Did the Trump Administration Just Give Big Pharma a Big Boost?

In a move barely noticed outside health care policy circles, last week the Trump administration made a policy change that may significantly boost Big Pharma and indirectly harm Trump voters in poorer, rural areas.


The Centers for Medicare and Medicaid Services (CMS) finalized a rule that cuts Medicare Part B drug reimbursement to some hospitals serving poorer patients by about 30 percent.

On face value, the cut represents a big savings for taxpayers, since it’s less money being distributed via entitlements to health care providers.

But advocates for hospitals serving a disproportionately large number of poorer patients, including in rural parts of red states, say the cut could significantly harm the financial help of those providers, jeopardizing care for legions of voters who supported Trump in 2016.

The rule change has been a big lobbying priority for Big Pharma, which wants to stick it to these hospitals because they benefit from a law allowing them to sell some drugs at a discount in exchange for Big Pharma companies getting access to entitlement monies.

Big Pharma believes that program, whose existence and previous expansion is written into law, is reducing its profit margins.

Critics of Big Pharma’s position regarding the drug discount program, known as 340B, and the CMS rule change charge that Big Pharma is already making massive profits that are barely dented by drug discounts.

However, if the CMS rule change forces the shuttering of hospitals that sell the drugs at a discount, it will eliminate the entities making the discounts available. Defenders of the program say that will mean higher profits for Big Pharma, and higher prices and less access to care for many poorer patients.


Affected hospitals say they plan to sue over the rule change.

The Trump administration has recently sustained a barrage of criticism over its hiring of former lobbyists and lawyers for pharmaceutical companies, who critics charge may have made the administration more receptive to Big Pharma appeals than President Trump himself, a longtime critic of high drug prices and Big Pharma’s alleged role in stoking them.

In addition, left-leaning non-profit watchdog Democracy Forward is reportedly suing the administration for information regarding the role of former recipients of pharmaceutical money in stalling a rule setting ceiling prices for drugs sold as part of the 340B discount program.

During the 2016 presidential campaign, Trump was known to routinely blast Big Pharma, threatening to have Medicare negotiate drug prices with pharmaceutical companies directly, and allow prescription drug re-importation from other countries, where drugs are sold more cheaply. However, in office, he has not pursued these policies.

Most of the Trump administration’s efforts to bring down prescription drug prices have centered on FDA reforms designed to bring drugs to market more swiftly and more cheaply.


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