- President Trump met with two Democratic congressmen Wednesday to discuss a draft bill that would allow the government to directly negotiate prices with drugmakers under Medicare, in another sign of the President's interest in taking action on rising drug costs.
- Following the sit down with Reps. Elijah Cummings, D-MD, and Peter Welch, D-VT, the White House released a relatively bland statement saying Trump was interested in working "in a bipartisan fashion to ensure prescription drug prices are more affordable."
- Cummings and Welch, however, gave a bit more color on the meeting, saying Trump appeared enthusiastic about the draft legislation and that he told Health and Human Services Secretary Tom Price to "get it done."
Currently, the government is prohibited from negotiating with drugmakers to lower prices for Medicare Part D beneficiaries. Cummings and Welch's legislation would allow the HHS Secretary to do so. More importantly, however, it would also give HHS the power to set up a formulary of preferred drugs, similar to what private insurers have now. This would boost the government's leverage to extract concessions in return for coverage.
In a much-cited but now decade-old letter to Congress, the Congressional Budget Office estimated giving HHS authority to negotiate prices alone would have only a "negligible effect on Medicare drug spending." Permitting a formulary or other price-setting mechanism, however, would give negotiation teeth and be more likely to lead to savings, the CBO wrote.
On the other hand, a bill such as the one proposed by Cummings and Welch would require the government to decide which drugs patients should receive — a potentially controversial position in a country still very much split on how much of a role government should take in healthcare.
President Trump seemed to support direct negotiation in the past, saying before his inauguration that he wants to create new bidding procedures for government drug purchases. But in the weeks, and now months, after taking office, Trump has been more restrained.
A meeting with top pharma executives in late January appeared to focus more on bringing manufacturing and jobs back to the U.S., and lowering regulations than it did direct price negotiation — although Trump did say drug prices have been "astronomical."
Prices continue to be on the President's mind, however, as evidenced by Wednesday's meeting and an earlier Tweet:
I am working on a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!— Donald J. Trump (@realDonaldTrump) March 7, 2017
While it's not clear what position Trump may eventually take if efforts like Cummings and Welch's legislation gets off the ground, drugmakers should take heed of the President's continued interest. Naming of a candidate to head the Food and Drug Administration, expected to come soon, could offer more clues on the direction Trump hopes to take.