Trump Pulls Classic “Donnie Bait-and-Switch” on Drug Prices

Summary

Bulwark Takes: Trump Pulls Classic “Donnie Bait-and-Switch” on Drug Prices
Release Date: May 12, 2025

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Introduction

In this episode of Bulwark Takes, Sam Stein, the managing editor at The Bulwark, engages in a comprehensive discussion with Jonathan Cohn, author of the Breakdown newsletter, about President Donald Trump's recent executive order aimed at addressing prescription drug prices. Titled "Trump Pulls Classic 'Donnie Bait-and-Switch’ on Drug Prices," the episode delves into the specifics of the order, its potential impact, and the broader political implications surrounding it.

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Overview of Trump's Executive Order

Sam Stein opens the conversation by referencing Trump's teaser about his new policy on prescription drugs. Jonathan Cohn provides an in-depth explanation:

[00:28] Jonathan Cohn: "The basic concept here is that we pay much more for our name brand prescription drugs than every other economically developed country. Trump's answer is to negotiate with drug companies to match the prices set by other countries, asserting that the U.S. is being 'ripped off.' He refers to this approach as 'Most Favored Nation Status.'"

Cohn emphasizes that the executive order does not immediately implement drastic price reductions but outlines a framework for negotiating lower prices based on international benchmarks.

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Details of the Executive Order

Sam Stein points out the initial promises versus the actual content of the order:

[02:04] Jonathan Cohn: "Trump promised an immediate reduction in drug prices by 30% to 80%, which the executive order does not deliver. Instead, it mandates that the administration determine what other countries pay and negotiate with drug manufacturers to align U.S. prices accordingly within a set timeframe, potentially around two months."

Key points discussed include:

• Scope of Drugs Affected:
  The order does not specify which drugs will be targeted, leaving it open to interpretation and future rule-making.

  [03:49] Jonathan Cohn: "It does not specify which drugs or outline the exact mechanisms for enforcement."

• Legal Authority and Limitations:
  The discussion touches on the constitutional and legislative boundaries of the executive order, particularly concerning Medicare and Medicaid.

  [04:15] Jonathan Cohn: "While the executive branch has substantial authority through Medicare to experiment with payment models, extending this to Medicaid or private insurance would likely require congressional action, which is currently unlikely."

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Political Dynamics and Inverted Politics

A significant portion of the discussion focuses on the political irony and inversion occurring with Trump's approach to drug prices, traditionally a progressive issue.

Sam Stein introduces a clip from RFK Jr., highlighting the unexpected alliance:

[06:38] RFK Jr.: "This is the fulcrum of Bernie Sanders' agenda. Trump is ushering it in."

The conversation reveals:

• Unexpected Endorsements:
  Despite being a Republican, Trump’s actions align closely with long-standing Democratic promises to reduce drug prices, creating a unique political twist.

  [07:15] Jonathan Cohn: "This concept is philosophically aligned with Bernie Sanders and the broader Democratic Party's stance on drug pricing."

• Historical Context and Biden's Role:
  Cohn contrasts Trump's executive order with President Joe Biden's efforts, noting Biden's legislative achievements in allowing Medicare to negotiate drug prices, albeit in a more limited capacity.

  [08:00] Jonathan Cohn: "Biden prioritized leveraging Medicare to negotiate prices, an underappreciated accomplishment that was slowly implemented due to strong pharmaceutical lobbying."

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Potential Outcomes and Industry Response

The discussion moves toward the feasibility and potential effectiveness of Trump's executive order.

[09:53] Jonathan Cohn: "There’s a possibility that some drug companies might voluntarily reduce prices to appear cooperative, allowing Trump to declare a victory even if substantive changes are minimal."

Cohn expresses skepticism about the administration's commitment and capability to enforce significant changes:

[10:05] Jonathan Cohn: "I don’t see the Trump administration effectively following through on this. Historically, they lack persistence in such initiatives, often settling for superficial wins."

