Trump’s Real Shot at Lowering Prescription Drug Prices

In his cover-story interview with TIME, President-Elect Donald Trump said he was going to work to do something about the affordability of prescription medicine.

“I’m going to bring down drug prices,” Trump told TIME. “I don’t like what’s happened with drug prices.”

Applying pressure on drug companies though the media won’t work. Which is why this challenge will be one of Trump’s biggest in 2017.

Chasing the rabbit of drug prices is a tradition in recent American politics. In 2003, President George W. Bush and a Republican-dominated Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act.

The plan was to offer senior citizens on Medicare a prescription drug benefit. The law also gave seniors discounts off the cost of most medicines through a Medicare-approved drug discount card, according to the White House website.

But the program was not free to taxpayers. Critics said it increased the national debt.

So what can Trump do? This isn’t a case of bringing or retaining 1,100 jobs at Carrier Corp. in Indiana. This is instead a tricky case mixing in the largest market demand in the world, research and development costs, senior needs, emerging needs, and much more.

Research and development is especially important. Many cutting-edge drugs are developed in the United States, where they are sold at market prices. Other nations may get these drugs and demand they be sold at lower prices. In effect, U.S. consumers subsidize cheaper drugs in other parts of the world.

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On the other hand, other nations have lower barriers to market entry for new drugs. America’s Food and Drug Administration make drug companies jump through all manner of hoops to win approval — hoops that take time in a bogged-down bureaucracy many experts say is outdated.

Then there are generic drugs. We all love the cheap costs of generic drugs, but would we like the drugs as much if we knew the conditions in which they were made? Dr. David Gortler, a professor of pharmacology at Georgetown University, recently asked that question in LifeZette. Gortler wants the nation of origin on the generic drugs’ labels.

But ultimately, it’s Trump’s instincts as a negotiator that will best serve him in the arena, says CNBC contributor Jake Novak.

“Will Trump get a commitment from the drug makers to cut prices on the biggest drugs by a certain percentage in return for killing off a set of costly regulations? He certainly could,” Novak opined on Wednesday. “Will he issue a special new tax deduction or credit for Big Pharma that offsets lower drug revenues? It’s possible. He likes to make deals and he has a Republican Congress likely to back him if he does.”

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Also helping Trump, Novak says, is that Trump is not beholden to special interests on the Right, or to liberal ideology on the Left. This alone could help him cut through the complicated clutter and get some deals made for America’s prescription drug consumers.

It’s a job tailor-made for a political disruptor like Trump.

Bringing down prescription drug prices will necessarily require a blend of restrictions on how insurance companies price drugs, which could be done during the coming Obamacare rewrite.

But to lower costs, Trump and Congress must also pass patent reform to limit generic producers from undercutting research companies. And they will need to aggressively reform the FDA to reduce costs and timetables for clinical trials and decisions.

Applying pressure merely though the media won’t work — which is why this challenge will be one of Trump’s biggest in 2017.