By Tory Newmyer
March 16, 2017

Should Big Pharma be nervous? President Trump burnished his populist credentials on the campaign trail by regularly bashing the industry, pledging if elected to bring down drug costs. He’s revisited the issue irregularly as president. But as the Republican push to repeal Obamacare sputters on Capitol Hill — in part because the GOP’s replacement plan strips coverage while squeezing no new savings from corporate interests — drug companies could find themselves in the crosshairs. Trump so far has avoided scrubbing in for detailed negotiations. But with the Republican bill in need of major surgery, the politics for the president are straightforward: Going after the industry, one of the country’s least popular, would fulfill a promise he made to cash-strapped voters; it would allow him to highlight the unsavory deal the Obama administration cut with the sector to buy its neutrality during the original consideration of the law; and it would generate tens of billions of dollars Republicans could use to preserve some coverage for the estimated 24 million who’d lose it under their initial proposal.

On the Hill, where drug companies have spread some $52 million in campaign contributions over the last decade, the industry isn’t necessarily better protected. Republican leaders may not be eager for a pound of flesh. But back in January, during voting on a budget resolution, 12 Republican Senators voted with a majority of Democrats for an amendment to allow the commercial importation of cheaper medicine from Canada, a bête noire for pharma. Thirteen Democrats voted against the proposal, and it fell short. Since, however, Sen. Bernie Sanders has introduced a standalone version that adds some safety controls, and four of those 13 Democrats have joined him as cosponsors. The rest would likely come around, too, if Sanders offers it as a poison-pill amendment to an Obamacare repeal package. Senate Republicans did just that in 2009, when 23 of them — including Mitch McConnell, Lamar Alexander, and John Cornyn, all GOP leaders who count themselves stalwart drug industry allies — backed an importation amendment in an attempt to turn the sector against the entire package and thereby sink it.

It’s also possible the current healthcare debate never makes it that far. Speaker Paul Ryan on Wednesday acknowledged the current House plan can’t muster a majority in his chamber. Other conservatives are urging a wholesale restart. And Trump appears increasingly impatient to move on to tax reform (“I want to get to taxes. I want to cut the hell out of taxes,” he said at a rally in Nashville last night). Yet even if the Obamacare repeal effort implodes, the threat to the industry won’t entirely recede. Later this year, Congressional Republicans have to renew a measure allowing the Food and Drug Administration to collect fees from drug makers to fund the drug approval process. Lawmakers typically pass that five-year authorization without adding legislative extras. But this year, Sanders will likely try to seize the opportunity to push his importation proposal if it can’t attach to a Republican healthcare package. “Republicans’ desperation to get this done should be scary to every healthcare industry stakeholder,” one top Democratic health aide says. “And pharma is a fat, juicy target that’s unpopular, and the president is 100% bought into cutting them. So I think they should be nervous.”

Tory Newmyer


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