It has been two months since the president released his road map for lowering drug costs that seems to lead nowhere, and about a month since he predicted the “big drug companies” would announce “voluntary massive” price cuts. Here’s where things stand:
A congressional investigation has found that the drug company Novartis got more out of its $1.2 million payment to Mr. Trump’s “personal attorney” Michael Cohen than had been known. Meanwhile, several other drugmakers defied Mr. Trump’s lofty prediction by raising their prices substantially, while his administration shot down a proposal that would have helped individual states lower their drug costs.
Taken together, the developments help explain why, a year and a half after Mr. Trump took office, prescription drugs cost more than ever.
Let’s start with Novartis: When a lawyer for Stephanie Clifford, the pornographic-film star suing Mr. Trump, revealed that the drug company was among those who had made payments to Mr. Cohen after the election, Novartis executives insisted they’d had only one meeting before concluding that Mr. Cohen didn’t know enough about health care policy to be helpful. But Senate Democrats have since found that the company actually had several meetings, that drug-pricing policies were on the agenda and that a number of proposals Novartis pushed for made it into the White House plan.
For his part, Mr. Trump made a show of chastising the industry on Twitter when several drugmakers raised their prices this month. He called out Pfizer specifically, saying the company “should be ashamed” of itself. The tweet led to a phone call between the company’s chief executive and the president, after which Pfizer agreed to hold off on those price increases for six months, or until the administration had a chance to put its road map into action.
Mr. Trump said the concession was “great news for the American people,” but it might actually be more of a coup for the pharmaceutical industry. By tying its actions to the president’s initiative, Pfizer now has both a stick and a carrot to wield: implement a policy that benefits the industry and maybe the company will abandon its price increases; create one that hurts the industry and the company may raise prices once again. In any case, none of the other drugmakers that raised their prices followed Pfizer’s lead, meaning that those increases are all still in place.
These machinations would be troubling enough by themselves. But the administration seems intent on adding insult to injury, by blocking states from carrying out a policy that might actually make a dent in the drug-cost problem.
That proposal would have opened the door on allowing state Medicaid programs to deny coverage for certain medications. Private insurance companies, the Department of Veterans Affairs and many other countries with drug prices far lower than ours already do this, but Medicaid is required to cover all federally approved medications, no matter how much they cost or how well (or poorly) they work. If states were allowed to circumvent this rule, they would be able to avoid paying for pricey new drugs that aren’t necessarily as effective as cheaper versions already on the market. They would also have much more negotiating power because they would be able to walk away from the table for drugs that were overpriced.
Massachusetts asked the administration for a waiver that would allow it to try this approach. But in June, the Centers for Medicare and Medicaid Services, the Health and Human Services agency that regulates these two insurance programs, rejected that proposal and issued a notice to all states, reiterating that all Medicaid programs must cover all drugs.
“It takes away a substantial tool that a lot of states were hoping to use,” says Rachel Sachs, a law professor and drug policy expert at Washington University in St. Louis. It also points to a hypocrisy, she says. “They’re permissive when it comes to work requirements that put added burden on the vulnerable, but protective when it comes to measures that would strain the pharmaceutical industry.”
It’s unclear where we go from here. The administration’s road map for lowering drug costs was short on details about when or how any of its provisions might take effect. And while there’s no telling what Mr. Trump discussed with Pfizer that caused it to temporarily halt planned price increases, the exchanges between Mr. Cohen and Novartis hardly inspire good faith. In fact, if the industry is “getting away with murder,” as Mr. Trump once claimed, it stands to reason that at this point, it’s doing it with the president’s help.
The good news is that elections are coming, and lawmakers know that Americans are enraged by soaring drug costs. By keeping the pressure on, we may see real change yet.
—The New York Times, July 17, 2018