(A)Political - August 2nd

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Happy Friday! Let’s get into the political heat!

The administration announced a renewed drug-pricing push targeting list prices and rebate practices, previewing executive actions and possible legislation on Medicare negotiations, importation pilots, and expanded transparency rules. President Donald Trump removed BLS Commissioner Erika McEntarfer hours after a weak jobs report and sizable downward revisions, installing an acting chief as debate intensifies over data revisions, survey response rates, and the bureau’s independence. Newly declassified records from Special Counsel John Durham’s investigation describe 2016 contacts between the Clinton campaign and FBI personnel about Trump–Russia allegations, triggering Republican calls for follow-up action and denials from former campaign and bureau officials.

• Trump Vows To Take On Big Pharma With Drug Prices

• Trump Fires Bureau Of Labor Statistics Chief After Poor Jobs Data Report

• Declassified Probe Proves Clinton Campaign Was Complicit In Manufacturing Russian Interference In 2016 Campaign

Trump Vows To Take On Big Pharma With Drug Prices

_{By: Atlas}

President Trump has opened a new front in his economic crusade: prescription drug prices. In a volley of letters to 17 of the world’s biggest pharmaceutical companies, he demanded immediate steps to bring U.S. prices down to match what rich countries pay—warning that if the industry balks, his administration will “use every tool in our arsenal” to force the issue.

What Trump Is Demanding

The letters lay out a blunt, four-part plan. First, drugmakers should extend “most-favored-nation” (MFN) pricing to Medicaid—meaning the program would pay no more than the lowest price charged for the same drug in any peer economy. Second, for all newly launched medicines, companies must pledge that Americans won’t be charged more than patients abroad, across Medicaid, Medicare, and commercial plans. Third, manufacturers should sell certain high-volume, high-rebate drugs directly to patients and employers at those MFN prices, cutting around the pharmacy benefit managers who dominate today’s negotiations. Fourth, when companies raise prices overseas with U.S. trade support, the gains are supposed to be plowed back into lowering costs for American patients.

It’s part price cap, part distribution shake-up, and part trade play. The White House is giving the companies a firm window—roughly two months—to come back with binding commitments. In tone and substance, it’s more aggressive than prior nudges, and it’s aimed squarely at a statistic the administration repeats often: Americans, who are about 5% of the world’s population, shoulder a vastly outsized share of global pharma profits while paying several times what other wealthy countries pay for the very same pills.

Industry Pushback—and a Market Jolt

Wall Street noticed. Shares in several large drugmakers slipped on the news, with pressure especially visible among multinational corporations whose revenues depend on U.S. list prices and rebates. Generally speaking, public statements from the companies gave the following sentiment: they’re open to discussions on access and affordability, but they argue that “importing foreign price controls” would sap innovation, harm clinical pipelines, and ultimately deprive patients of breakthrough therapies. The industry trade group emphasized that the MFN concept—tying U.S. prices to the lowest abroad—amounts to price-setting by another name.

Several CEOs also pointed to the notorious complexity of the U.S. supply chain. In their view, the middlemen—pharmacy benefit managers—pocket large rebates while patients see little relief at the pharmacy counter. Trump’s letters do try to address that by forcing direct-to-consumer or direct-to-business channels at MFN rates for certain drugs. But even that raises questions: Which medicines qualify? How do you ensure safety and continuity of care if distribution shifts away from established networks? And what happens to employer plans built on rebate economics?

Still, not every industry voice is in total opposition. A few leaders have conceded that the U.S. can’t permanently subsidize lower prices everywhere else and that some version of “price equalization,” adjusted for national income, may be inevitable over time. That nuance hints at room for negotiation—just not on the sweeping terms the White House is currently demanding.

Can the White House Make It Stick?

The realities are as legal as they are political. A previous attempt at an MFN model ran into court challenges and stalled. Courts questioned whether the executive branch had the authority to impose a reference-pricing formula that effectively pegs U.S. rates to other countries’ price controls. The current package tries to sidestep that by making compliance “voluntary”—but pairing it with the threat of unspecified consequences if companies don’t sign on. What those consequences are, exactly, remains the pressure point. Rulemaking? Purchasing restrictions? Tariff linkage? Expanded use of existing discount programs? Any move that feels like unilateral price-setting will invite another legal fight.

There’s also the problem of scope. The letters target Medicaid outright and hint at expectations for Medicare and commercial insurance on new launches. But large chunks of spending are on older brand-name drugs and biologics with entrenched pricing and coverage rules. MFN on new drugs wouldn’t immediately touch those bills. The administration’s push for direct sales at MFN prices could help some patients quickly, especially the underinsured who pay cash today. Yet building parallel sales channels—at scale—can’t happen overnight without snarling logistics and coverage.

Then there’s the trade lever. The White House says it will help drugmakers negotiate higher prices overseas so that foreign health systems pay a “fair share.” In theory, that could narrow global price gaps without crushing U.S. margins. In practice, national health services are tough bargainers with political constituencies of their own, and many cap drug budgets by law. Success here likely requires country-by-country deals and time—time the administration insists patients don’t have.

What It Could Mean for Patients

If even part of this plan lands, the immediate winners are likely people who pay cash or face high deductibles for brand-name treatments. Direct purchase at MFN pricing could turn a $600 monthly refill into something far lower, without waiting on insurers or copay cards. Medicaid beneficiaries would also see durable savings if MFN becomes standard. Over a longer horizon, tying U.S. launch prices to overseas levels could slow the climb of list prices that ripple through the system.

But there are trade-offs. Manufacturers may prioritize launches in countries that permit higher introductory prices or delay launches where MFN linkages could push global prices down. Companies could also try to recoup lost U.S. revenue by narrowing patient-assistance programs or tightening commercial discounts. And on the innovation question, while the industry tends to overstate existential threats, there’s genuine concern that a blunt MFN regime across channels would hit the riskiest, most expensive R&D bets first—rare disease gene therapies, oncology platforms—where pricing flexibility often funds the science.

For patients, the most helpful near-term reforms may be the least dramatic: capping out-of-pocket costs at the pharmacy counter, forcing rebates through to consumers at the point of sale, and banning certain practices that keep cheaper competitors off the market. Those don’t make headlines like a global price parity demand, but they immediately change what people pay.

The Road Ahead

The next few weeks are the test. The administration wants signed commitments by a date certain; drugmakers will likely counter with narrower pledges—pilot programs for direct sales, limited MFN for specific categories, and promises to accelerate discount pass-throughs. Expect a flurry of D.C. activity as both sides seek legislative cover: the White House to shore up authority, the industry to define limits. Watch, too, how much of this morphs into trade diplomacy; if a handful of U.S. allies agree to higher prices in exchange for other concessions, the global “freeriding” argument changes.

For years, presidents of both parties have vowed to lower drug costs and collided with a system designed to resist simple fixes. Trump’s campaign is different in its ferocity and its willingness to tie pricing, trade, and distribution together. That doesn’t guarantee victory. But it does force a reckoning: either companies volunteer meaningful relief, or the White House will try to impose it—and take the legal and political risks that follow.

The bottom line for Americans paying at the counter is as straightforward as the letters themselves: lower prices, faster.

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