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Conclusion and Future Implications

Sam Stein wraps up the conversation by reflecting on the broader implications of this policy shift:

[10:34] Sam Stein: "This move by Trump not only impacts drug pricing but also sets the stage for future administrations to build upon, illustrating the 'horseshoe theory' of political convergence."

Jonathan Cohn concurs, highlighting the cyclical nature of political strategies:

[10:57] Jonathan Cohn: "Trump’s actions could pave the way for a more committed effort by subsequent presidents, regardless of party affiliation, to tackle high drug prices."

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Key Takeaways

1. Executive Order's Intent vs. Reality:
   While Trump’s executive order aims to reduce prescription drug prices by enforcing international price parity, the actual measures are less aggressive than initially promised.

2. Political Irony and Alignment:
   A Republican president advancing a policy long championed by Democrats showcases a significant political inversion, blurring traditional partisan lines on drug pricing reforms.

3. Legal and Practical Challenges:
   The lack of specificity in the order and potential legal hurdles may limit its immediate effectiveness, with substantial resistance likely from the pharmaceutical industry.

4. Potential for Future Policy Development:
   Trump's actions may lay the groundwork for more comprehensive reforms by future administrations, regardless of political affiliation, highlighting the enduring challenge of high drug prices in the U.S.

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Notable Quotes with Timestamps

• [00:28] Jonathan Cohn: "We pay much more for our name brand prescription drugs than every other economically developed country."

• [02:26] Jonathan Cohn: "If the drug companies do not within the set timeframe bring down their drug prices, he is going to enforce reductions through mechanisms like importing drugs from abroad or imposing penalties."

• [06:38] RFK Jr.: "This is the fulcrum of Bernie Sanders' agenda. Trump is ushering it in."

• [07:15] Jonathan Cohn: "This concept is philosophically aligned with Bernie Sanders and the broader Democratic Party's stance on drug pricing."

• [09:53] Jonathan Cohn: "Drug companies might voluntarily reduce prices to look cooperative, allowing Trump to declare a victory even if substantive changes are minimal."

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Closing Remarks

Sam Stein and Jonathan Cohn provide a nuanced analysis of Trump’s executive order on drug pricing, exploring its potential impact, the political dynamics it encapsulates, and the broader implications for future healthcare policy in the United States. The episode underscores the complexity of drug pricing reform and the intricate dance between political promises and legislative execution.

Transcript

[Sam Stein]

Hey, guys, it's me, Sam Stein, managing editor at the Bulk, and I'm joined by Jonathan Cohn, author of the Breakdown newsletter, which is an essential read. We are going to be talking about a. Well, I don't want to call it big because it might not be that big, but we're going to be talking about an executive order that President Trump has issued this morning, which he teased last night on prescription drugs. Jonathan, let's just go through it. What is the order? Start there, and then I'm going to ask you about how big a deal it is.

[Jonathan Cohn]

Yeah, yeah. So maybe start like with the general concept of the order because, you know, what they're trying to do and then what they actually have done so far. So the basic concept here is that we pay much more for our name brand prescription drugs than every other, you know, economically developed country. And this has been true for a while. There's been this, you know, ongoing debate we've had in this country forever. So Trump's answer to that is he says, look, we're getting ripped off. So I want to basically go to these other countries and say, you know, find out what they're charging and go to the drug companies and say, hey, give us that. You need to charge us the. You need to charge us the same, you know, basically the same price or close to it, because we're getting ripped off. And if that means these other countries have to pay more, well, that's fine. They should pay more. And so we're going to make that happen. So that's the kind of concept of what they're trying to do. And he calls it most favored nation status. But, you know, the idea has been kicking around for a long time. And actually, you know, he tried a version of it, get into in a second in his last term. But so, you know, that brings us to where we are now.

[Sam Stein]

Okay, so we get a preview of this last night. It looks like a big deal by. It seems the tease is that by executive decree, a whole host of drugs, we don't know which ones, but a whole host are going to be either the price is going to be lower for us, they're going to be raised for foreign countries. Then he goes to the White House and he unveils the actual executive order. And that's not quite what it says.

[Jonathan Cohn]

Shocking, right? Shocking. That.

