn’t do enough to create or preserve incentives to develop valuable medicines.
None of those points will sound especially compelling to most voters when compared to the opportunity to cut the price of costly medicines in half.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Max Nisen is a Bloomberg Opinion columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.
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