Ex-Trump officials argue Biden’s drug pricing efforts are ‘backfiring’

A health care policy group led by a pair of former Trump administration officials argued in a memo Wednesday that the Biden White House’s efforts to negotiate drug prices for Medicare recipients are doing more harm than good.

The Health Market and Policy Network issued a memo first obtained by The Hill one day before the Biden White House will reportedly detail the savings from the first Medicare negotiations on the price of 10 prescription drugs. 

“We understand the temptation to see this as a win. But the evidence continues to mount that there is no such thing as a free lunch,” the memo states.

The group is run by Joe Grogan, who previously ran the Domestic Policy Council in the Trump White House, and John Czwartacki, a former top aide in the Office of Management and Budget and the Consumer Financial Protection Bureau.

Democrats in 2022 passed the Inflation Reduction Act, a sweeping climate and health care law that, among other things, gave the federal government the ability to negotiate with drugmakers over the price of prescription drugs for Medicare recipients. The White House has touted those provisions as a major cost-saving effort for seniors.

“The cost of price controls is steep, and the program’s effects are backfiring on all of us,” the Health Market and Policy Network memo states. The group called for bipartisan fixes to the Inflation Reduction Act “before more harm befalls seniors.” 

The memo cites projections from the Center for American Progress that the program would save billions, a number the Health Market and Policy Network called deceptive. 

The group also argued the increased cost of coverage has caused some plans to leave the market, leaving seniors with fewer options. The memo cites a decision by Mutual of Omaha Rx to leave the Medicare prescription drug plan market at the end of 2024, which the group attributed to the impact of the Inflation Reduction Act.

The Health Market and Policy Network also pointed to a study showing a decrease in clinical trial starts in 2023 compared to 2022 and 2021, though much of the decline was attributed to a drop in COVID-19 trials.

Medicare will eventually be able to negotiate the prices of 20 drugs under the Inflation Reduction Act, but President Biden in his State of the Union address earlier this year proposed expanding that number to 50 and bringing more drugs into the program sooner.  

The Inflation Reduction Act also requires drug companies to pay rebates to Medicare when prices increase faster than the rate of inflation for certain drugs. Health officials then adjust the cost of drugs that qualify for savings under the program. 

While the law was sweeping, many of its biggest health provisions only apply to Medicare rather than the commercial market, because Democrats had to scale it back in order to pass it through the Senate.