Outgoing GOP chairman urges colleagues to oppose Trump drug pricing proposal

Outgoing Senate Finance Committee Chairman Orrin Hatch (R-Utah) wrote a letter to GOP colleagues on Wednesday urging them to oppose a proposal from President Trump to lower drug prices.

Hatch’s letter, obtained by The Hill, is an illustration of the divide among Republicans over proposals to lower drug prices, with some Republican lawmakers breaking with Trump.

{mosads}The letter outlines opposition to Trump’s proposal in October to lower certain Medicare drug prices by linking those prices to lower costs in other countries, an idea well outside of mainstream Republican proposals.

Hatch’s letter, sent to other Republican senators on the Finance Committee, warns Trump’s proposal would “dampen research and development—depriving patients of future treatment breakthroughs and further eroding necessary competition.”

Drug companies are also fiercely opposed to Trump’s proposal, warning it would harm innovation.

Hatch had in recent weeks discussed the possibility of organizing a letter from multiple GOP senators with concerns about the proposal, sources said. But the Trump administration lobbied GOP senators to hold off on publicly criticizing the proposal, an effort first reported by Politico. Hatch’s letter sent Wednesday is only signed by him, not other GOP senators.

Still, the Trump administration faces headwinds in moving forward with the proposal. Sen. Chuck Grassley (R-Iowa), the incoming chairman of the Finance Committee, has also criticized the idea. A Grassley spokesperson earlier this month warned the plan would impose “price controls.”

Hatch said drug prices do need to be lower, but warned colleagues that “free-market principles” are “vastly superior to importing international price controls into the Medicare program.”

The Trump administration defends its proposal by arguing Medicare currently pays essentially whatever price drug companies want for certain drugs, and that system needs to change. 

Hatch criticizes not only the proposal but also the authority it is based on, known as the Center for Medicare and Medicaid Innovation, which was created by the Affordable Care Act. Hatch warns that center can have too much power to make changes to Medicare without congressional approval.