Drug price escalation has become so unpopular it has resulted in both Republican President Donald Trump and Governor Andrew Cuomo both proposing to take concrete action to limit prices, a populist position that has long been championed by Vermont Senator Bernie Sanders. Trump said over the weekend that he will not be cutting Medicare and that he will be seeking to force drug companies to negotiate prices for drug purchases for Medicare and Medicaid. Meanwhile, Governor Cuomo unveiled plans last week to establish a state review board to put caps on drug prices in Medicaid and then establish a surcharge if they exceed the Medicaid prices in private insurance. The surcharges would be used to lower insurance premiums.
I have been saying for a long time that the drug companies are their own worst enemies, raising their prices beyond any relation to research and development costs and instead charging whatever they could get away with. So, now they are in the crosshairs of two powerful politicians.
No one should underestimate the power of the pharmaceutical lobby which is legendary in Albany and Washington for thwarting almost every piece of legislation that would limit its freedom to set its prices. The drug companies are one of the biggest political donors of all and, in addition they make contributions to patient groups and other community organizations to enlist their support to take the lead in fighting the regulation of prices and access to medicines. The pharmaceutical lobby just successfully defeated a price control ballot proposition in California, saying it would lead to increases in drug prices for those not in public programs effected by the ballot proposal.
Once more specific details of the President’s proposal and the Governor’s plan are out, they will face major opposition in a changed political landscape. While Trump is clearly siding with corporate interests on most economic and environmental issues, he seems to have an ax to grind with the drug companies not just regarding prices. His disapproval, seems to be related to how they have moved manufacturing out of the country. Pfizer which was based in Brooklyn now has a large plant in Ireland, for example.
Cuomo seems to be responding to concerns from the insurance industry which has been crusading against the high drug prices which are forcing them to raise rates. Also, though Cuomo seems to have decided on being a Democratic populist. He is increasingly signing on to the political platform of Senator Bernie Sanders in a number of areas as he prepares to run for re-election in 2018. Last week, Cuomo announced plans for a college tuition subsidy program with Sanders at his side. And, Sanders has been one of the loudest voices to attack drug prices and call for Congress to allow Medicare to negotiate drug prices and approve importation of medicine from Canada and other countries which meet safety standards.