“Donald Trump mentioned he was going to permit Medicare to barter drug costs. He by no means did. We did.”
Vice President Kamala Harris on the ABC Information presidential debate, Sept. 10
Since Vice President Kamala Harris entered the presidential race, she and former President Donald Trump have sparred over their approaches to reducing prescription drug prices. Harris has described this as an essential marketing campaign promise that Trump made however didn’t ship on.
“Donald Trump mentioned he was going to permit Medicare to barter drug costs,” Harris mentioned throughout the ABC News debate on Sept. 10 in Philadelphia. “He by no means did. We did.”
She previously told CNN that Trump’s promise to pursue such negotiations “by no means occurred” throughout his administration.
In the course of the 2016 presidential marketing campaign, Trump repeatedly promised, if elected, to take steps to permit the federal government to barter drug costs. He by no means enacted such a coverage in workplace. The Trump administration pursued smaller, momentary applications aimed toward reducing drug prices.
Nonetheless, consultants say the impact of Trump’s strikes fell far in need of the anticipated impact of the Medicare drug worth negotiation program included in President Joe Biden’s Inflation Discount Act and of what Trump promised.
Medicare Drug Worth Negotiation Coverage, Defined
The Inflation Discount Act — a sweeping local weather and well being care regulation Biden signed in August 2022 — included a measure authorizing the Facilities for Medicare & Medicaid Companies to negotiate Medicare prescription drug costs straight with pharmaceutical firms.
“The thought behind drug worth negotiation is that Medicare can use its shopping for energy to get a greater worth than what’s at present being negotiated for these medicine,” according to Juliette Cubanski, deputy director of the Program on Medicare Coverage at KFF, a well being info nonprofit that features KFF Well being Information.
Medicare covers greater than 67 million Individuals, giving it monumental potential affect over costs for U.S. medicine and medical companies.
In August, CMS introduced it had secured vital reductions on the listing costs of 10 medicine due to its negotiations. These reductions ranged from a 38% discount for blood most cancers medicine Imbruvica on the low finish to a 79% lower for diabetes drug Januvia on the excessive aspect. (Record costs and the costs Medicare drug plans pay can differ.)
The brand new costs are anticipated to save lots of Medicare $6 billion within the first yr, with Medicare beneficiaries set to save lots of an extra $1.5 billion in out-of-pocket prices, in accordance with the White Home.
These new costs aren’t set to take impact till 2026 — although Biden and Harris have highlighted different features of the regulation which might be bringing down drug prices sooner, reminiscent of a $35-a-month out-of-pocket price cap on insulin for Medicare enrollees and a $2,000 yearly out-of-pocket spending cap for Half D medicine efficient in January. The Half D program covers most generic and brand-name outpatient pharmaceuticals.
CMS will begin negotiating costs for the subsequent group of medicine — 15 a yr for the subsequent two years — in early 2025, and people talks will proceed yearly at the very least by way of the top of the last decade.
Trump’s Guarantees Versus His Actions
As a presidential candidate in 2016, Donald Trump pledged to pursue prescription drug worth negotiation applications — and typically overstated such a coverage’s energy to chop costs.
Throughout multiple campaign rallies and media interviews that yr, Trump urged permitting the federal government to barter drug costs straight with producers would save $300 billion a yr, a declare a fact-checker said was “absurd” then.
“The issue is, we don’t negotiate,” Trump mentioned throughout an MSNBC town hall in Charleston, South Carolina, on Feb. 17, 2016. “We’re the biggest drug purchaser on the earth. We don’t negotiate.” He went on to say: “If we negotiated the value of medicine, Joe, we’d save $300 billion a yr.”
Equally, at a Feb. 24, 2016, rally in Virginia Seaside, Virginia, Trump reiterated his curiosity in making this alteration. “For those who bid them out we’ll save $300 billion … and we don’t even do it. We’re going to do it.” The pharmaceutical trade would push again, he mentioned, however he added: “Belief me I can do it.”
In workplace, nevertheless, Trump backed away from these guarantees, rejecting a bill spearheaded by then-Home Speaker Nancy Pelosi (D-Calif.) to authorize such negotiations. The Democratic-led Home in the end handed that laws, although the Republican-led Senate didn’t think about it.
“Pelosi and her Do Nothing Democrats drug pricing invoice doesn’t do the trick,” Trump wrote on X, the social platform then generally known as Twitter.
Trump pursued smaller initiatives that sought to decrease drug prices. One such program, the “most favored nation” mannequin, tried to cap the price of some Half B drugs — these administered in a physician’s workplace or hospital outpatient setting — on the lowest worth paid in sure peer nations with a per capita GDP of at the very least 60% that of the USA.
“Medicare is the biggest purchaser of medicine wherever on the earth by far,” Trump mentioned in asserting this system. “We’re lastly going to make use of that unbelievable energy to realize a fairer and cheaper price for everybody.”
The Trump marketing campaign didn’t reply to an inquiry about prescription drug worth negotiations or probably the most favored nation mannequin.
This system would have began in January 2021 and lasted seven years. CMS officials estimated the federal government would save greater than $85 billion on Half B spending. However a few of these financial savings got here from assumptions that Medicare beneficiaries would lose entry to some Half B drugs underneath the mannequin, with some producers unlikely to promote merchandise on the decrease, international costs.
