The Emerging Outline of Trump’s Deal with Pharma

Guest post Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez

During the 2016 presidential campaign, Democratic candidate Hillary Clinton reiterated the longstanding Democratic pledge to allow Medicare to negotiate drug prices and demand higher rebates for prescription drugs. In response, and aware of the general public’s mounting concern about rising prescription drug prices, Donald Trump shifted to the left and repeatedly called for Medicare to directly negotiate drug prices. For example, at an MSNBC town hall on Feb. 17, 2016, Trump said, “If we negotiated the price of drugs, Joe, we’d save $300 billion a year.”

However, none of Trump’s three most substantive policy statements issued in the fall of 2016—including the healthcare section of the Trump-Pence Campaign website, his “Contract with the American Voter,” and his healthcare plan issued two days after the election—mentioned the challenge of rising drug prices or the idea of Medicare negotiating drug prices with pharmaceutical companies.

On Jan. 31, 2017, President Trump met with a group of pharmaceutical industry executives, including the CEOs of Amgen, Celgene, Eli Lilly, Johnson & Johnson, Merck, and Novartis, as well as Stephen Ubl, head of the Pharmaceutical Research and Manufacturers of America (PhRMA).

While during the meeting Trump called drug prices “astronomical” and said, “We have to get prices down for a lot of reasons … for Medicare and Medicaid,” he stopped short of the aforementioned negotiation of drug prices by the federal government. Trump pressed the pharmaceutical companies to bring drug manufacturing and production back to the United States. In return, Trump pledged to work to reduce corporate taxes, support deregulation, and streamline the FDA to expedite drug approvals. One can interpret those broad statements as a draft outline of the deal with pharma that will be struck by the Trump administration.

Where would such a deal leave the drug pricing issue? While Trump clearly expressed concern about high drug prices, the drug makers can offer him something else that he may want even more: jobs for U.S. workers that come from boosting production at existing plants and opening new plants on U.S. soil. Imagine the photo ops!

Continue Reading

The Rise of Trump Care: 7 Ways Trump Could Impact Healthcare Reform

Guest post by Abhinav Shashank, CEO & co-founder, Innovaccer.

Abhinav Shashank
Abhinav Shashank

On Nov. 9, 2016 the United States of America witnessed a major turnaround in the administration. Republican candidate Donald Trump is the 45th president-elect of the United States. Donald Trump plans to bring about numerous changes to “Make America Great Again,” and true to his Republican roots, Trump’s plans for the healthcare focus on some key facets which have always been a concern for the GOP.

Trump has outlined his healthcare plan for America that is centered around mainly the following key facets. A study conducted by the Commonwealth Fund with RAND Corporation using simulation analyzed his plans and came up with probable impacts.

1.) Repeal Affordable Care Act

Donald Trump and the GOP want to fully repeal the ACA and replace it with something new, dubbed “Healthcare Reform to Make America Great Again.” However, the intention is to achieve a better law with some parts of ACA.

Planned changes: Pre-existing condition clause will remain. As the Republican plan “the better way” dated June 22, 2016, Trump plans to continue with it as no American should be denied on the basis of pre-existing medical conditions or demographics. Remove the individual and employer mandate, as no one should be forced to buy health insurance. Reduce the growth rate of Medicare spending and implementation of new taxes and fees.

2.) Use of Health Savings Accounts (HSA)

A Health savings account is a tax-advantaged medical saving account available to the people of US, which allows people to contribute or draw money from for paying off medical expenses, tax-free.

Planned changes: Under Obamacare, HSAs were available to only individuals who were enrolled in “High Deductible Health Plans.” Keeping the basics same, Trump proposes to expand HSAs, allowing all individuals to use HSAs where the contributions would not only be tax-free but will also accumulate over time. Moreover, he would allow HSAs to become a part of a person’s estate and would be passed on to heirs without any penalty.

3.) Making premiums tax deductible

Before ACA came along, there were substantial tax advantages available to people who had their employer cover for them, but that privilege did not extend to people who took up private, individual-market policies not provided by the employer. To solve this disparity, ACA had the provision of means-tested advance premium tax credits, known as APTCs – where the government reduces the cost of insurance by providing APTCs to bridge the gap between the cost of premium and payment limit.

Planned changes: Trump’s plan will allow individuals to fully deduct their premiums from their tax returns under the current tax system, facilitating a free market to provide insurance coverage to companies and individuals. The scheme Trump has will abolish APTCs and let individuals use pre-tax money to purchase individual market insurance.

The aim is to provide people with an incentive to pay for coverage when they are healthy, and not make it mandatory.

4.) Funding Medicaid through block-grants

Under the current law, Medicaid gets join funds by the federal and state government and the federal government contributes 50 percent to 75 percent of the total costs and the rest is borne by the states.

Planned changes: Trump proposes to fund Medicaid all over the country through block grants. Under this, the federal government would give a fixed amount of money to states and let them fund their programs.
The rationale behind this is that state governments know best about their population and should have the sole authority on how the money should be spent and will fare better without federal administration overhead.

Continue Reading