What Another Trump Presidency Could Mean for Big Pharma

2024-03-20

Pictured: A collage of Trump, the U.S. Capitol and biopharma/Nicole Bean for BioSpace With President Joe Biden and former President Donald Trump securing their parties’ nominations last week, the stage is set for a redo of the 2020 race between the two candidates. Though the economy, inflation and immigration are the hot-button issues generating the most soundbites, Biden and Trump have also made clear their policy agendas aimed at reducing the high cost of prescription drugs and the power of Big Pharma. U.S. prescription drug prices are significantly higher than in other nations, with prices averaging 2.78 times those seen in 33 other nations, according to a RAND report published last month. When it comes to brand-name drugs, America’s prices average 4.22 times those of other countries. In his State of the Union speech earlier this month, Biden said Medicare “will no longer have to pay those exorbitant prices to Big Pharma,” doubling down on his efforts to curb drug prices and calling for the expansion of the Inflation Reduction Act (IRA) to subject 50 drugs per year to Medicare price negotiations, up from 20 currently. “This year, Medicare is negotiating lower prices for some of the costliest drugs on the market that treat everything from heart disease to arthritis,” Biden said. “It’s now time to go further and give Medicare the power to negotiate lower prices for 500 different drugs over the next decade.” While Trump has been less vocal on the issue of drug pricing than in previous election years, he has made clear his intention to reduce the prices of prescription drugs if he were to regain his seat in the Oval Office. “For many years, Americans have been paying among the highest prices in the world for our prescription drugs, while other countries negotiate sweetheart deals off the backs of America, paying vastly lower prices for the very same drugs from the very same companies,” Trump states in a campaign video. “On Day One of my new term, I will sign an executive order to end this global freeloading on American consumers for once and for all.” Under Trump’s policy in a second presidential term, the U.S. government “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,” according to the campaign video. In addition, the official Trump campaign website contends that as president he lowered drug prices “for the first time in 50 years” and is vowing “fairness through price transparency” in a second term with plans to reduce the price of prescription drugs further. Biden is calling on Congress to expand the IRA’s provisions to increase the number of drugs Medicare can select for negotiation annually. Trump, on the other hand, would issue an executive order forcing Big Pharma to reduce prices “very substantially for American patients.” While the Trump campaign did not respond to BioSpace’s inquiry into his position on the IRA, Kirsten Axelsen, a visiting scholar at the American Enterprise Institute and a policy advisor at DLA Piper, told BioSpace that Trump’s effort to bring down drug prices would mean, possibly, that the U.S. would pay no more than other developed countries for certain medicines. Trump and the IRA As for the IRA under a second Trump administration, Brian Miller, a nonresident fellow at the American Enterprise Institute, told BioSpace that any adjustments would require a statutory change and would be “unlikely” to happen unless the Republicans are able to sweep both the U.S. House of Representatives and Senate in the elections as well. “You might see changes in implementation of the IRA, you might see more transparency of how CMS makes value assessments. Because right now the IRA lacks transparency and how it’s executed,” Miller said. It’s a concern shared by Big Pharma’s lobbying group the Pharmaceutical Research and Manufacturers of America (PhRMA). Alex Schriver, PhRMA’a senior vice president of public affairs, issued a statement last month in response to CMS’ initial price offers for the first 10 drugs negotiated under the IRA. “Government bureaucrats are operating behind closed doors to set medicine prices without disclosing for months how they arrived at the price or how much patient and provider input was used. This lack of transparency and unchecked authority will have lasting consequences for patients long after this administration is gone,” Schriver said. Axelsen said that changes to the IRA would be around the administration of the price controls, which would be a “heavy lift” as it takes a change in law, which is hard to do in a Congress divided by partisan lines. “I could see interest from the Trump administration in scaling back some of the activities that CMS does,” she said. Joel White, a Republican healthcare strategist, told BioSpace that the bureaucracy surrounding the IRA is complicated and not transparent, and he sees the potential for Trump to fire all those CMS staff involved in the Medicare Drug Price Negotiation Program and give savings directly to U.S. consumers without the federal negotiations process under the law. He contends that a new administration could install a premium mitigation strategy to provide some form of relief to consumers. “All these new bureaucrats (have) gone through these hoops and hurdles, where we could just really just, for these older products, get discounts directly to the consumer much more visible,” White said. In his campaign video, Trump said that U.S. consumers are “tired of getting ripped off” and that under his second administration, he will confront the “power of Big Pharma” which will force drug manufacturers to raise foreign prices for medicines while reducing pricing in this country. Last month’s RAND report found that current and future policy proposals may rely on prices in other countries as a benchmark for determining fair U.S. drug prices. That “robust policy discussion” appears to be taking shape in America’s 2024 presidential election season. Tyler Patchen is a staff writer at BioSpace. You can reach him at tyler.patchen@biospace.com. Follow him on LinkedIn.