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

Episode Date: May 12, 2025

Trump issued a new executive order on drug prices. Sam Stein and Jonathan Cohn unpack what it actually does, what it claims to do, and how it stacks up against past policy efforts.

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with expert AI tools. Build, scale, and enjoy the incredible results. You can do it all yourself on Wix. Hey guys, it's me, Sam Stein, managing editor at The Borg, 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. Yeah. Yeah. So maybe start like with the general concept of the order because 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 to get into in a second in his last term. But so, you know, that brings us to where we are now. Okay. So we get a preview of this last night. It looks like a big deal by, it seems the teases 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

lowered 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. Shocking, right? Shocking that a Donald. It's a little classic Donnie Bain switch, but yes. Yeah. Who would have thought that a Donald Trump hype post, I think he called it the most important truth social post. Consequential truth post, yeah, in history.

In history. What does the executive order actually say though? Yeah. He said bring down drugs immediately 30% to 80%. So it doesn't do any of that. What it does say is it says, look, 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 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 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, in the executive order, did he specify which drugs and did he specify what rulemaking authorities or rules they might issue? Nope and no. Okay. So it could be a whole host of drugs or it could be a very finite group of drugs. 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 pretty big questions and the effect that this is. Now, what is the legal limits, as you understand it, for what kind of universal drugs he can apply any executive order to? It would 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? Yeah. So, you know, this is a little fuzzy. You know, there's different laws that come into play here. require an act of Congress, but what's your read? Yeah. So this is a little fuzzy. 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 spend the whole like he did say he wanted to make Obamacare better. So there's that. Yes, there you go. There you go. So he does.

And 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. They will sue. They will say this is, 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 going to 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, 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 it. 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 that 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 asked to come up at the press conference, and we'll play the clip. He said, this is the, I think, the fulcrum of Bernie Sanders' agenda. So let's listen to that. 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 has 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.

All right. So, I mean, there you have it. It's like RFK Jr., Kennedy, whatever you say about his current status, he's 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. 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 playing a little bit upside down, I got to tell you. Welcome to the Boer, yes. Yeah, I mean, what a world. There's something to that. I mean, this concept of, you know, using the government to bring down government 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 level, 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. Well, speak to what Joe Biden did. Speak to what Joe Biden did in his term in office on this front. 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 owned is the most powerful lobby in washington arguably has sway over republicans has sway over a lot of democrats too so it's just a hard slog they did finally pass something i 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, I mean, you can imagine a scenario where Trump, because he doesn't pay, you know,

getting, even doing an executive order would take persistence and really careful crafting and, you know, let's say, you know, 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. 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. Who knows?

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 yeah sure you know yes uh 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 doing that because it'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. 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 to 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, Colin. Thank you, man. Really appreciate you unpacking this stuff for us. Have fun at the socks game tonight, buddy. Kind of jealous. I will be there. Go Sox.

I appreciate it. Running a business is hard work. Building your website shouldn't be. With Wix, you can express your ideas, give direction, then leave the heavy lifting to AI. From site creation to branded content and images. Have fun with the details.

Customize what you want the way you want and manage your whole business from a centralized dashboard with expert AI tools. Build, scale, and enjoy the incredible results. You can do it all yourself on Wix.