March 31
Sarah Karlin-Smith
Pharma stayed out of the bruising fight over Obamacare repeal, but the bill’s demise could turn into the industry’s worst nightmare: a big bipartisan fight over drug prices, with President Donald Trump leading the charge.
Trump, who has repeatedly promised action on drug prices, is looking for a policy win after the repeal debacle — and drug pricing is an issue that Republican and Democratic voters care about.
Drug industry lobbyists, financial analysts and consumer advocacy groups all expect the drug pricing debate to heat up, after the repeal effort collapsed in a heap of failure and finger-pointing. A Wednesday confirmation hearing for Trump’s nominee to run the FDA, Scott Gottlieb, could give Democrats who favor pricing reform a chance to test drive their ideas.
“Bills on drug pricing are going to continue to fall like rain since we’re past [Obamacare repeal],” said Meghan Scott, executive director of the Coalition for Affordable Prescription Drugs.
“The drug industry should be concerned Congress will turn their guns on them,” one industry lobbyist said.
But taking on the drug industry — no matter how much the public supports it or Trump tweets about it — isn’t easy. It requires bipartisanship — a scarce commodity in Washington these days — and few industries are as capable as pharma when it comes to beating back policy threatening their bottom line. Just months ago, the pharmaceutical lobby eviscerated an Obama administration bid to test new ways for Medicare to pay for expensive drugs like chemotherapy. And the industry over the last year amassed an additional $100 million in preparation for a battle over drug prices.
Trump has sent mixed signals on what comes next in health care, whether it’s trying again to rally GOP on Obamacare repeal, reaching across the aisle on reform, or letting the Affordable Care Act “explode.” But he’s also come back fairly consistently to the idea that drug prices are too high and that the industry is “getting away with murder.”
He’s had some discussions, both in person and by phone, with leading Democrats on drug pricing. And if Trump decides he doesn’t want to work with Democrats — or they with him — GOP lawmakers also have some ideas about speeding up drug approvals, particularly for cheaper generics, he could throw his weight behind.
Several proposals already on the table, like allowing cheaper drug importation from Canada or giving states more flexibility to manage Medicaid drug costs, have a history of bipartisanship in Washington and state houses. There are a few bipartisan must-pass health bills this year that could become the vehicles for drug cost measures, including reauthorization of the Children’s Health Insurance Program and reauthorization of industry fees funding the FDA.
Just a few days after the repeal bill died, Democrats in both chambers packaged together a bill rounding up some of their preferred ideas for addressing drug prices. Senate Majority Leader Chuck Schumer and House Minority Leader Nancy Pelosi also sent Trump a letter on Thursday encouraging him to work with Democrats on “the soaring costs of prescription drugs,” reminding the president he’s regularly raised the issue.
“I think that there is every reason to believe that drug pricing legislation is going to get more momentum,” another drug lobbyist said this week as the White House and Congress moved to regroup. “Trump is already saying he wants to work with Democrats, he wants to win things, he’s happy to be a populist and not necessarily work with Republicans.”
Democratic Reps. Elijah Cummings and Peter Welch, who met with Trump in the White House two weeks ago on drug pricing, said they’re starting to hear more support from Republican colleagues, who have historically been protective of the industry.
“I have a lot of Republicans who come up to me and say, ‘You are on the right track. I can’t be with you openly, but you are on the right track,’” Cummings said. “Because they know their constituents are affected by this.”
Voters regardless of party have supported some of Trump’s most prominent ideas on drug pricing, including government negotiations and allowing Americans to import drugs from Canada. And in January, a Kaiser Family Foundation poll found most Americans, including 55 percent of Republicans, said lowering the cost of prescription drugs should be a top priority for Trump and Congress.
There are “not a ton of issues” that draw such widespread support, and this would give Trump a chance to deliver a victory for his base, said Ben Wakana, executive director of Patients for Affordable Drugs.
“We think Trump’s interest in achieving something on drug pricing remains strong and should not be discounted,” Terry Haines of investment firm EverCore ISI wrote to investors this week.
Some of Trump’s policies won’t win much support from Republicans in Washington — even Gottlieb and HHS Secretary Tom Price oppose negotiations and importation. But Republicans are starting to line up behind some market-based proposals to address drug pricing. For example, the House Oversight Committee recently held a hearing on a controversial tactic the brand drug industry uses to prevent generic competition. And there’s bipartisan legislation in the House and Senate addressing obstacles to generic competition in the wake of massive prices increases for older treatments, like the EpiPen.
“I think you have a number of Republicans who are concerned particularly about competition and want to make sure there aren’t real impediments to competition out there,” said Rodney Whitlock, a former aide to Sen. Chuck Grassley who lobbies for the Campaign for Sustainable Rx Pricing.
Congress may also get a push from Republican governors for new flexibility to manage drug costs in Medicaid, and the Trump administration may act unilaterally on the issue. Trump’s new CMS administrator, Seema Verma, is “actively encouraging all kinds of different waivers and encouraging new ways to save money,” said Mark Merritt, CEO of the Pharmaceutical Care Management Association, the main lobby for pharmacy benefit managers.
