Believe it or not, there is a chance President Trump and congressional Democrats can reach an agreement this year to limit the growth in Medicare drug prices. It certainly won’t be easy, given the toxic relationship the president and Democrats have built up in just the past few weeks. But both sides have good reasons to make a deal, and they may not be that far apart on the substance of an agreement.
After all, lowering drug prices has been on the Democratic agenda for years while Trump has been talking about the idea since the early days of his presidential campaign. And, as with many issues, he has been extremely flexible about how to do it. At times, he’s even seemed to embrace proposals such as allowing Americans to import drugs directly from Canada or even having government negotiate prices with drug makers—ideas that have strong support among progressive Democrats.
In his first state of the union address, Trump highlighted the subject: “One of my greatest priorities is to reduce the price of prescription drugs. In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.”
And the Administration has indeed proposed several initiatives aimed at lowering drug prices. They include a requirement that drug makers disclose prices in their direct-to-consumer marketing. Most ambitious, however, was a proposal by the Department of Health and Human Services to tie US prices for Medicare Part B drugs to the prices in other developed countries that are nearly always lower.
The HHS plan is far from ideal. It has many technical problems. And Part B drugs, such as vaccines and chemotherapy, account for a relatively small share of all Medicare drug spending. Still, the idea of benchmarking US prices to those in other countries has significant Democratic support.
Indeed, earlier this month, Sen. Bernie Sanders (I-VT) and two dozen liberal House Democrats introduced a package of bills to lower drug prices. Two of the three are similar to Trump Administration ideas, at least conceptually. The bills would:
- Peg the price of prescription drugs in the US to the median price in Canada, the United Kingdom, France, Germany, and Japan;
- Direct the HHS Secretary to negotiate lower prices for Part D prescription drugs
- Allow patients, pharmacists, and wholesalers to import drugs from Canada and other major countries.
Of course there are differences between the more cautious Trump versions of these ideas and the more expansive Democratic ideas. For example, Sanders would tie all US drug prices to an international benchmark while Trump would limit the idea to Part B drugs only. Still, it is not be hard to see a compromise.
Motivating a deal
Reaching agreement may be tougher in the Republican-controlled Senate, where key lawmakers have close ties with the pharmaceutical industry. But even there, some lawmakers are looking for deals. For example, the Senate Finance Committee’s new Republican Chairman, Chuck Grassley of Iowa, has introduced a bill with Minnesota Democrat (and possible presidential hopeful) Amy Klobuchar to allow Americans to buy prescription drugs from approved pharmacies in Canada.
OK, a drug deal seems crazy. After all, the government has been partially shut down for more than a month over a largely symbolic argument over a border wall, and the House speaker and the President can’t even agree on whether Trump can give his state of the union address in the House chamber next week.
Yet, in some ways the current battles over border security and the government shutdown may motivate both Trump and congressional Democrats to show voters that they can reach agreement on an important consumer issue.
The drug industry is worried. One lobbyist told me recently that drug makers live in fear that Trump will throw them under the bus and cut a deal with Hill Democrats. The industry is gearing up a major lobbying effort to block a deal, while some firms are quietly working with lawmakers to craft compromise legislation that would allow some benchmarking of prices.
There are many good reasons why a deal may not happen: The mercurial president may walk away from a perfectly reasonable compromise or Democrats may not be willing to give a weakened Trump a major political talking point for the 2020 campaign. The two sides may not make a deal, and indeed probably won’t. But they could.
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