[Sam Stein]

Classic Donnie bait and switch. But yes.

[Jonathan Cohn]

Yeah, who would have thought that a Donald Trump hype post. I think he called it the most important, you know, truth, social, consequential truth post.

[Sam Stein]

Yeah. In history.

[Jonathan Cohn]

In History.

[Sam Stein]

What is the, what does the executive order actually say, though?

[Jonathan Cohn]

Yeah, and he said bring down drugs immediately, 30% to 80%. So it, you know, doesn't do any of that. What it does say is it says, look, we're going to, we're going to figure out what these other countries are paying for their drugs. We're going to go to the drug makers and we're going to say, you need to come and negotiate with us and get those prices down. And if you do not within a certain amount of time and you know, the window seems to be set the price in 30 days and I think there's two months, it's a little fuzzy. A lot of things in this are a little fuzzy. If they don't, if at that point the drug companies have not brought down their drug prices, then he is going to come in with a couple of sticks sort of enforcement mechanisms which could include importing drugs from abroad directly at lower prices. It could include some kind of penalties or this vague notion, you know, there's a sort of vague description of. Or we will come up with rulemaking, translation, we will come up with some kind of enforcement or threat or something that will force the drug companies to lower their prices. So that is what it says now.

[Sam Stein]

In the executive order, did he specify which drugs and did he specify what rulemaking authorities or rules they might issue?

[Jonathan Cohn]

No and no.

[Sam Stein]

Okay, so it could be a whole host of drugs or it could be a very finite group of drugs.

[Jonathan Cohn]

It does not specify, it does not specify what drugs. And there's really two ways when we talk about what kinds of drugs, right? I mean, there's which drugs, what kind of drugs? There's also the question of, so if you're going to get the prices down, well, for whom are these like the prices that for people who are on Medicare, is it the prices for people on Medicaid, is it for people buying with private insurance, is it everybody? And these are, you know, pretty big questions.

[Sam Stein]

And the effect now what, what is the legal limits as you understand it, for what kind of universe of drugs he can apply any executive order to? It strike me that maybe Medicare, Medicaid, but beyond that, we're getting into really dicey territory. And even Medicare, Medicaid might require an act of Congress. But what's your read?

[Jonathan Cohn]

Yeah, so, you know, this is a little fuzzy. You know, there's different laws that come into play here, but in general, through Medicare, the president does, the executive branch has a fair amount of authority through Medicare to test out new payment models and Then apply them. Interestingly, a lot of that authority comes from the Affordable Care act and Obamacare. I mean, the irony is here we can go into. We just spend the whole.

[Sam Stein]

Like, he did say he wanted to make Obamacare better. So there's that.

[Jonathan Cohn]

Yes, there you go. There you go. So he does. There is a fair amount of authority to introduce these through Medicare. At the same time, you know, there are, you know, there's all kinds of legal protections that corporations have. They have their rights. You know, they will sue. They will say this is, you know, and they will challenge it. So all of this would get litigated at length, which, by the way, is one of the reasons probably not gonna see an impact immediately. Obviously, if Congress were to actually pass a law saying that, you know, giving the president this power, then they would be on even stronger authority, whether, you know, and Congress could try to pass a law saying to the president, you know, you'd have authority to cover not just drugs and Medicare, but Medicaid in the private sector. But of course, that would be hard to do. And, you know, in fact, the lead up to this was Trump actually was introducing a version. It was suggesting to Congress, hey, include a version of this in your bill that's cutting Medicaid so you don't have to cut Medicaid so much. And the Republicans in Congress are like, yeah, no, dude, we're. This is not how we do.

[Sam Stein]

Oh, no. He explicitly said we can. We could generate tons of savings if you include the favor nature status in your bill, and then we could turn that into less Medicaid cuts. He said it explicitly, actually. That leads me to my next question, which is talk a bit about this kind of like, inverted politics here. In fact, RFK Jr. Was, you know, asked to come up at the press conference and we'll play the clip. He said, you know, this is the, I think, the fulcrum of Bernie Sanders agenda. So let's listen to that.

