What will happen to our Medicaid?
Only recently, House Republicans voted to pass a GOP budget plan that might lead to immense cuts to Medicaid, right after President Donald Trump leaned on a handful of conservative holdouts. The ultimate vote was 216 to 214.
The budget resolution requires Senate committees to identify spending cuts, adding up to a low floor of $4 billion, including controversial language that calls for the House Energy and Commerce Committee to cut $880 billion in programs over the next decades.
Speaking alongside Senate Majority Leader John Thune, Speaker Mike Johnson declared that Republicans want to find a minimum of $1.5 trillion in cuts. Johnson called for a vote on the legislation Wednesday evening to combat the uncertainty of it passing.
Before Thursday’s vote, Johnson decided to hold a joint news conference with Thune. The pair sought to reassure House conservatives that the GOP might cut significant spending, besides all the tax cuts that were already in place.
The budget plan is the upcoming step in unlocking the special fast-track power, also known as reconciliation, that Republicans are using to ram Trump’s big, beautiful bill through Congress. GOP lawmakers will need to fill in the details of their sweeping proposals, such as future Medicaid cuts.
Johnson and GOP leaders have constantly stressed that their bill doesn’t specifically cut Medicaid, a healthcare program for millions of disabled and low-income American citizens.
But Medicaid will more than likely get cut by almost $880 billion over a decade, even if Trump vowed not to cut either Medicaid or Medicare. Why did he change his mind?
Well, first of all, it’s hard to say if it was a change of heart or if he blatantly lied all along, but the reason for it is that both Medicaid and Medicare take up a large portion of the committee’s budget.
The federal government picks up the bulk of the tab for Medicaid spending. Starting in 2023, the federal share was around 72%. Three Senate Republicans, Sens. Josh Hawley, Lisa Murkowski, and Susan Collins, all joined Democrats in quite an unsuccessful effort to strip that language out of the plan, before it even passed their chamber.
Republicans will most likely have no choice but to slash the program in order to achieve the $880 billion in required cuts, much of which might ultimately hit Medicaid expansion.
Failing to meet the overall spending target could risk the sweeping policy bill losing its special procedure power. When that happens, Republicans won’t be able to ram their bill through the narrowly controlled Senate, where Democrats can use the filibuster to stop most other legislation.
The Trade War: Prescription drugs will be a target
Trump reimposed tariffs on the import of pharmaceutical products that have long been spared from past trade disputes, potentially harming the patients.
He also excluded them from his announcement of sweeping import tariffs last week, and even in the most recent weeks, he also introduced tariffs on raw ingredients and supplies from China, especially those widely used by the industry.
Moreover, the whole ordeal repeatedly singles out the manufacturing of drugs in Europe as a blatant issue he intends to tackle through other tariff announcements.
What’s his stance on the Pharma industry?
The Republican president has declared that major drugmakers like Eli Lilly, Johnson & Johnson, and Pfizer should continue manufacturing more of their medicines for American patients in the United States to efficiently lessen the dependency on other countries and increase their tax revenue.
Plenty of brand-name drugs are partly made in Europe. Ireland has one of the lowest corporate tax rates, and it is also a hub for the production of the active ingredients in blockbuster medicines, such as Lilly’s weight-loss injection Zepbound and Merck’s hugely successful cancer immunotherapy Keytruda.
Trump also criticized U.S. pharma companies for registering their own intellectual property in Ireland due to their low corporate tax rate. In his tariffs announcement on April 2, Trump also stated that the U.S. no longer produces enough antibiotics, which, like many other generic drugs consumed in the United States, are made in China and India.
Trump also declared it unfair that the United States pays more for brand-name drugs than other wealthy nations, especially in Europe. “These other countries are smart,” he declared.
“They say you can’t charge more than $88; otherwise, you can’t really sell your product, and the drug companies listen to them.” The U.S. doesn’t buy drugs straight for a national health system, like England and Germany.
Instead, they rely on the private sector to manage drug price negotiations for both government and private health issues. Only last year, the U.S. government started directly negotiating prices for a very limited number of drugs used by the federal Medicare health program, under former President Joe Biden’s Inflation Reduction Act.
What’s the industry’s response?
Drugmakers have been lobbying Trump to reconsider his tariffs on imported pharmaceutical products, to avoid the impact of charges and gain time to shift manufacturing.
Many drugmakers have declared they have plans to increase manufacturing investments in the United States, especially since Trump took office. Novo Nordisk and others have also cited ongoing efforts to produce more of their medicines for the United States market in the country.
Trade group PhRMA, for instance, said that building a brand new product facility in the United States will require $2 billion, and take somewhere between 5 to 10 years before it is even operational, including all the time and cost to meet regulatory requirements, backing up the industry argument for tariffs not being levied right away.
Some companies have also taken a weird and unusual step of sending more medicines by air from Europe to the United States. The purpose of it is to stockpile possible tariffs.
When could Trump announce new Pharma tariffs?
Trump’s executive order had pharmaceuticals listed alongside lumber, semiconductors, and other important sectors that might end up being subject to investigation under Section 232 of the 1962 U.S. Trade Act, in order to establish the effects of imports on U.S. national security. The investigation that was led by the Commerce Department needs to be completed 270 days after it was announced.
But this only creates more uncertainty, especially since President Trump stated he will temporarily lower new tariffs on many countries, while simultaneously raising them further on imports from China, in a sudden reversal that sent U.S. stocks sharply higher.
What kind of impact should we expect?
Industry executives and drug pricing experts explain that tariffs raise the risk of shortages of widely used, cheap generic medicines, like antibiotics, which makers simply can’t afford to keep on producing with the added costs.
Tariffs might also eat into the margins of expensive brand-name pharmaceuticals and biotech medicines. Drugmakers stated they might leave them with less money to invest in research and development for future medicines.
In the meantime, there’s a Measles outbreak in Texas
The Texas health department reported 541 cases of measles in the state on Friday, an increase of 36 cases from its previous count on April 8. Now, the United States battles an outbreak of the childhood disease that keeps crossing state borders.
Since becoming the Secretary of Health and Human Services, Robert F. Kennedy Jr., who has a long history of advocating against vaccines, changed sides and backed vaccination as the most efficient way to prevent measles from spreading.
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