Trump’s program by no means took impact. Amid lawsuits from a number of drug firms and trade teams, a federal choose stayed the plan in December 2020. The Biden administration scrapped it in 2022.
Even when probably the most favored nation mannequin had been enacted, consultants say it wouldn’t have come near saving Individuals or the federal government as a lot cash because the IRA’s drug worth negotiation provisions. A contemporaneous analysis of Trump’s proposal estimated that 7% of the 60 million Medicare beneficiaries in 2018 would have benefited.
Extra importantly, probably the most favored nation mannequin didn’t authorize the federal government to barter prescription drug costs with producers — the coverage Trump promised to implement.
What Comes Subsequent?
A recent KFF poll exhibits 85% of Individuals, together with greater than three-quarters of Republicans, favor permitting Medicare to barter costs with drug firms.
And reducing drug prices continues to be a key difficulty for each campaigns, with Trump and Harris sparring over all the pieces from the price of insulin to the impact of the Inflation Reduction Act on Medicare spending.
“I’ll decrease the price of insulin and pharmaceuticals for everybody together with your help, not solely our seniors,” Harris informed supporters at an Aug. 16 marketing campaign occasion in Raleigh, North Carolina, promising to increase the IRA’s worth caps.
A Trump marketing campaign spokesperson, in the meantime, beforehand informed KFF Well being Information that the previous president “will do all the pieces attainable to decrease drug prices for Individuals when he’s again within the White Home, similar to he achieved in his first time period.” She offered no specifics.
Trump, nevertheless, has additionally repeatedly promised to repeal elements of the Inflation Discount Act — although he has by no means particularly talked about the drug worth negotiation provision — and to rescind unspent cash. Congressional Republicans have spoken publicly about their intentions to roll again the drug worth negotiation provision.
Even with out legislative modifications, the subsequent president may have the chance to steer Medicare’s prescription drug worth negotiation course of.
“An administration that wishes to be extra lenient on drug firms is likely to be extra lax within the negotiations course of,” mentioned Tricia Neuman, a senior vp at KFF and the chief director of its Program on Medicare Coverage. “Or the administration might maybe be harder than the Biden administration.”
Our Ruling
As a presidential candidate in 2016, Donald Trump promised to let the federal government negotiate prescription drug costs straight with pharmaceutical firms. As president, nevertheless, he as an alternative tried to tie some U.S. drug costs to their prices in different international locations. Drugmakers and trade teams sued, difficult the transfer, and courts blocked it.
Harris, due to this fact, is appropriate that Trump by no means was in a position to open Medicare as much as drug negotiations regardless of his sweeping marketing campaign guarantees.
We charge Harris’ declare True.
Our Sources:
ABC Information, “READ: Harris-Trump Presidential Debate Transcript,” Sept. 10, 2024
Axios, “Hill GOP Sets Sights on Scrapping Drug Price Talks,” Sept. 17, 2024
Facilities for Medicare & Medicaid Companies, “Trump Administration Announces Prescription Drug Payment Model To Put American Patients First,” Nov. 18, 2020
CNN, “READ: Harris and Walz’s Exclusive Joint Interview With CNN,” Aug. 30, 2024
Congress.gov, “H.R.3 – Elijah E. Cummings Lower Drug Costs Now Act,” accessed Sept. 17, 2024
Factbase, “Donald Trump Attends an MSNBC Town Hall in Charleston, South Carolina,” Feb. 17, 2016
Factbase, “Donald Trump in Pawleys Island, SC,” Feb. 19, 2016
Federal Register, “42 CFR Part 513,” Nov. 27, 2020
KFF, “A Status Report on Prescription Drug Policies and Proposals at the Start of the Biden Administration,” Feb. 11, 2021
KFF, “KFF Health Tracking Poll September 2024: Support for Reducing Prescription Drug Prices Remains High, Even As Awareness of IRA Provisions Lags,” Sept. 13, 2024
KFF, “Most People Are Unlikely To See Drug Cost Savings From President Trump’s ‘Most Favored Nation’ Proposal,” Aug. 27, 2020
KFF Well being Information, “5 Things To Know About the New Drug Pricing Negotiations,” Aug. 30, 2023
KFF Well being Information, “Harris Did Not Vote To ‘Cut Medicare,’ Despite Trump’s Claim,” Aug. 20, 2024
KFF Well being Information, “Trump Is Wrong in Claiming Full Credit for Lowering Insulin Prices,” July 18, 2024
Telephone interview with Tricia Neuman, a senior vp at KFF and the chief director of its Program on Medicare Coverage, Sept. 13, 2024
Reuters, “Federal Judge Blocks Trump Administration Drug Pricing Rule,” Dec. 23, 2020
The Washington Publish, “Trump’s Truly Absurd Claim He Would Save $300 Billion a Year on Prescription Drugs,” Feb. 18, 2016
The White Home, “Remarks by President Trump at Signing of Executive Orders on Lowering Drug Prices” July 24, 2020
The White Home, “Remarks by Vice President Harris at a Campaign Event in Raleigh, NC,” Aug. 16, 2024
X, then generally known as Twitter, “@RealDonaldTrump,” Nov. 22, 2019
