The health care debate in Washington right now is all about the future of Obamacare. But President-elect Donald Trump started his press conference Wednesday by endorsing a longtime Democratic health care priority: regulating drug prices.
“There's very little bidding on drugs,” Trump said in his opening remarks. “We're the largest buyer of drugs in the world. And yet we don't bid properly. We're going to start bidding.”
What Trump seems to be talking about there is a policy he’s spoken in support of before: allowing Medicare to negotiate drug prices, which federal law currently prohibits. This means that Medicare has to pay whatever prices pharmaceutical companies set.
This is one area where Trump and President Obama are in agreement: that it would be good if the federal government negotiated down the price of the drugs that Medicare buys. “If we want to control prices for consumers more, then the marketplace by itself will not do that,” Obama told Ezra Klein and me in our interview on Friday. In his budget proposals, Obama has repeatedly supported allowing Medicare to negotiate drug prices.
Allowing Medicare to negotiate drug prices has long been a priority of Democrats; many were furious when, in 2003, Medicare’s new drug benefit passed and did not include that authority. (You can listen to our recent podcast on drug price negotiation to learn more about that.)
Most Americans like this idea too: Polling from the Kaiser Family Foundation shows that 93 percent of Democrats and 68 percent of Republicans support the idea of the government negotiating drug prices.
So why hasn’t it happened? Mostly for a reason that Trump himself pointed out: “Pharma has a lot of lobbies, a lot of lobbyists, a lot of power.” Legislators on both side of the aisle have not made a serious attempt to regulate drug prices because pharmaceutical companies are an overwhelmingly powerful interest in Washington. PhRMA, the main trade group for drugmakers in DC, added $10 million to its war chest this fall, girding for a battle over pricing.
Democrats didn’t take on drug pricing in the Affordable Care Act because they felt they couldn't succeed at expanding coverage if they also had to fight a fierce battle with drug companies. Whether Trump is ready to stand up to those interests — and get legislators to go along with them — remains to be seen.
Read more: Here’s a long explainer on why American drug prices are so high — and what trade-offs we’d need to make to get them lower.