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Democrats found a way to speak Trump's language in pharma debate

Ethan Wolff-Mann
Senior Writer
Reps. Elijah Cummings (D-MD) and Peter Welch (D-V) after meeting with President Trump on March 8th about rising drug costs. The members of congress introduced a bill related to the talk last week. Source: Reuters

A quartet of Democratic members of Congress introduced a bill last week in harmony with President Donald Trump’s campaign promises of lowering prescription drug costs. Entitled the Improving Access to Affordable Prescription Drugs Act, the 128-page bill aims to overhaul what many view as a broken system that has seen bipartisan outrage over skyrocketing prices. A companion bill was also introduced in the Senate.

Ordinarily, these might seem like the kind of pie-in-the-sky bills that representatives regularly introduce on a regular basis. For example, earlier this year, Rep. Rob Woodall (R-GA) introduced a bill to replace all income taxes with a 23% sales tax. (Woodall’s colleague Bob Goodlatte (R-VA) one-upped him by introducing a bill that would have killed the income tax and simply required an alternative to be thought up by 2021.)

But before the bill had been introduced, two of the bill’s co-sponsors, Rep. Elijah Cummings (D-MD) and Rep. Peter Welch (D-VT) went to the White House to discuss the art of negotiating prescription drug deals for Medicare. Since then, Cummings has had two more conversations about the issue with the Trump. The president is on board, with the idea at least.

An issue Trump really understands: buying wholesale but paying retail

In an interview with Yahoo Finance, Welch said Trump was not specifically committed to this bill, but in their 50-minute meeting Trump seemed very enthusiastic about the ideas to combat what they all view as extreme drug prices.

“Listening to him talk about the ripoffs and drug prices made me convinced he takes it seriously,” said Welch. “He was knowledgeable how we pay the highest prices and he made a link between pharma getting what it wants and campaign contributions.”

As a man who made a career of making and discussing “deals,” Welch said Trump disapproved that Medicare, a large buyer of drugs, is prohibited from negotiating with a seller, a common occurrence for a sale. “It’s only with the Medicare program that by law a buyer is prohibited from negotiating discounts,” said Welch. “We have a unique situation where government buys wholesale but pays retail prices.” Because of this, the public ends up paying far more to insure Medicare patients.

To energize Trump further, Welch said he and Cummings framed the ability for Medicare to negotiate prescription drug prices in hotel terms. “It would be like him needing a thousand mirrors and paying the same per unit cost. He was animated about it.”

Negotiating the right to negotiate is the beginning

The ability for Medicare Part D to negotiate as a buyer of prescription drugs is just one part of the overhaul that Cummings, Welch, Rosa DeLauro (D-IL), and Janice Schakowsky (D-CT) are proposing—along with Al Franken (D-MN) leading the charge in the senate.

One thing on the Democratic wishlist is letting people buy safe, established drugs from Canada where they are much cheaper. “He specifically brought up drug re-importation, something he supports,” noted Welch. Though this has traditionally been a Democrat-supported issue, Republicans like Sen. John McCain (AZ) and Trump have supported these measures.

The bill Schakowsky, DeLauro, Welch, and Cummings put forward also advocate for more transparency as a measure to fix aspects of price gouging in the prescription drug market—an issue brought to national attention by Martin Shkreli, who bought an older $13.50/pill drug and hiked the price up to $750 despite. To the bill’s backers, transparency would differentiate drugs that take years of expensive research and development to price gouging.

“We’re all for innovation, and drug companies spend an awful lot of money developing a drug,” said Welch. “Oftentimes they’re spending lots more on ads than research. There are a variety of situations that are immediately addressed. And they range from outright price gouging in the case of Shkreli to a much more thorny question of what is a fair price for a breakthrough drug.”

A bipartisan opportunity

Linking up with Trump, one of whose campaign issues was making drugs more affordable through negotiation, is the key to the Democrats’ strategy. “He understands the people that voted for him see this as a big, big problem,” said Welch. “I think it would be good for him and Congress to have significant bipartisan achievement.”

A Democratic bill’s chances of success in a Republican-controlled government aren’t very good, but with Trump’s support, the Democrats are optimistic. “We need the president’s support to do significant reduction in pharma pricing. The Republicans are in the majority so we need the president,” said Welch. “There will have to be a discussion and negotiation. I think there’s a lot of Republicans—including some possibly in the Freedom Caucus—who would support [these measures].”

It won’t take that many Republicans, Welch said, but the president whipping just some of them could be enough. “The argument is compelling and if you have the president getting energetic about this there’s a lot of Republican colleagues that would see the merit of that argument. I even brought up the wall of opposition [from the GOP]. And Secretary [of Health and Human Services Tom] Price was next to me. He said they’ll deal with that—a lot of that is campaign contributions.”

Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, tech, and personal finance. Follow him on Twitter @ewolffmann. Got a tip? Send it to tips@yahoo-inc.com.

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