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Trump’s Big Pharma Blunder [1]

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Date: 2024-12-24  

Time and time again on the campaign trail, Donald Trump said he is going to drain the healthcare swamp in Washington, D.C. By announcing his intent to nominate Democratic reformer Robert F. Kennedy Jr. to head the Health and Human Services Department, there is reason to believe that he means what he said before the election. However, he seems to have misfired in one crucial area, and it can cost low-income Americans massively.

This month, President Trump and RFK Jr. dined with Pfizer, Eli Lilly and PhRMA at Mar-a-Largo. Then, later in the month, Trump endorsed their top lobbying priority — regulating Pharmacy Benefit Managers (PBMs), the groups that are responsible for forcing them to lower their prescription drug prices.

Not only did Trump endorse such big government regulations, but he went out of his way to hold a press conference for the drugmakers about this matter at Mar-a-Largo. PhRMA’s lobbyists may frame this issue as a populist one, so Trump likely feels that he is taking on a big corporation while looking out for the little guy,but trust me — this is not the way to drain The Swamp.

With a whopping $24 million on the line (and, to be fair, PhRMA’s money has historically hit Democrats’ campaign coffers more than it has Republicans’), no one spent more money lobbying in the first three quarters of 2024 than PhRMA did on getting PBMs regulated. Who could blame them? These groups are great for the purchasers of prescription drugs but terrible for the drug companies’ profit margins.

As former Democratic Pennsylvania Congressman Jason Altmire put it:

For decades, employers and insurers believed they did not have enough collective bargaining power to negotiate effectively with drug companies, especially with the largest three distributors, which control over 90 percent of the marketplace. That’s why employers and insurers began increasing their leverage by forming PBM collectives to negotiate bulk price discounts and fair drug pricing terms for their customers.

Scott Hague, a board member with the Insure the Uninsured Project, agreed. He said:

Small and medium businesses, like the ones I work with, don’t have the scale to negotiate lower prices from pharmaceutical companies that are the biggest drivers of increasing prices, accounting for 65 percent of the net cost of every prescription. But PBMs have the clout to take on the drug manufacturers, squeeze their profit margins and get a better deal for patients

Even Casey Mulligan, the Chief Economist on President Trump’s own Council of Economic Advisers, understands the value of PBMs. He wrote a Wall Street Journal op-ed in which he wrote, “plan sponsors work with PBMs, despite having no obligation to do so, because they can reduce a plan’s drug costs by half. These savings translate to lower health-insurance premiums and better drug utilization.”

It's shocking to see the free-market espousing Donald Trump endorsing the government interfering in the affairs of private businesses in such an egregious manner. Trump may have been misled by the been millions of dollars' worth of ads floating around on this issue, which have misled plenty of others. Likely due to these ads, even Kamala Harris came out in favor of PBM regulations on the campaign trail.

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[1] Url: https://www.dailykos.com/story/2024/12/24/2293605/-Trump-s-Big-Pharma-Blunder

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