During candidate Trump’s run for the presidency, particularly during the Republican primary, he made a point of denigrating one of the sacred cows held most dear by so many donor-class Republicans.
No, I don’t mean the free market. I mean big business. And unlike so many other Republicans, Trump, who relentlessly reminded his audience that he was a businessman himself, knew the difference. Bemoaning everyone from lenders (“total killers”) to pharmaceutical companies (“getting away with murder”), Trump repeatedly fused populism with steely eyed realism in suggesting not so much that there was a problem with market forces (as left-wing populists are fond of suggesting), but that instead such companies were abusing their power by virtue of their ability to buy off the political process. Trump knew this, of course, because (as he also reminded us) he himself had done it.
Yet observing some of the Trump administration’s most recent moves, particularly with the titanic failure of “skinny repeal” in the rearview mirror, one can’t help but wonder whether the president-to-be was able to fully grasp what the pressures might be on him as an elected politician to play the same game. Or at least, what the pressures might be on the members of Conservatism, Inc., to whom he increasingly (and unfortunately) delegates the crafting of his policy agenda. Unfortunately, this has been especially true with Pharma.
Granted, the president has taken admirably aggressive moves toward this group regarding things like manufacturing their packaging in the United States. Granted also that some of his administration’s more pro-pharma moves, like the loosening of overly restrictive FDA regulations, are good policy no matter how you slice it. But when it comes to tackling pricing, the area where Trump fingered the industry as “getting away with murder,” it seems like some members of the Trump administration are eager to drive the proverbial getaway car. This impulse is most notable in the administration’s perplexing willingness to sacrifice programs that help the very people who elected him in order to win plaudits from the industry and their more donorist allies in the GOP.
Start with the healthcare debate of the past three weeks, which necessarily has to form Exhibit A. While the administration is to be commended for its continued persistence in trying to fulfill the Republican party’s unanimous promises to repeal Obamacare—and the betrayal of Senator John McCain (R-AZ) is impossible to overstate with regard to those promises—the bills drafted to achieve that goal were revealing in often unflattering ways regarding Republicans’ care for their own voters. This was particularly true of the Senate’s initial effort, the Better Care Restoration Act (BCRA). Specifically, while some of the liberal alarmism over BCRA’s friendliness to Big Pharma worked out to tax-happy tantrums, there was one element that stuck out like a sore thumb: the bill’s approach to the opioid crisis, which is itself a pharma creation, and one that is often fingered as plaguing Trump country. Yet despite this, the bill came off as ambivalent to indifferent regarding this plight. For instance, there was no attempt to introduce measures that would prevent the kind of abusive business practices that led to the opioid crisis (and which could have won bipartisan support, despite likely needing 60 votes). Further, the bill offered a rather small sum in funding for addiction help, period. Say what you like about not spending public money on private causes, and I’m probably sympathetic, but given how many kickbacks made it into BCRA, it seems that the opioid issue should’ve been worth a little extra, too. And, of course, once “skinny repeal” became the cause du jour, all concern for this issue vanished entirely. Hopefully, now that the administration is casting a wider net for ideas to achieve the same goal, the next attempt will be more conscious of this blight on their own supporters.
But perhaps one shouldn’t count on it, because unfortunately, this isn’t the only place where the Trump administration and its allies in Congress have unaccountably shied away from holding pharma’s feet to the fire. Exhibit B is a less-acknowledged, but no less-alarming development. It can be found in the Trump administration’s Centers for Medicare and Medicaid Services’ (CMS) recent proposal to slash reimbursement to providers in the 340B drug pricing program. 340B is a law, enacted by President George H.W. Bush, that requires pharmaceutical companies to provide discounts to providers that serve our most poor and vulnerable patients if they want to get reimbursement from the Medicaid and Medicare programs.
Both from a policy and a politics standpoint, CMS’s directive makes little sense. Firstly, at the policy level, 340B is a win-win for those opposed to welfare programs, corporate or otherwise. Access to Medicare Part B’s massive glut of taxpayer dollars is obviously a great business boost for a pharmaceutical company, especially given that the government doesn’t negotiate over prices. This means that in many cases, pharmaceutical companies are not so much Randian heroes winning the day through crusading innovation, but rather Randian villains who rely on a giant corporate welfare slush fund to pad their bottom lines. Imposing costs on the acceptance of corporate welfare is good policy, particularly given that no one is forcing pharmaceutical companies to do business with Medicare. 340B is completely voluntary.
And speaking of not forcing companies to do business with Medicare, let’s not forget that given Medicare’s rapidly approaching insolvency, the imposition of measures that make it less attractive for every pharma company to be able to price gouge Medicare’s funds for their products just makes sense. And that’s before you even get into the fact that the attacks on the program by pharma for allegedly padding hospitals’ bottom lines are actually simply attacks on the program working as intended—just ask one of its long time conservative champions!
Furthermore, like BCRA’s indifference to the opioid crisis, this move is politically bewildering. Contrary to what some skeptical conservatives might assume, 340B is not a program that solely acts to benefit the Obamaphone-wielding entitlement machines that make up the Democratic base. Rather, it benefits areas like Zanesville, Ohio, right in the heart of coal country, not to mention President Trump’s hometown of Queens, NY. This is policy for the white working class, i.e. the Trumpian hardcore, even if it might also incidentally benefit the occasional Pajama Boy. Lessening its power is the kind of thing you’d expect from a donors-uber-alles pseudo-patrician like Mitt Romney, not a billionaire working class hero like President Trump.
Don’t get me wrong. There is nothing wrong in trying to co-opt a large industry like pharma into the cause of “America First.” But giving away the farm is a long way from the “Art of the Deal.” Send a memo to President Trump and the party he leads—rather than letting pharma get away with murder, perhaps they should get back to being total killers.
Mytheos Holt is the Senior Fellow in Freedom to Innovate at the Institute for Liberty, and a former speechwriter for US Senator John Barrasso (R-WY).