Plus, the high-stakes budget fight coming this summer
Trump Teased an Executive Order on Drug Prices. What Could It Mean?
President Trump said Friday that he is preparing to issue an executive order to reduce prescription drug prices by requiring that the United States government does not pay more than the lowest price paid by another country.
“We’re going to be announcing something very shortly, a favored-nations clause,” Trump told reporters. “As you know for years and years, other nations paid less for drugs than we do, sometimes by 60, 70%. We’re going to be, and we’re working on it right now, we’re working on a favored-nations clause, where we pay whatever the lowest nation’s price is.”
What it means: Health care experts weren’t immediately clear on what Trump was referring to, but two people familiar with White House planning told The Wall Street Journal they thought the president was talking about a proposal issued by the White House last fall to tie certain Medicare Part B drug costs to an international price index.
Why it might not matter much: “The price index idea, which the pharmaceutical industry and many medical providers have vigorously opposed, is still under review from the Office of Management and Budget and may begin as a five-year pilot program next year,” The New York Times’s Margot Sanger-Katz explained. “But it would apply to only a small subset of the drug market, and would not affect the prices paid for more typical prescription drugs that are sold at retail pharmacies. An executive order on drug prices would most likely have no force of law on its own, but could direct the Department of Health and Human Services to pursue or expand this approach.”
Fact Check: Trump Incorrectly Claims Drug Prices Fell Last Year
Showing just how much health care costs are on his mind as the 2020 election heats up, President Trump incorrectly claimed in a tweet on Sunday that drug prices fell last year:
This Hill’s Zack Budryk notes that “a September analysis by the Associated Press found 96 price hikes for each price reduction in the first seven months of 2018, and drug manufacturers increased prices for 1,026 drugs by a median of 6 percent in January, according to STAT News.”
Trump has made similar claims before, including in a May address from the White House Rose Garden in which he said that “drug prices are coming down, first time in 51 years because of my administration.” At the time, fact-checkers from Kaiser Health News and PolitiFact rated that claim “mostly false.”
They wrote:
“There is data that could conceivably support the argument that the list prices for some prescription drugs dipped in 2018. But that data doesn’t include many high-priced specialty drugs that drive costs up or the fact that some individual drug prices have increased.
“Nationally, spending on drugs has continued to climb, even if that growth has slowed. There is also no evidence to support the argument that Trump himself is responsible for changes in drug pricing.”
The High-Stakes Budget Fight Coming This Summer
Lawmakers returning from their July 4th recess face a potentially messy fight over raising spending caps and the debt ceiling, even as battles over border and immigration policies continue — and an August recess looms just around the corner, limiting time for negotiations.
Politico’s Burgess Everett and Heather Caygle report:
“Congressional leaders and the Trump administration have so far tried in vain to reach a deal that would avoid stiff budget cuts, a government shutdown and debt default in September. And now ugly splits in both parties are threatening to complicate the talks.”
The Republican split: The White House has reportedly pushed for a one-year extension of current funding levels, but lawmakers — including Republicans — have rejected that idea since it would prevent them from shaping spending decisions for the coming year.
“While some members of the Administration have suggested a yearlong CR as a viable path forward, this must be avoided,” 15 GOP senators wrote in a letter to White House budget negotiators last week. “Simply put, our adversaries do not handcuff their militaries with funding gimmicks like continuing resolutions — nor should we.”
The Democratic split: “House Democrats have different views on raising the caps,” Roll Call’s Paul M. Krawzak writes, “with some liberals opposed to a defense increase and some moderates concerned about the overall increase in spending.” Intraparty tensions over the $4.6 billion emergency border funding package passed late last month could make it harder for House Speaker Nancy Pelosi to hold her caucus together. Progressives, angered by the outcome of their fight on the border funding, may seek to reassert themselves in the coming budget battles.
The deadline: Lawmakers will have to agree on a budget plan before the end of September to avoid a possible government shutdown or having automatic budget cuts take effect. Politico’s Everett and Caygle note that, as of today, there are no meetings scheduled for this month between the top congressional leaders and the Trump administration.
