“Donald Trump said he was going to allow Medicare to negotiate drug prices. He never did. We did.”

Vice President Kamala Harris at the ABC News presidential debate, Sept. 10

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Since Vice President Kamala Harris entered the presidential race, she and former President Donald Trump have sparred over their approaches to lowering prescription drug costs. Harris has described this as an important campaign promise that Trump made but didn’t deliver on.

“Donald Trump said he was going to allow Medicare to negotiate drug prices,” Harris said during the ABC News debate on Sept. 10 in Philadelphia. “He never did. We did.”

She previously told CNN that Trump’s promise to pursue such negotiations “never happened” during his administration.

During the 2016 presidential campaign, Trump repeatedly promised, if elected, to take steps to allow the government to negotiate drug prices. He never enacted such a policy in office. The Trump administration pursued smaller, temporary programs aimed at lowering drug costs.

However, experts say the effect of Trump’s moves fell far short of the expected effect of the Medicare drug price negotiation program included in President Joe Biden’s Inflation Reduction Act and of what Trump promised.

Medicare Drug Price Negotiation Policy, Explained

The Inflation Reduction Act — a sweeping climate and health care law Biden signed in August 2022 — included a measure authorizing the Centers for Medicare & Medicaid Services to negotiate Medicare prescription drug prices directly with pharmaceutical companies.

“The idea behind drug price negotiation is that Medicare can use its buying power to get a better price than what is currently being negotiated for these drugs,” according to Juliette Cubanski, deputy director of the Program on Medicare Policy at KFF, a health information nonprofit that includes KFF Health News.

Medicare covers more than 67 million Americans, giving it enormous potential influence over prices for U.S. drugs and medical services.

In August, CMS announced it had secured significant discounts on the list prices of 10 drugs because of its negotiations. Those discounts ranged from a 38% reduction for blood cancer medication Imbruvica on the low end to a 79% cut for diabetes drug Januvia on the high side. (List prices and the prices Medicare drug plans pay can differ.)

The new prices are expected to save Medicare $6 billion in the first year, with Medicare beneficiaries set to save an additional $1.5 billion in out-of-pocket costs, according to the White House.

Those new prices aren’t set to take effect until 2026 — though Biden and Harris have highlighted other aspects of the law that are bringing down drug costs sooner, such as a $35-a-month out-of-pocket price cap on insulin for Medicare enrollees and a $2,000 yearly out-of-pocket spending cap for Part D drugs effective in January. The Part D program covers most generic and brand-name outpatient prescription drugs.

CMS will start negotiating prices for the next group of drugs — 15 a year for the next two years — in early 2025, and those talks will continue annually at least through the end of the decade.

Trump’s Promises Versus His Actions

As a presidential candidate in 2016, Donald Trump pledged to pursue prescription drug price negotiation programs — and sometimes overstated such a policy’s power to cut prices.

During multiple campaign rallies and media interviews that year, Trump suggested allowing the government to negotiate drug prices directly with manufacturers would save $300 billion a year, a claim a fact-checker said was “absurd” then.

“The problem is, we don’t negotiate,” Trump said during an MSNBC town hall in Charleston, South Carolina, on Feb. 17, 2016. “We’re the largest drug buyer in the world. We don’t negotiate.” He went on to say: “If we negotiated the price of drugs, Joe, we’d save $300 billion a year.”

Similarly, at a Feb. 24, 2016, rally in Virginia Beach, Virginia, Trump reiterated his interest in making this change. “If you bid them out we’ll save $300 billion … and we don’t even do it. We’re going to do it.” The pharmaceutical industry would push back, he said, but he added: “Trust me I can do it.”

In office, however, Trump backed away from those promises, rejecting a bill spearheaded by then-House Speaker Nancy Pelosi to authorize such negotiations. The Democratic-led House ultimately passed that legislation, though the Republican-led Senate didn’t consider it.

“Pelosi and her Do Nothing Democrats drug pricing bill doesn’t do the trick,” Trump wrote on X, the social platform then known as Twitter.

Trump pursued smaller initiatives that sought to lower drug costs. One such program, the “ most favored nation” model, tried to cap the cost of some Part B medications — those administered in a doctor’s office or hospital outpatient setting — at the lowest price paid in certain peer nations with a per capita GDP of at least 60% that of the United States.

“Medicare is the largest purchaser of drugs anywhere in the world by far,” Trump said in announcing the program. “We’re finally going to use that incredible power to achieve a fairer and lower price for everyone.”

The Trump campaign didn’t respond to an inquiry about prescription drug price negotiations or the most favored nation model.

The program would have started in January 2021 and lasted seven years. CMS officials estimated the government would save more than $85 billion on Part B spending. But some of those savings came from assumptions that Medicare beneficiaries would lose access to some Part B medications under the model, with some manufacturers unlikely to sell products at the lower, foreign prices.

Trump’s program never took effect. Amid lawsuits from several drug companies and industry groups, a federal judge stayed the plan in December 2020. The Biden administration scrapped it in 2022.

Even if the most favored nation model had been enacted, experts say it wouldn’t have come close to saving Americans or the government as much money as the IRA’s drug price negotiation provisions. A contemporaneous analysis of Trump’s proposal estimated that 7% of the 60 million Medicare beneficiaries in 2018 would have benefited.

More importantly, the most favored nation model did not authorize the government to negotiate prescription drug prices with manufacturers — the policy Trump promised to implement.

What Comes Next?

A recent KFF poll shows 85% of Americans, including more than three-quarters of Republicans, favor allowing Medicare to negotiate prices with drug companies.

And lowering drug costs continues to be a key issue for both campaigns, with Trump and Harris sparring over everything from the price of insulin to the impact of the Inflation Reduction Act on Medicare spending.

“I’ll lower the cost of insulin and prescription drugs for everyone with your support, not only our seniors,” Harris told supporters at an Aug. 16 campaign event in Raleigh, North Carolina, promising to extend the IRA’s price caps.

A Trump campaign spokesperson, meanwhile, previously told KFF Health News that the former president “will do everything possible to lower drug costs for Americans when he’s back in the White House, just like he accomplished in his first term.” She provided no specifics.

Trump, however, has also repeatedly promised to repeal parts of the Inflation Reduction Act — though he has never specifically mentioned the drug price negotiation provision — and to rescind unspent money. Congressional Republicans have spoken publicly about their intentions to roll back the drug price negotiation provision.

Even without legislative changes, the next president will have the opportunity to steer Medicare’s prescription drug price negotiation process.

“An administration that wants to be more lenient on drug companies might be more lax in the negotiations process,” said Tricia Neuman, a senior vice president at KFF and the executive director of its Program on Medicare Policy. “Or the administration could perhaps be tougher than the Biden administration.”

Our Ruling

As a presidential candidate in 2016, Donald Trump promised to let the government negotiate prescription drug prices directly with pharmaceutical companies. As president, however, he instead tried to tie some U.S. drug prices to their costs in other countries. Drugmakers and industry groups sued, challenging the move, and courts blocked it.

Harris, therefore, is correct that Trump never was able to open Medicare up to drug negotiations despite his sweeping campaign promises.

We rate Harris’ claim True.

©2024 KFF Health News. Distributed by Tribune Content Agency, LLC.