Every businessperson understands the “art of the deal” has little to do with art and everything to do with leverage.
But as we discovered when President Donald Trump released his long-promised plan to lower drug prices, the business of politics often trumps real-world business principles. Nowhere in the ironically titled “American Patients First” blueprint is there any requirement for Medicare to negotiate directly with drug manufacturers. So, despite all of Trump’s rhetoric and promises, pharmaceutical companies and their lobbyists won, and seniors lost. Patients are not the first priority after all.
I was heartened by President Trump’s often-repeated campaign promise to leverage Medicare’s purchasing power to rein in runaway drug costs. From a business perspective, allowing Medicare to seek lower prices — the way the Veterans Administration does — is a no-brainer. As the single largest payer for healthcare in the U.S., Medicare is the gateway to a vast marketplace including 42 million seniors and people with disabilities covered under Part D — who happen to be the highest-volume consumers of pharmaceuticals.
I assume that when Trump built hotels and golf courses, he used leverage to get a better deal. Why isn’t he doing it on behalf of Americans? Is it because he’s mired in the political swamp he promised so famously to drain?
Perhaps we shouldn’t be surprised since President Trump recently replaced the head of Health and Human Services with a former president at Eli Lilly and board director of a major pharmaceutical lobbying group. On the day Trump announced his plan, major pharmaceutical indices rose by almost 2 percent and have either maintained or increased in value since. Why? Because investors realize Trump’s plan gives drug companies a “free pass” to continue excessive profiteering from elderly and poor Americans.