Trump's budget proposes moderate pricing reforms, but executive action in Part B could follow: Bloomberg

Donald Trump
At his State of the Union speech, Trump called on lawmakers to get a drug pricing bill to his desk for a signature. (C-Span)

Drug pricing debate has dominated Washington for years, and now President Donald Trump’s latest budget shows how his administration plans to approach the issue in an election year. The budget proposes some moderate reforms, including some that pharma might even support, even as Democrats get aggressive with their rhetoric against the industry.

Meanwhile, Trump is also considering an executive action to force lower prices in Medicare Part B amid attacks on his healthcare record, Bloomberg reports. That'd be a much more drastic measure and one the industry would surely oppose. The change would affect medicines administered in doctors' offices such as big-sellers Opdivo from Bristol-Myers Squibb and Eylea from Regeneron.

In his 2021 budget, Trump calls for an out-of-pocket cap for patients in Medicare Part D, improving incentives to control pharmaceutical costs and measures to bolster generic and biosimilar competition. They’re all “bipartisan” measures that would “increase competition, reduce drug prices, and lower out-of-pocket costs for patients at the pharmacy counter,” the budget says. 

The document, which doesn't go into detail on the issue, is largely symbolic and Congress will develop its own spending priorities. Still, it does lay out the administration’s ambitions. Elsewhere, the budget calls for deep cuts to federal healthcare programs and a boost to defense spending.

It also represents a retreat from Trump's campaign promise to negotiate drug prices, the Washington Post points out. Now, Democrats have made that proposal part of their aggressive bill from the House of Representatives.

Passed last year, Speaker Nancy Pelosi's legislation calls for government price negotiations on pharmaceuticals, an international pricing index, fines for drugmakers who refuse to negotiate and more. Senate Majority Leader Mitch McConnell has rejected the proposals as “socialist price controls” and said he won’t call the bill for a vote. 

RELATED: Who's toughest on drug prices? Watch Trump and his 2020 challengers wrestle for the title 

Meanwhile, a bill from the Senate Finance Committee is more popular with the drug industry and Republicans, but it hasn’t yet been scheduled for a full vote in the Senate. That bill calls for an out-of-pocket cap for patients and new rebates forced upon drugmakers that raise prices above certain levels. 

At his State of the Union Speech last week, Trump told lawmakers to "get a bill to my desk" for a signature, USA Today reports. In response, Democrats chanted “HR 3,” the name for their aggressive legislation. 

If Congress doesn't reach a consensus on pricing, Trump could choose to take the executive order route, Bloomberg reports.

Of course, all of the developments come amid the Democratic presidential primary season, and Bernstein analyst Ronny Gal said the industry should be on guard after the results in Iowa.  

The two candidates who came out on top—Pete Buttigieg and Bernie Sanders—each spent more time attacking the industry than others, the analyst wrote, noting that the results could prompt other candidates to get more aggressive with their drug pricing tone.

RELATED: Amid a political firestorm over pharma's pricing, net prices actually fell last quarter: report

Up next, Gal will be watching Trump’s positioning. With the eventual Democratic candidate expected to be aggressive on pharma, that’ll force Trump to either “go further or redefine the field,” Gal wrote. In the first strategy, the president would push for “quick implementation of populist measures,” such as importation or the international price index. Alternatively, he could “walk away” from the issue and play down drug price controls as socialist, according to the analyst.  

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