Trump breaks key campaign promise on Medicare

"If we have to bid out pharmaceuticals, we're bidding them out. We're going to save billions and billions and billions of dollars."

U.S. President Donald Trump meets with representatives from PhRMA, the Pharmaceutical Research and Manufacturers of America, in the Roosevelt Room of the White House on January 31, 2017 in Washington, DC.  (CREDIT: Ron Sachs - Pool/Getty Images)
U.S. President Donald Trump meets with representatives from PhRMA, the Pharmaceutical Research and Manufacturers of America, in the Roosevelt Room of the White House on January 31, 2017 in Washington, DC. (CREDIT: Ron Sachs - Pool/Getty Images)

On the campaign trail, candidate Trump promised to save hundreds of billions of dollars standing up to the pharmaceutical industry, and said he’d “negotiate like crazy” to bring down Medicare prescription drug prices.

Allowing Medicare to negotiate directly with drug companies for better prices has long been a goal for progressives, and when voters heard Trump stray from the Republican party orthodoxy, railing against Big Pharma as he asked for their support, many likely thought his promises would mean something different in Washington, D.C. if he were elected president.

Sadly, they were wrong.

Ahead of the Friday speech announcing the plan, senior administration officials told reporters that “we are not calling for Medicare negotiation in the way that Democrats have called for,” instead characterizing Trump’s plan as outlining “important changes that will dramatically improve the way negotiation takes place inside the Medicare program.”


The United States spends over $300 billion on prescription drugs per year, and Medicare’s share of that total hit $110 billion in 2015. During the campaign, Trump promised to save a large percentage of that.

“If we have to bid out pharmaceuticals, we’re bidding them out. We’re going to save billions and billions and billions of dollars,” then-candidate Trump told Fox News’ Sean Hannity in February 2016. The same month, he told MSNBC’s Joe Scarborough that, “If we negotiated the price of drugs, Joe, we’d save $300 billion a year.” At a March 2016 debate in Michigan, Trump said “I’m not only talking about drugs, I’m talking about other things. We’ll save more than $300 billion a year if we properly negotiate. We don’t do that, we don’t negotiate. We don’t negotiate anything.”

And at a campaign rally in Farmington, NH in January 2016, Trump incredulously asked why Medicare didn’t negotiate prescription drug prices and said politicians, unlike Trump himself, did not know how to make bids:

Well I can tell you one thing. We’re gonna be out there and some of it, like for instance drugs with Medicare. They don’t bid em out. They don’t bid em. They pay like this wholesale incredible number. Hundreds of — they say like 300 billion could be saved if we bid em out. We don’t do it. Why? Because of the drug companies folks. You take a look at the drug companies. Take a look at Johnson & Johnson, take a look at Pfizer, they’re leaving us and we’re still not doing anything. ‘Hey we’re leaving, by the way, don’t dare negotiate drugs.’ Excuse me? Excuse me? But we have so many instances like that. That’s one instance. Hundreds of billions of dollars. We don’t bid it out. We bid it out in Trump but we don’t bid it out with politicians because we don’t even know what it means to bid out.

It’s not clear whether Trump was arguing that his negotiating prowess would wipe out the entire $300 billion total spent on prescription drugs, or merely adding the savings a Trump administration would yield from negotiating drug prices to savings from other negotiations. Whatever the campaign math, the actual policy outcome that affects Medicare recipients struggling with paying their medical bills will essentially be the same as it was before.


The question of how to negotiate for the best prescription drug prices possible for older Americans is thorny and complex, with no real easy answers. The law that established Medicare Part D, which provides prescription drug plans, prevents the government from intervening as smaller health care providers attempt to negotiate with specific companies. This is the rule that Trump referred to on the campaign trail. But Medicare is required to cover most drug treatments, and therefore has less leverage in negotiations because it cannot really say “no” as health care systems in other countries (such as the U.K.) can.

HHS Secretary Alex Azar described the proposals in big terms Friday morning on Fox News: “the single most comprehensive approach to making prescription drugs affordable of any president in the history of the United States.” Azar, whose previous job was as an executive at drugmaker Eli Lilly, said the proposals would push generics on the market faster, free up Medicare Part D plans to negotiate discounts like the private sector, reverse financial incentives to not lower list prices, and give consumers options to drop out-of-pocket costs.

However, the administration has made clear the specific promise to have Medicare negotiate for lower prices will be abandoned. And other exhortations from candidate Trump have been equally insubstantial and incorrect, like so many other campaign chestnuts.

“I’m going to bring down drug prices,” Trump told Time magazine in December 2016. “I don’t like what has happened with drug prices.”

According to projections from the Peterson-Kaiser Health System Tracker, it would be a mistake to expect spending on drug prices to drop under the Trump administration.

“When it comes time to negotiate the cost of drugs, we are going to negotiate like crazy,” Trump told a crowd in Exeter, New Hampshire in February 2016. “The drug companies probably have the second or third most powerful lobby in this country. They get the politicians, and every single one of them is getting money from them.”


One of the largest donors to Trump’s re-election campaign is CVS Health Corp, which has a financial interest in keeping the government away from drug price negotiations. Health companies spent millions to contribute to Trump’s inauguration committee.

“You go see this, lobbyists, almost guarantee they produce, with me, won’t happen folks,” Trump told voters in Lacrosse, Wisconsin in April 2016. “With me, pharmaceuticals, you know there’s a bad bidding process on pharmaceuticals. There’s a bad bidding process for everything.”

The Trump administration’s proposals have mirrored those of the pharma lobby.

In the end, it’s all about the bottom line. Trump’s tough campaign talk affected the profits of pharmaceutical companies less than his actions did. In Trump’s first year as president, biotech stocks rose about 41 percent — well above the 23 percent rise in the S&P index.