For lawmakers long used to governing by crisis and deadline dealmaking, it may still be too soon to re-engage. “I’ve been through this dance previously,” Rep. Mark Pocan (D-WI), co-chair of the Congressional Progressive Caucus, told Politico. “I don’t even think we’re at the point even yet [to reach a deal]. It’s not going to be a July conversation.”
But the deadline to lift or suspend the debt ceiling may come sooner. The Bipartisan Policy Center said Monday that there is a “significant risk” that the U.S. will breach the debt limit in September, revising its earlier projection of an October or November deadline, according to Bloomberg. (A key factor behind that date change: corporate tax revenues are down 9% this year.) And Treasury Secretary Steven Mnuchin reportedly has told congressional leaders that the debt ceiling may need to be raised by mid-September.
That September deadline could complicate efforts by Democrats to tie the debt ceiling to negotiations on a two-year spending caps deal. Either way, expect a September to remember.
The view from Wall Street: Analysts at Goldman Sachs remain sanguine about the risk of a fiscal crisis — though the outcome they anticipate might displease budget hawks. “None of the key fiscal deadlines have been addressed yet; nevertheless fiscal policy appears to pose less downside risk than seemed likely six months ago,” Goldman economists Alec Phillips and Blake Taylor wrote in a report to clients on Sunday. “Congressional Democrats and the White House appear to be close enough to an agreement on spending caps that the probability of substantial spending cuts looks low; we expect an agreement by October.”
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News
- Tensions Flare Over Pelosi’s Comments About Four House Democratic Women and Border Bill – Washington Post
- Congress Has Ambitious Agenda Tackling Health Care Costs – Associated Press
- Kamala Harris Proposes $100 Billion Plan for Black Homeownership – Politico
- Now Hiring for a Trump-Branded Fed: GOP Flip-Floppers on Rates – Politico
- Trump Jawbones Fed Yet Again, May Be Grooming Powell Successor – Bloomberg
- Honeybees Hit by Trump Budget Cuts – CNN
- Obamacare's Survival May Hinge on Some Technical Legal Questions – Bloomberg
- 5th Circuit Decision on ACA Could Create Political Havoc for GOP – Washington Post
- Texas Is Going to Court to End Obamacare. It Hasn't Produced a Plan to Replace It. – Texas Tribune
- Kamala Harris Says ‘Medicare for All’ Wouldn’t End Private Insurance. It Would – Bloomberg
- Biden Vows to Bring Back Obamacare’s Individual Mandate Penalty – CNBC
- With Rural Health Care Stretched Thin, More Patients Turn to Telehealth – NPR
- Study Finds Medicaid Work Rules Would Lead to Great Loss in Coverage – Daily Independent
- Doctors Slow to Adopt Tech Tools That Might Save Patients Money on Drugs – Kaiser Health News
- Fast-Track Drug Approval, Designed for Emergencies, Is Now Routine – Wall Street Journal (paywall)
- Blindsided by a ‘Devastating’ Veto, Alaska’s University System Pleads for a Lifeline – New York Times
- The Purell Presidency: Trump Aides Learn the President’s Real Red Line – Politico
Views and Analysis
- What the U.S. Can Learn from Germany on Drug Prices – Caitlin Owens, Axios
- Even Researchers Don’t Know Which Doctors Medicare Advantage Covers – Austin Frakt, New York Times
- Sound, Fury and Prescription Drugs – New York Times Editorial Board
- A New Approach on Housing Affordability – New York Times Editorial Board
- It’s Nancy Pelosi’s Parade – Maureen Dowd, New York Times
- Why Is Nancy Pelosi Doing This? – Paul Waldman, Washington Post
- There Should Be a Public Option for Everything – Ganesh Sitaraman and Anne L. Alstott, New York Times
- Democrats 'Shooting Holes in Their Own Boat' with Single-Payer Plan – Albert Hunt, The Hill
- Trump's Health Care Transparency Order a Positive Step Toward a True Patient-Controlled System – David Balat, The Hill
- Libra, the Federal Reserve and Debt – Judd Gregg, The Hill
- Helping the Homeless: Lessons from Welfare Reform – Peter Cove, The Hill
- Congress Is Threatening to Make the Next Financial Crisis Worse – Bloomberg Editorial Board