'Worst idea since tariffs': WSJ's conservative editors beg GOP to block Trump's new whim
The Wall Street Journal's traditionally conservative opinion section trashed President Donald Trump's new idea to give Americans pricing relief as his "worst idea since tariffs," and potentially disastrous for prescription drug markets.
The conservative board has posted several times about the dangers of Trump's economic policy in recent months.
President Trump and the Republicans seem to be stepping back from revamping Medicaid, which isn’t even the most concerning part," stated the board. "In place of the reduced expenditure they can’t achieve with Medicaid, they might broaden drug pricing regulations. In exchange for this shift, we could end up with Democratic leadership instead.
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The board specifically stated that Trump’s proposal aimed to limit prices for prescription medications under Medicaid to the lowest rates found in other industrialized nations. However, they cautioned that this could lead to significant unforeseen repercussions and would not substantially offset the budget reductions proposed by Republicans. having trouble securing the necessary votes In their budget reconciliation proposal.
According to the report, Medicaid currently benefits from substantial discounts on medications through established formulas mandating pharmaceutical companies to return part of each medication’s cost as a rebate to states. In 2023, these Medicaid rebates represented 52% of total drug expenditures within the program. Following the removal of caps on such rebates by Democrats in 2021, certain state Medicaid programmes might end up paying nothing at all for some medications. The data indicates that prescription drugs constituted fewer than 4% of overall Medicaid expenses ($21.2 billion) last year. By contrast, federal funds allocated towards hospitals were tenfold greater. Even if Republicans mandated free provision of medicines to Medicaid recipients, potential savings would fall far short of $880 billion.
At the same time, they noted, this would end up being more expensive over time.
"Drugs actually reduce Medicaid spending by preventing complications that require expensive hospital care. Take hepatitis C antiviral drugs, which have a 95% cure rate. A treatment course can cost upward of $24,000. But the Congressional Budget Office estimates that expanding Medicaid patient access to these drugs would save $7 billion over a decade."
The genuine hazard, as stated by the board, is that pharmaceutical companies might opt out of Medicaid completely instead of accepting these prices, which could result in an increase in the number of individuals falling ill and potentially escalating Medicaid’s costs associated with treating preventable diseases that arise due to lack of medication.
"Drug price controls are a Democratic perennial," the board concluded. "If Republicans go along with Mr. Trump’s most-favored-nation plan, Democrats will invariably extend it to Medicare and the commercial market next time they control Congress. If Republicans lack the courage to reform Medicaid, they should at least do no harm."
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