[RFK Jr.]

This is an extraordinary day. This is an issue that, you know, I grew up in the Democratic Party, and every major democratic leader for 20 years been making this promise to the American people. This was the fulcrum of Bernie Sanders runs for presidency, that he was going to eliminate this discrepancy.

[Sam Stein]

All right? So, I mean, there you have it. It's like RFK Jr. Kennedy. Whatever you say about his current status, he's a Kennedy. Talking about how this is the fulfillment of Bernie Sanders dream and it's Donald Trump ushering it in. Of course, none of this is totally true, but there is some Inversion in the politics here.

[Jonathan Cohn]

Yeah, this is. We're talking approvingly of rfk, you know, a week after we were doing this for Laura Loomer, and I'm really feeling a little bit upside down, I gotta tell you.

[Sam Stein]

To the bulwark. Yes.

[Jonathan Cohn]

What a world. There's something to that. I mean, this concept of, you know, using the government to bring down government health, drug prices and using, you know, the prices paid abroad as a kind of reference point for that is actually. Yeah, that's something. Bernie Sanders, you know, that conceptually at the philosophical. Absolutely. A kind of Bernie Sanders idea. Not just Bernie Sanders. I mean, most of the Democratic Party. I mean, this is a kind of Democratic Party.

[Sam Stein]

Well, speak to what Joe Biden did. Speak to what Joe Biden did in his term in office on this front.

[Jonathan Cohn]

Yeah. So, I mean, Joe Biden really made a priority to finally get, you know, Democrats have been talking about having the government use leverage on prescription drugs forever, which in this context is 20 or 30 years. And, you know, they've been trying to do it through Congress and just pharmaceutical lobby owns Congress. It owns is most powerful lobby in Washington, arguably has sway over Republicans, has sway over a lot of Democrats too. So it was just a hard slog. They did finally pass something. You know, I continue to think one of the most important accomplishments of the Biden presidency and underappreciated accomplishments, which gave them a bunch of power to different powers to reduce prescription drugs, including the power to actually negotiate prices directly with drug makers over a handful of drugs in Medicare. So, you know, they got something done. It's modest, it's taking forever to roll out. I mean, there is a certain irony here in that if Trump. You can imagine a scenario where Trump, because he doesn't pay, even doing an executive order would take persistence and really careful crafting. And let's say he doesn't really follow through on that because he never has before. But the drug companies, handful of them, being savvy, say, ah, we'll announce we'll reduce a few prices in a way that doesn't really reduce them, but it'll look big, he'll declare a win. I mean, there is a, like, I can imagine a scenario where basically Trump gets up at a press conference, says, look, these prices came down. He declares victory. He gets the good headlines for doing something much less than Biden, who actually got something done but never was able to sell it.

[Sam Stein]

So you think the prices will come down. I saw there was people taking bets about whether or not this actually results in pharmaceutical prices coming down or whether this is just a headline grab email, who knows?

[Jonathan Cohn]

I mean, is there a scenario where I. Is there. Is it possible again, you know, some drug companies voluntarily sort of see an easy way to do something most here?

[Sam Stein]

Yeah, sure.

[Jonathan Cohn]

You know, yes. Do I see this, you know, resulting. I, I just. There's. There's a version of this where a committed president really works through the process, and within a year or two or three, we really, you know, this really happens. I just don't see the Trump administration do that because that's not the way they roll, you know, Never is. I will say this, though. I mean, when Trump did it last time and didn't follow through, that did soften the ground for then what Biden did. So you can imagine this, you know.

[Sam Stein]

Well, all of this is going to soften the ground, right? I mean, when you start pushing this stuff from the conservative perspective, it does invite the next liberal president, say, well, you know what? I'll do what he did and take the baton from him. So, yeah, it's the, the horseshoe politics theory actually does have a role to play here. All right, Con, thank you, man. Really appreciate you unpacking this stuff for us. Have fun at the Sox game tonight, buddy. Kind of jealous.

[Jonathan Cohn]

I will. I will be there thinking of you.

[Sam Stein]

I appreciate it.