Trump's Policies Will Cause Prescription Drug Prices to Soar!

On November 6, 2024, the results of the high-profile US election were finally announced, and the return of the Trump era indicates what kind of changes the US health care policy, as one of the core issues of voter concern, will undergo in the future.

The medical insurance system of the United States is a complex and multi-level structure, with commercial insurance as the main body, integrating various forms of medical insurance, including:

Commercial health insurance: This type is market-oriented and has higher costs.

Affordable Care Act (commonly known as Obamacare) : Aims to expand health insurance coverage and reduce health care costs. The law provides insurance subsidies to help low-income people pay for coverage and says insurance companies cannot charge discriminatively based on a policyholder's health status or other factors.

Medicare: The federal health insurance program that primarily serves people 65 and older and people with certain disabilities.

Medicaid: The federal Medicaid program that provides health insurance to low-income people, with states setting different income standards and coverage depending on their circumstances.

The Children's Health Insurance Program (CHIP) provides health insurance for children in families that earn slightly more than Medicaid but cannot afford to buy private insurance.

Veterans Health Insurance: Provides health insurance for veterans and active duty military personnel.

In addition, there are differences in health insurance policies among states in the United States, such as the implementation of mandatory health insurance policies in California, where residents who do not purchase health insurance face a penalty on state tax returns.

Health insurance policy in the United States is currently facing multiple challenges, including declining life expectancy, rising health insurance costs, and the impact of the COVID-19 pandemic on the public health system. These issues force the U.S. Department of Health and Human Services (HHS) to re-examine its mission to provide health and well-being services to all Americans.

Mirror 2024 notes that there are "outliers" in U.S. health care spending, where inputs are grossly disproportionate to outputs. Since 1980, the United States has been one of the highest health care spenders among the ten developed countries, spending 16.5% of GDP on health care in 2022 and projected to exceed 20% by 2035. While the share of U.S. residents without health insurance has fallen to a record low, about 26 million people, or 7.8 percent of the population, are still uncovered. About a quarter of workers who have health insurance are underinsured. The irony is that people do not necessarily get better health care, even though they pay higher prices. Compared with many developed countries, many Americans do not have regular doctors or health clinics and have difficulty accessing medical care outside of work hours.

The Biden administration has taken a number of steps to address issues related to health insurance. The issue of drug pricing has been a focus of the Biden administration. Under the Reduction of Inflation Act (IRA), the United States implemented for the first time a drug price negotiation program for Medicare for people 65 and older. On Jan. 1, 2026, negotiated prices for the first 10 drugs will go into effect and are expected to average 38 percent to 79 percent lower than current wholesale purchase prices, saving Medicare enrollees about $1.5 billion in out-of-pocket costs in 2026.

The passage and implementation of the IRA could have a profound impact on the drug market, including lower drug prices, changes in new drug development strategies, and adjustments in health insurance coverage. However, the pharmaceutical industry has reacted strongly since the drug price negotiations were implemented, with a number of large pharmaceutical companies filing lawsuits against the federal government, claiming that the negotiating program is unconstitutional and impeding innovation. At the same time, nonprofit groups such as the American Association of Retired Persons (AARP) welcomed the move, arguing that the steps CMS took could help bring down out-of-control prescription drug prices. The American Association of Retired Persons (AARP), for example, said it "applauds" CMS for taking the next critical step to bring down runaway prescription drug prices.

The US election has far-reaching implications for health insurance policy. The results of the election directly affect the development and implementation of Health and Human Services (HHS) policy, including the direction of health insurance policy reform, funding allocation, and focus on specific groups. Under different administrations, HHS's mission and policy direction will vary. For example, under President Trump's leadership, HHS is committed to serving all Americans, including those individuals and families facing challenges to their economic and social well-being. Under President Biden, HHS's mission changed to "promote fairness in all things," with a special focus on people with specific characteristics such as race, sexual orientation, and gender identity. The general election is not only a change of political power, but also a starting point for changes in medical insurance policy.

Since Trump's election victory, reforming the US healthcare system has become one of the central issues. Combining Trump's past health care policies and campaign promises, his health care policy can be roughly divided into several key parts.

At the macro health policy level, Trump advocates weakening or even repealing the Affordable Care Act to promote flexibility in the health care market by reducing government intervention. During one debate, Trump reiterated his negative views of the Affordable Care Act, calling it "terrible health care." However, when asked about alternatives, he did not offer specific proposals, mentioning only that there was a "concept of a plan".

Drew Altman, CEO of the Kaiser Family Foundation (KFF), a health policy research organization, analyzed that the Trump administration may cut federal health spending in order to achieve tax cuts and reduce the role of the federal government in the medical field.

On drug pricing, Trump made it clear during the campaign that he would push for lower drug prices. Indeed, in the final months of his last term, Trump issued two executive orders aimed at reducing prescription drug costs: The first was to ban PBMS from taking rebates on discounted drugs purchased by seniors in Medicare; The second is an attempt to impose a "most-favouried-nation" pricing model, ensuring that Medicare does not pay more for drugs than the lowest drug prices in other developed countries.

As we look ahead to 2025, the U.S. Department of Health and Human Services (HHS) faces unprecedented challenges and opportunities. Under Conservative leadership, HHS plans to implement a series of profound reforms aimed at returning to its core mission: to provide health and well-being services to all Americans at all stages of life.

In 2025, health insurance policy in the United States is expected to be transformed in seven ways:

1. Change of policy positioning

(1) During the campaign, President Trump proposed: Protecting life, conscience, and physical integrity. The new policy will place greater emphasis on upholding fundamental rights to life, conscience and bodily integrity, and oppose the inclusion of abortion and euthanasia in the health care system.

(2) Patient choice and healthcare provider autonomy will be enhanced. Policies will support patient-centered health care reforms that increase individual control in health care decisions and provider autonomy.

2. Medicare reform

(1) Empower Medicare beneficiaries to have more choices, including doctors, hospitals, and insurance plans.

(2) Reduce the regulatory burden on physicians and healthcare providers so they can focus more on patient care.

Ensure the sustainability of Medicare, promote value-based payment models, and reduce waste, fraud, and abuse.

3. Medicare Advantage and private plans

(1) Encourage direct competition between Medicare Advantage and private plans to provide richer benefits.

(2) Simplify the payment model and replace the complex formula based payment model with a competitive bidding model.

(3) Remove restrictions on key benefits and services.

4. Medicaid reform

(1) Reform financing mechanisms to provide states with more flexible, predictable, and transparent financing to provide health services.

(2) More effectively deliver funds directly to beneficiaries and eliminate national financing loopholes.

Make program integrity a top priority to ensure that taxpayer investments are protected.

5. Reforms in other key areas

Remove regulatory barriers to direct primary care (DPC) and ensure that fixed care fees for DPC do not constitute insurance in a health savings account.

(2) Repeal the dispute resolution process in the No Accidents Act and adopt a truth in advertising approach to protect consumers.

(3) Remove barriers that reward patients for making cost-saving decisions.

6. Increased transparency and accountability

Transparency, accountability, and oversight: Strengthen oversight of public health institutions to prevent undue influence by pharmaceutical companies, insurance companies, and hospital groups. Ensure that regulators are not influenced by private biopharmaceutical funding and close the revolving door between government and Big Pharma.

7. Anti-abortion and pro-family policies

(1) Prohibit the use of taxpayer funds to support abortion travel.

(2) Stop funding organizations that perform abortions.

These changes suggest that U.S. health insurance policies in 2025 are likely to place greater emphasis on protecting the right to life, promoting individual choice, improving efficiency and equity in care, and enhancing regulatory transparency and accountability.