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In Trump-GOP Tsunami, Blue-State Healthcare Ideas Swamped

Xconomy National — 

[Updated, 11/9/16, 1:20 p.m. See below.] The 2016 U.S. election is over. The country has been rocked by the presidential race, with Donald Trump taking the White House.

Every facet of American policy, our attitudes toward power and governance, even our national character will be topics of debate in coming months. Our healthcare system will be a large part of that. Today, however, there are only a few concrete indications of what will—or won’t—be happening.

One of the nation’s most closely watched state measures, California’s Proposition 61, which was put on the ballot to rein in state spending on prescription drugs, was defeated, 46 percent to 54 percent, despite Sen. Bernie Sanders’s last minute, full-throated endorsement tour of the Golden State. More than 60 percent of Californians also voted for Hillary Clinton, a sound rejection of Trump. It didn’t matter. The “No” campaign raised more than $100 million and underlined concerns that the proposition, as written, could lead to unintended consequences.

It’s too early to predict if the defeat of Prop. 61 will jibe or clash with federal healthcare policy under a Trump administration. Trump said on the campaign trail he wanted to give the federal Medicare program the right to negotiate drug prices—an idea that is anathema for the drug industry. It remains to be see if he wants to follow through on that impulse, or other ideas to rein in prices such as reimportation of lower-cost drugs. Even if he does, a Republican-controlled Congress isn’t likely to comply.

“Today is a massive win for the drug companies,” says Adams Dudley, director of the Center for Healthcare Value at the University of California, San Francisco.

[Added the following three paragraphs.] The “No on 61” campaign issued a brief formal statement. When asked if the campaign would now pivot to fight drug-price controls in other states or in Washington, DC, spokeswoman Kathy Fairbanks said the coalition came together strictly to fight Prop. 61, but all members weren’t necessarily natural allies. “We were able to bring it together because 61 was not the way to lower drug prices,” she said.

Until now, popular discontent and a drumbeat of bad press around people like Martin Shkreli and products like the EpiPen has nudged some drug makers toward exploration of pay-for-performance schemes, in which costs of drugs would rise or fall based on patients’ outcomes. In a statement this morning attributed to its CEO Stephen Ubl, the industry lobbying group PhRMA made a nod to what it called the proliferation of “alternative payment models and novel decision tools.”

But there’s a long way before anyone knows if those experiments will work, let alone bring down drug costs. It’s also unclear if the massive change in the nation’s capital will ease pressure on the industry to try alternatives. The negotiations next year to re-up the FDA’s five-year funding plan, always a contentious exercise, will be a prime forum for the drug-price debate. Keep an eye on who leads the Health and Human Services department transition. HHS oversees FDA, the Centers for Medicare and Medicaid Services, and the National Institutes of Health. Names of potential HHS secretaries are already in play, including Newt Gingrich and former Republican presidential candidate Ben Carson, a neurosurgeon.

Other states could still test drug-price controls. Even Ohio, which voted for Trump and re-elected its Republican senator Rob Portman in Tuesday’s historic election, is scheduled to vote on the same issue a year from now.

But in California—the bluest of blue states—voters have said no to Prop. 61. And in Colorado, which also voted for Clinton yesterday, another Bernie Sanders endorsement went down in flames, as voters soundly rejected statewide single-payer healthcare.

Looming larger is whether Republicans will dismantle the federal Affordable Care Act, which Trump has promised to do “on day one,” and what, if anything, they will offer as a replacement. Early in the campaign, Trump seemed to leave open the possibility of keeping intact the coverage for millions of poor and uninsured who didn’t have insurance before Obamacare.

It would be easy to say the pharmaceutical industry is celebrating. The drug stock indices jumped 11 percent when markets opened this morning. But the U.S. is in uncharted territory. Some of the ideas, promises, and threats that have buoyed Trump to the top—high tariffs, anti-immigrant policies, dismissal of science-based research—might end up having a far greater impact on drug makers, and on healthcare writ large, than the smaller victories gained on November 8.

Photo of Donald Trump courtesy of Michael Vadon via Creative Commons.