A much-anticipated February 20 meeting between President Donald Trump and representatives of the pharmaceutical industry ended without the companies getting a firm commitment from the new administration that it will scale back provisions of the 2022 Inflation Reduction Act (IRA) that force manufacturers to negotiate lower prices for certain widely used prescription drugs.
The president did not tell the CEOs what his administration plans to do about the IRA drug-pricing provisions, instead informing them their companies would be subjected to tariffs if they did not reshore their manufacturing plants to the United States, Bloomberg reported.
The president has vowed to eliminate the climate-related provisions of the IRA reported Bloomberg, however, he did not commit to addressing other industry concerns.
Possible Irrelevance
The fact that there was no major announcement after the meeting may suggest Trump thinks the price negotiations are a sham, says Jeff Stier, a senior fellow at the Center for Public Choice
“President Trump sees himself as a dealmaker,” said Stier. “Trump knows what negotiations all are about: the government sets the prices, and if the company does not agree, it faces confiscatory and likely unconstitutional fines and penalties.”
Patent Wildcard
Much of the controversy over drug pricing is rooted in the Biden White House’s administrative changes to the 1980 Patent and Trademark Amendments, also known as the Bayh-Dole Act. In December 2023, the Biden administration issued a final rule limiting patents, or “march-in rights,” to control prescription drug prices.
“The announcement advises federal agencies to control the relicensing of high-priced drugs when ‘reasonable terms,’ as defined by the administration, are not met,” reported Health Care News on January 18, 2024.
The Trump administration’s aggressive budget-cutting may flip the script on Biden’s plan to pull patents to limit drug prices, says Merrill Matthews, Ph. D., resident scholar with the Institute for Policy Innovation
“The Biden administration’s effort to reinterpret the Bayh-Dole law by allowing the government to essentially seize the patent of any federally funded drug if the feds didn’t like the price may become a nonissue,” said Matthews. “If Washington drastically cuts back federal funding for basic drug research, in the future there won’t be any federally funded patents to seize.”
Thorny Issue of Vaccines
In addition to wanting Trump to lift Biden’s de facto price controls on drugs, the matter of vaccines has been on the minds of big pharma executives.
Top Trump health officials such as HHS Secretary Robert F. Kennedy Jr. and Trump’s nominees to head the FDA, Marty Makary and Dave Walden at the CDC, have expressed varying degrees of vaccine skepticism, a subject that continues to roil public opinion in the aftermath of the nation’s experience with mRNA vaccines during the pandemic.
Pfizer CEO Albert Bourla spoke at a PhRMA Forum two days before the White House meeting.
“Do I think we can convince them to do something bold on vaccines with Kennedy in HHS? Probably not,” Science quoted Bourla as saying. “Do I think we can convince them to do something very bold for cancer or cardiovascular diseases with Kennedy in the HHS? Absolutely yes.”
Kennedy published a favorable March 2 op-ed for Fox News on vaccines. Responding to widespread reports of a measles outbreak in Texas, Kennedy, a prominent critic of the Mumps, Measles, and Rubella (MMR)vaccine, Kennedy wrote, “Vaccines not only protect individual children from measles, but also contribute to community immunity, protecting those who are unable to be vaccinated due to medical reasons.”
The Unvaxxed
Kennedy pointed out that 79 of the 146 cases at the time of writing were individuals who did not receive the MMR shot. ‘Parents play a pivotal role in safeguarding their children’s health,” wrote Kennedy. “All parents should consult with their healthcare providers to understand their options to get the MMR vaccine. The decision to vaccinate is a personal one.”
“The anti-vax Secretary Kennedy was likely pushed to say something positive about the measles vaccine – just as then-President George W. Bush pushed some of his free-market trade economists to support steel tariffs,” said Matthews. “But Kennedy has several behind-the-scenes ways of limiting or roadblocking vaccine development and promotion, like his decision to cancel two vaccine advisory committee meetings just as they are gearing up to consider the fall flu vaccine.”
Meanwhile, there are other issues stemming from the Biden era that the drug industry has criticized and that Trump could address. One is the so-called pill penalty, a provision of the IRA that sets a shorter time for chemically derived, small-molecule drugs to be protected from price negotiations than is the case for biologics, drugs that are developed from living organisms and more complex to produce. The industry wants the same treatment for both, Bloomberg reports.
A new administration can also give pharmaceutical companies a break from the strict antitrust policies of the previous administration, including improper patent listings in the FDA’s “Orange Book,” merger enforcement, and actions related to pharmacy benefit managers, according to a Rutgers Law School forthcoming paper.
Bonner Russell Cohen, Ph.D., ([email protected]) is a senior fellow at the National Center for Public Policy Research.
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
