Tom Price was confirmed overnight by the US Senate to become the next secretary of health of human services. The vote along party lines was largely expected and one of Mr. Price’s first responsibilities will be to head President Trump’s push to dismantle the Affordable Care Act. Mr. Price is expected to work to limit the growth of Medicare and Medicaid. Details regarding possible changes to the programs, which insure more than 100 million Americans remain unclear, but Democrats are worried about what they see as the secretary’s desire to dismantle Medicare. A 2009 op-ed article penned by Mr. Price included the following, “Nothing has had a greater negative effect on the delivery of health care than the federal government’s intrusion into medicine through Medicare.”
There has been much confusion about the Trump administration’s vision for heath care in America. Repeated calls to replace the Affordable Care Act and promises to not dismantle Medicare on the campaign trail are still fresh in American’s minds though Trump has provided few details or proposals. President Trump proposed often that Medicare should be able to leverage its buying power to negotiate better drug prices. Trump presented this idea often on the campaign trail and recently said the following during a January 11 news conference:
I think a lot of industries are going to be coming back. We have to get our drug industry coming back. Our drug industry has been disastrous. They’re leaving left and right. They supply our drugs, but they don’t make them here. To a large extent. And the other thing we have to do is create new bidding procedures for the drug industry because they’re getting away with murder.
Pharma, pharma has a lot of lobbies, a lot of lobbyists and a lot of power. And there’s very little bidding on drugs. We’re the largest buyer of drugs in the world, and yet we don’t bid properly. And were going to start bidding and were going to save billions of dollars over a period of time.
Medicare is currently not permitted to participate in the negotiation of drug prices between pharmaceutical companies and insurance companies that provide Part D prescription drug plans. Many experts believe negotiating the prices of prescription drugs could save Medicare billions though the only government report on the subject, completed in 2007 by the Congressional Budget Office, found the effects would be insignificant.
Trump has seemed to walk back some of his previous campaign rhetoric on this subject and recently told a group of pharmaceutical executives that he would “…oppose anything that makes it harder for smaller, younger companies to take the risk of bringing a product to a vibrantly competitive market. That includes price fixing by the biggest dog in the market – Medicare – which is what’s happening.” White House spokesman Sean Spicer has since clarified that Trump does support Medicare negotiating prescription drug prices.
For seniors in the midst of Medicare open enrollment, which lasts this year from October 15 to December 7, questions remain about how a Trump presidency will affect Medicare. The president-elect made clear his intention to repeal the Affordable Care Act throughout his campaign and has since established a page on his website dedicated to his plans to reshape the nation’s healthcare system. He includes steps to “modernize Medicare” and increase state flexibility with regard to Medicaid. Trump promised throughout his campaign to leave Medicare untouched, though his campaign seems to be leaving the door open to some reforms.
Pharmaceutical stocks have gained in the days since Trump’s surprise victory over Hillary Clinton last Tuesday. President-elect Trump continues to call for a replacement to the Affordable Care Act though he has yet to offer a specific plan nor clarified how he plans to combat the rising medication and health care costs for most Americans. Regardless, any changes have the potential to greatly impact the drug marketplace and the drug price issue is unlikely to go away in the coming years. During the Republican primary presidential campaign, Trump indicated that he was open to having the federal government negotiate directly with pharmaceutical companies to secure lower prices, as other nations such as Canada do. It is unclear if this remains part of Trump’s plan or was merely an idea proposed on the campaign trail.
On Friday, Hillary Clinton announced a plan to address excessive and unnecessary price hikes for prescriptions drugs that have been on the market for a while. Clinton has previously proposed greater regulation of the pharmaceutical industry, including proposals to allow Medicare to negotiate drug prices, cap out-of-pocket costs, restrict direct-to-consumer drug advertising, and speed up the FDA approval of generic drugs.
Clinton’s unveiling of her plan comes on the heels of the national uproar over Mylan’s large price hikes for the Epipen. Clinton proposes a multi-prong plan that involves more direct federal intervention in healthcare pricing increases, diverging from prior U.S. policy and more closely aligning U.S. policy with that in countries such as Canada, France, and Australia.
Clinton’s plan foremost involves the creation of a team of federal health, safety, and antitrust agency officials, with the aim of protecting consumers through greater monitoring of drug price increases. Along with increased monitoring, Clinton advocates for tougher enforcement mechanisms and penalties on companies exhibiting “outlier” price increases.
The second major aspect of Clinton’s plan is allowing the importation of lower-priced drugs from foreign counties. In addition, the plan advocates for increased patient access to treatments through the government purchase and provision of alternative therapies.
Clinton faces major opposition from a current Republican-majority Congress and push back from Big Pharma, who claim the plan will stifle competition and disrupt an already well-performing market.
If elected President, Clinton would be able to circumvent Congress and enact certain aspects of the plan through executive action. This includes authorizing the importation of cheaper generics from foreign countries, a policy measure that is also supported by Donald Trump.