The Biden administration presented a plan on Wednesday to let the government negotiate drug prices.
The timeline would give Democrats a win to run on in 2024 and put Republicans in a tough spot.
But prices won't get cut until 2026. By then, a new president could be in office.
He wouldn't even need the support of a Republican majority in Congress to do it.
Under the Inflation Reduction Act President Joe Biden signed into law last year, Medicare will for the first time be able negotiate prices for a small number of expensive prescription drugs available to people on Medicare.
Lowering drug prices is a policy win that's popular with the public, Kaiser Family Foundation polling shows, and one Democrats have been aching to deliver. But the one potential political problem for Biden is that under the way the law is written, drug prices won't go down until January 1, 2026, meaning patients aren't going to see savings to their wallets at the pharmacy counter anytime soon.
If Biden doesn't win reelection in 2024, then a future president could take credit for the plan's rollout. Trump, who once accused Big Pharma of "getting away with murder," could be president when drug prices fall.
"There is something deeply ironic about Donald Trump potentially returning to power and implementing the price reductions on something where he went out on a limb for Republicans," Spencer Perlman, director of healthcare research at Veda Partners, an investment advisor and consultancy firm, told Insider.
Trump, 76, is the only 2024 candidate who has formally announced he's running for president, though more than a dozen other Republicans are eyeing the contest for the GOP nomination. Biden, 80, has said he intends to run for reelection and CNN reported he may announce as early as February.
The outcome is still far away. Trump has lost to Biden before, but voters have raised concerns about Biden's age and polling shows they would prefer neither man run.
Regardless, on the topic of drug prices, the two men are aligned.
The forthcoming policy isn't starting until four years from now so that federal healthcare agencies have time to get feedback from outside groups like pharmaceutical companies and pharmacies.
The four-year timeline, however, also opens up the possibility that a Congress or another president hostile to the Inflation Reduction Act could gut the law or delay the drug pricing plan. But Perlman predicted that was unlikely because Democrats devised a "trap" with the timeline they've set, one the Biden administration made more clear on Wednesday.
The key dates the administration rolled out show that by September 1, 2023, federal health agencies will publish a list of 10 drugs it plans to negotiate. The following year, also by September, agencies will list the new prices for these drugs.
That date is no accident, Perlman said, because it happens to be just two months before the 2024 election and after the conventions. Democrats can run on the plan but also put Republicans in a tough spot, he said, making it "very difficult for anybody to reverse those prices." He predicted the law would be implemented regardless of who won the presidency.
"Republicans basically have a choice at this point: They either can take a political position that I would argue is political poison," he said, "or they have to go along with actually implementing something they think is bad policy."
Republicans aren't likely to go after the healthcare law
House Speaker Kevin McCarthy and Senate Minority Leader Mitch McConnell haven't said whether they would try to overturn the Inflation Reduction Act under a GOP president. McCathy's office didn't reply to an inquiry from Insider, and McConnell's office pointed to his previous comments on the bill.
Congressional Democrats sent the bill to Biden without a single Republican vote, and both leaders railed against the legislation at the time with McConnell calling the drug pricing policy "prescription drug socialism" and claiming it would stymie medical innovation. Critics of price setting argue that drugs can take a decade to be developed and approved by federal regulators, and most that are being tested never reach the public, failing safety and efficacy tests along the way.
Despite the outcry, only a handful of Republicans have explicitly called for repeal. And their wounds from going after a popular healthcare law are still fresh. In 2018, Democrats successfully attacked Republicans for trying to repeal the Affordable Care Act, often called "Obamacare."
In the past, Republican ideas to solve the drug pricing problem focused on removing bureaucratic obstacles that slow the development of new drugs. But today, members have become more populist and the MAGA wing of the party is less wedded to industry, and is distrustful of corporate America, Perlman said.
"I'm not sure that you have this unified Republican front that could protect pharma even if they wanted to," Perlman said.
On top of that, he added, congressional Republicans have run on promises to reduce the deficit, balance the budget, and pay off the debt. Gutting the prescription drug provision would come at a cost to the federal government. The plan is poised to save the federal government nearly $100 billion, according to a report by the nonpartisan Congressional Budget Office.
"If they were to reverse this, it would fly right in the face of that," Perlman said. "And you're basically telling seniors: 'We are going to force you to pay more for drugs because we feel that it is not appropriate to negotiate the prices."
Trump wanted to lower drug prices
In a phone call with reporters Wednesday, health officials didn't directly address a question from Insider over whether they were concerned about the new drug pricing program going live under a different president and Congress.
"The way that we are approaching implementation of this law is to do so in a thoughtful manner, engaging the various stakeholders, interested parties who have expertise and experience to bear on drugs, drug prices, so we can achieve the balance of affordability, innovation, and access to these therapies," Dr. Meena Seshamani, director of the Center for Medicare, said.
But there are some signs Trump could seize on the program. His departure from Big Pharma started during his 2016 campaign for president when he backed the progressive position that Medicare should be allowed to set drug prices.
When Trump became president he signed an executive order to allow states to import cheaper prescription drugs from Canada and to give healthcare plans the option to cap the price of insulin, among other measures. He wanted Medicare to set prices in a way that was more in line with what other countries pay.
He also proposed giving Medicare beneficiaries $200 pharmacy gift cards, but the plan never got implemented due to the short timeline and potential legal challenges, Insider first reported.
"There has been no bigger champion of lowering prescription costs and putting Americans first than President Trump," Steven Cheung, Trump's 2024 campaign spokesman, told Insider. "When Democrats in Congress dragged its feet on lowering costs, President Trump signed historic executive orders that led to massive prescription discounts for low-income patients, provided access to lower priced prescriptions for all Americans, and prohibited secret deals with drug manufacturers that put patients last."
But Trump also had trouble winning the support of congressional Republicans, and Biden's forthcoming policy goes much further than his predecessor's.
Under the new law, Medicare will negotiate the price of 10 drugs starting in 2026 and then the following year it will add 15 more drugs to that list. By 2028, it will add another 15 drugs, though some of them will be drugs administered in hospitals rather than those people pick up from the pharmacy.
Every year after that, 20 more drugs will be added to the negotiation list. Aside from negotiation, the Inflation Reduction Act caps the cost of insulin for Medicare patients at $35 a month and fines drug companies that raise the price of drugs faster than inflation.
The plan begins to put the US in line with other countries that have similar economies.
But it still falls short of other nations because the drugs are only for people covered by Medicare, the health insurance program for people age 65 and older, and certain other people who qualify because of a disability. Roughly 64 million people are enrolled in the program but not all of them take the most expensive medicines.
The Inflation Reduction Act also is likely to see several changes or amendments, too, just like many laws do. Democrats, for instance, delayed several parts of the Affordable Care Act — either on their own or with help from Republicans — stripping it of numerous taxes, and pouring billions of federal dollars into the private marketplace.
The Pharmaceutical Research and Manufacturers of America, which opposes drug price negotiation, told Insider it was was "profoundly concerned" about the new law but added that the latest announcement was a "useful step" so they and others could weigh in on the policy.
"We are committed to working with the administration and policymakers throughout the implementation process to help mitigate the harm this law will impose on patients and future innovation," Nicole Longo, a spokesperson for PhRMA, said.
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