The president is resorting to a risky executive order to force down prescription drug prices.
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Quack
Quack: President Donald Trump speaks with reporters in front of the
West Wing of the White House, Thursday, May 8, 2025, in Washington. Credit: Associated Press
As early as Monday, according to Politico,
President Donald Trump is expected to issue an executive order that
will look like smart politics on its face, but it’s really a sign of the
president’s political weakness.
Trump “plans to revive an effort to dramatically slash drug costs by
tying the amount the government pays for some medicines to lower prices
abroad, three people familiar with the matter told POLITICO. Early next
week, Trump is expected to sign an executive order directing aides to
pursue the initiative, called ‘most favored nation,’ for a selection of
drugs within the Medicare program.”
Lowering prices is smarter than raising prices, which Trump has spent more time doing with his tariff orders.
But deeper into the story, we learn why Trump is trying to lower
prescription drug prices by executive order: He can’t get Republicans in
Congress to do it. Politico reported:
White House officials initially pressed congressional Republicans to
draft in their megabill a “most favored nation” provision tying the cost
of medicines in Medicaid to the lower prices developed countries pay
abroad.
But that bid ran into opposition across the GOP conference and is
unlikely to be included in the legislation, said one of the people
familiar with the matter.
The White House is instead now expected to try to advance the drug
price proposal on its own, using existing authorities to impose its
“most favored nation” model.
Only four months into his term, when a president’s political capital
should be at its most plentiful, and with Republican majorities in both
chambers of Congress working on a filibuster-proof budget reconciliation
bill, Trump is incapable of winning support for a cherished policy
proposal.
Government intervention in the drug market does not come readily to
most congressional Republicans. But most have been willing to run
interference for Trump’s decidedly unconservative tariff regime,
refusing to strip his tariff-setting powers. The previous Republican
president, George W. Bush, successfully pressured most Republicans to
add a prescription drug benefit to Medicare.
Sure, winning that vote required Bush and then-GOP congressional leadership to employ ethically questionable arm-twisting on the House floor, but such tactics seem quaint in the Trump Era. If that’s all it took to pass a bill, Trump would do it. That the 47th president isn’t even trying to do it exposes his waning influence on Capitol Hill.
With the legislative path closed, Trump is resorting to the executive
order, which is legally perilous. Trump knows this because he tried to
enact “most favored nation” unilaterally at the end of his first term,
and two federal courts blocked the order on procedural grounds. (The
Biden administration abandoned the Most Favored Nation policy, but in
the Democrats’ second budget reconciliation bill—the Inflation Reduction
Act—muscled through several other provisions that lower drug costs,
including empowering Medicare to negotiate prices. Some argue the most
favored nation plan won’t work because the drug companies can game the
process.) The pharmaceutical companies will fight Trump’s order to the
hilt and may well succeed in stymying it again.
In effect, Trump blew his political capital on the tariffs, sinking
his job approval numbers, and giving congressional Republicans reason to
question how tightly they want to tie their futures to his. Trump technically began his term as a lame duck, and now the lameness has started to have consequences.
The big unknown is whether this duck has become so lame that he can’t
get budget reconciliation passed. A growing threat was spotlighted
yesterday by Punchbowl News: the SALT caucus.
SALT refers to the state and local tax deduction, which used to be
unlimited, but Trump’s first-term tax package capped the deduction at
$10,000. The cap is a revenue raiser. As it tends to affect high-tax
blue states, red state Republicans tend to like it. As it tends to
affect upper-income households, some progressive Democrats like it too.
But six blue state Republican House members in the bipartisan SALT Caucus really hate it. Five of them—enough
to sink the bill—said this week that they are prepared to vote against
any budget reconciliation bill that doesn’t significantly raise the cap,
though they haven’t drawn a red line at a particular number. (Yesterday four House Republicans from New York issued a statement rejecting an offer to raise the cap to $30,000 as an “insulting” proposal that “risks derailing President Trump’s One Big Beautiful Bill.”)
Why haven’t they offered a number? Because the $10,000 cap is due to expire.
According to SALT caucus member Representative Mike Lawler of New
York, “If nothing passes, SALT comes back unlimited, so it is on
leadership to offer a number and negotiate from there. We are not
negotiating against ourselves.”
Of course, we’ve seen many House Republicans talk a big game about
bucking leadership and then fold. That may still happen again. But Punchbowl News observed yesterday:
This entire reconciliation package is a snake pit for moderate House
Republicans. Some have privately argued to us that they’d be better off
voting against it because of the cuts to Medicaid, SNAP and social
programs. But SALT is also an acute and immediate problem that
Republicans are nowhere close to solving.
What Lawler said is important—and is getting lost a bit in the debate
over the state-and-local tax deduction limit. The SALT cap will
disappear completely at the beginning of 2026 if Congress does
nothing—and that’s precisely what the SALT Republicans want. So these
members don’t have any incentive to cut a deal.
For a president who was going to be on the ballot again, a House
Republican would have more incentive, because such a commander-in-chief
could impress upon any member that defeating a major initiative would
end their presidency and take down the party, too. For example, in 1993,
months into President Bill Clinton’s first term, Senator Bob Kerrey
famously held out on a deficit reduction package until the last minute,
finally coughing up the deciding vote because “I could not and should
not cast the vote that brings down your Presidency.”
Trump can’t play that card. Again, that doesn’t mean the SALT caucus
or any other Republican faction will kill the reconciliation bill. But
Trump’s inability to add his drug price plan to the measure should worry
him and remind us that this duck is already lame.