(Bloomberg Opinion) -- President Donald Trump is finally ready to follow through on his campaign promise to use the government’s power to negotiate drug prices. For one drug, and one agency.
The president offered to help Veterans Affairs secretary Robert Wilkie negotiate the price of a new Johnson & Johnson depression drug at a meeting Wednesday. Trump said he had “read really quite a bit” about the treatment, which he didn’t name but is almost certainly the newly approved ketamine cousin Spravato. He believes it could result in a big drop in veteran suicide.
If the president had read a bit more extensively, he might have discovered that Spravato hasn’t actually been proven to reduce the risk of suicide and has other issues. If he had done drug-pricing diligence, he might have found that the VA already gets good deals on branded medicines.
Spur of the moment individual interventions are a strange and inefficient way to deal with drug pricing. This crusade is another example of Trump’s preference for performative dealmaking in drug pricing and beyond – see the ongoing trade war – over actually making good policy.
This isn’t to say that inexpensive access to Spravato for veterans in crisis would be a bad thing. The drug can rapidly help with depression symptoms in patients and works in a different way than existing medicines, which take a while to work and aren’t effective for everybody. But it’s unclear if Trump’s intervention would get the VA a price that’s low enough to significantly change anything. Unlike other agencies, the VA can negotiate prices, and does so quite well.
One cheaper drug for one group is nice. There would be an even greater benefit to many more people if Medicare – which spends $100 billion more than the VA on drugs each year – could use its spending power to directly bargain with drugmakers. But the president has chosen smaller goals, and not just on Wednesday.
Trump's Food and Drug Administration does deserve some credit for its effort to speed generic approvals, especially for expensive older medicines. And the administration’s effort to clamp down on drug-plan managers in Medicare could reduce costs for some seniors. But it will raise premiums for others, may not actually bring prices down, and is projected to increase government spending. And Trump’s substitute for a broad effort at bringing drug prices down is a plan to index Medicare reimbursement for a subset of medicines to the lower prices available abroad. This would have an impact, but only for a limited number of beneficiaries – and only if the administration actually follows through on it.
We’re about a year removed from the president’s Twitter war with Pfizer Inc. over list-price increases. The company agreed to roll back price hikes and temporarily freeze the cost of its drugs, and Trump took a victory lap. Pfizer went on to increase prices on dozens of medicines a few months later, and there’s been no real pricing reform.
If Trump and J&J trumpet a big deal on Spravato in the next few weeks, take it with a grain of salt.
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Max Nisen is a Bloomberg Opinion columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.
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