You could almost wallpaper a coat closet with presidential executive orders involving the healthcare industry and Big Pharma. Earlier this week, President Trump signed an EO that would require the government to buy American when it comes to medical supplies. This comes on the heels of four – yes four – executive orders signed in July, regarding prescription drug pricing. Despite the paper trail, little has changed regarding drug prices in the U.S. The fight is indicative of an abusive relationship between President Trump and American pharmaceutical manufacturers – praising their brilliance and ingenuity at times and slapping them down for overcharging American citizens at others.
Kiss, Kiss, Slap, Slap
Thus far, President Trump has not prevailed in his efforts to bring down drug prices for the average American, but it isn’t due to a lack of energy. He’s been in the ring with Big Pharma since he took office. However, his progress to date demonstrates little more than a mighty effort to push a string up a hill.
Of the four executive orders, the one he calls “the granddaddy of them all” is still being negotiated. This regulation involves what Mr. Trump calls “favored nation status” which means unless the drug companies can come to the table with a reasonable plan to lower costs, they will be forced to charge Americans the lowest price being paid for that drug across the globe. It’s a “lowest bidder wins” scheme, and it is doubtful Big Pharma can or will agree to that.
They have until noon on August 24 to counter this EO with another plan. Thus far, pharmaceutical executives have signaled fierce opposition to Mr. Trump’s orders. Still, eventually, they will have to get back in the ring with the president – perhaps with a peace offering that they can live with, but that will also benefit consumers.
The president has rightly targeted a populist issue. More than 131 million people use some type of prescription medication. This means 66% of all adults pay for a pharmaceutical. President Trump made a campaign promise to lower prescription drugs in the last presidential election, and with voters going to the polls in just a few months, he wants to be able to say he kept that promise.
For the most part, the recently-signed EOs were part and parcel of the Department of Health and Human Services (HHS) Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs, which was released back in 2018. This signifies that there is not much new here, but by signing the executive orders, Trump puts Big Pharma on defense. Since the drug companies have thwarted the president at every turn, he’s decided to play “The Art of the Deal” and like it or not, Big Pharma will have to go another round with him. In his executive order signing ceremony, the president said:
“If these talks are successful, we may not need to implement the fourth executive order, which is a very tough order for them. Very tough. And I understand that. And we have a lot of respect for our great pharmaceutical companies, drug companies. We have a lot of respect for them. So, we’ll see what they have to say on Tuesday. Maybe they have an idea that’s good, but it’s got to be very substantial. They’re actually in favor of the rebate rule — the rollback — because they say that’s people getting money that aren’t even doing anything for it — and bigger money than they’re getting, I believe. If they are not, the order will be implemented if we don’t do a deal or agree to something.”
In issuing this statement, the president puts forth a threat and a promise. To wit, the drug companies had better come to the bargaining table with something or else. Perhaps this is the reason the White House has yet to post the text of the executive order in the federal register. He’s keeping his hand close, playing the odds, squeezing the drug manufacturers, and using leverage to get the best deal he can for the American people. Whether Mr. Trump will be able to come to an agreement with Big Pharma before election day remains unclear, but if he fails – it won’t be for lack of effort.
Read more from Leesa K. Donner.