It has been two months since President Donald Trump 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 Trump’s “personal attorney” Michael Cohen than had been known. Meanwhile, several other drugmakers defied 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 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 Trump, revealed that the drug company was among those who had made payments to Cohen after the election, Novartis executives insisted they’d had only one meeting before concluding that 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, 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.
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.