The politics of prescription drug pricing

This is a rush transcript from "Special Report with Bret Baier," May 11, 2018. This copy may not be in its final form and may be updated.


PRESIDENT DONALD TRUMP: Today my administration is launching the most sweeping action in history to lower the price of prescription drugs for the American people. We are going to take on one of the biggest obstacles to affordable medicine, the tangled web of special interests. We are not going to reward companies that constantly raise prices. We are very much eliminating the middleman.

We will work with Congress to pass legislation that will save Americans even more money at the pharmacy.


BRET BAIER, ANCHOR: After a week of foreign policy the president turning his focus domestically, trying to get pharmaceutical prices down. How to do that is the real question. Drug pricing goals, increased competition in the drug markets, you heard him there, give Medicare Part D plans better tools to negotiate on behalf of senior citizens, decision new incentives for drug manufacturers, develop options to lower patients' out of pocket spending.

You have got these prescription drugs in the U.S., 18,000 plus approved and available, and this number, $328 billion spent on drugs. And 49 percent of Americans have used a prescription drug in the last 30 days. Amazing stats as you go down the line there.

Let's start there and bring in our panel: Steve Hayes, editor in chief for The Weekly Standard; Karen Tumulty, opinion writer for the Washington Post, and Mollie Hemingway, senior editor at The Federalist.

Karen, ambitious for the president to go down this road. We have seen other administrations try to do it. What about this?

KAREN TUMULTY, THE WASHINGTON POST: He did however back off of his campaign promise which was to have Medicare negotiate directly with the pharmaceutical companies for prices. That was the howitzer of all of this and he decided not to fire it. And so it's significant that after this was announced the stock prices of the pharmaceutical companies actually went up.

BAIER: Yes. So speaking of pharmaceutical companies, part of this, the HHS secretary said you had to adjust what's in ads. Take a listen.


HEALTH AND HUMAN SERVICES SECRETARY ALEX AZAR: Think about all of the time that everybody spends watching drug company ads on TV and how much information companies are required to put in them. If we want to have a real market for drugs, why not have them disclose their prices in the ads, too?


BAIER: So basically the HHS secretary saying transparency on pricing for drug companies.

MOLLIE HEMINGWAY, THE FEDERALIST: Yes, but to do that you would have to enact new regulations which I think a lot of the rest of the plan was about deregulating or streamlining how these drugs make it to the marketplace.

To the point about the stock market showing that -- it wasn't just drug companies but also the pharmacy benefit managers, their stocks also went up. I think that what was really interesting about the plan was that it does get more generics into the marketplace. That's really key. That's key for lowering the prices and its' the most substantial thing. The rest seems to be more about sharing among the different groups, who gets to get all this money? So it's also true if you're going to pass something like this you need Democratic support. It is going to be less robust than it was talked about, but I think it does have a change to get pretty big Democratic support.

BAIER: There are some levers, though, at HHS, that they can do outside of Congress. There's a lot of power there.

STEVE HAYES, THE WEEKLY STANDARD: Sure. HHS has a lot of power. That's why the president's announcements, these announcements are necessarily broad. You listed the goals. A lot will depend on how they roll it out and what the actual details look like. But I think on the matter of recruiting Democrats, it seems to me what the president did was take a step away, as Karen points out, from his campaign rhetoric. This is a less populist plan. It's something more in line with what a traditional Republican president might offer. And I think that will make it less attractive to Democrats in Congress if this in fact has a big push forward because it's not as government centric.

BAIER: Let's turn to the Russian investigation, specifically Cohen, part. Michael Cohen, the president's attorney has this contract with AT&T. We learned that they hired him January through December, a one-year contract, $50,000 per month limited to providing consulting and advisory services, apparently tied to the Time-Warner deal. The head of AT&T Randall Stephenson coming out telling employees it was a big mistake.

TUMULTY: Yes. And he was the second CEO to apologize for having hired Michael Cohen, the other being the head of Novartis, the drug company. It's not that any of this is illegal. In fact it's very much business as usual in Washington. It's just the influence industry is there. It's just new players in it. But is unseemly. These are the kind of deals that corporations hate to have put out in the open.

BAIER: Steve?

HAYES: Then they shouldn't do them, honestly. If they don't want to be exposed, don't do it. Look, this cuts against --

BAIER: But they are living in the swamp.

HAYES: Of course they want to make their best arguments. If they can pay somebody to make their best arguments for them, they'll do that.

This cuts against the heart of President Trump's campaign message. He was going to drain the swamp. This is the swamp. It's the swamp only swampier. I think that's why this is a political problem for the president. For the people who supported the president because they thought I am sick of Washington, D.C. I don't like the way that Washington operates. Everybody is scratching everybody's backs. It's payoffs here, it's kickbacks there. That's basically what this is.

BAIER: I want to rewind. This started with a lot of focus on the Russian oligarch tied to one of the companies. The company has denied that he was funding it for the money that made it to Cohen. We don't know that Mueller has, but what about where that Russia part of it stands and what we know about it?

HEMINGWAY: First off, I think it's worth remembering that the reason why this is even being discussed is because there was a leak by government officials of sensitive information. I don't know if that came from the Special Counsel, someone at the Treasury Department, somewhere else. That's a criminal leak. It's really inappropriate. And there has been a big problem with leaks from various investigations and it should be taken seriously.

And the problem with these amounts really is that the size and scope of government is so big. And if you want to drain the swamp, you have to deal with the size and scope of government. As long as it's this big, people are going to play this game. And the way that everyone is acting like totally surprised that this is happening, it's a little bit of silly naivete.

As for the trying to link to this to the Russian investigation, I think it's interesting that this attorney, Avenatti was trying to link it to Russia. That suggests that this information is part of this larger message about Russia. I don't think that case was actually made well except Russia is a country in the world that has global interests and they might have distant ties to some of these companies they're funding.

BAIER: What about the Nunes part and what they are not getting out of the DOJ as of yet, Karen?

TUMULTY: Well, at this point, it's been interesting that the White House has sided, and the Department of Justice are on the same side of this one. We haven't seen them in that position that often. So the Hill is going to continue to push, the Republicans on the Hill are going to continue to push for this source to be revealed. And the question really I think is going to be whether once the president understands that this source is also somebody who has been cooperating with the Mueller investigation, whether we are going to continue to see this united front.

HEMINGWAY: And I think that's what was so interesting about this Department of Justice leak to the Washington Post. By their own admission what they are saying is they have a top secret source who provides information to the CIA and the FBI who was getting information from the Trump campaign to develop this Russian story. That's a huge story. I don't know why the Department of Justice leaked that to the Washington Post. But that suggests also that it doesn't even matter really who the particular person is. But this is a new layer, a new piece of information that is definitely going to come out one way or other. And I can't imagine they are going to be very successful at keeping this new development a secret.

BAIER: Steve?

HAYES: You often hear the argument that we can't provide more information either to Congressional oversight committees or to the public because it would jeopardize the investigation. It would expose a source, what have you. And we just don't know enough at this point to know whether that's the case in this particular instance. But it is interesting. There have been leaks on both side of this. There have been obvious government leaks, but there have been leaks, and part of the reason that we know more about the nature of the original leak is because there have been counter-leaks. So it seems to me that if you're upset about leaks you've got to be upset about leaks on both sides.

BAIER: I just really, quite down the row -- how long do you think it takes before Mueller wraps up his probe?

HAYES: It's hard to say. I would say six months.

TUMULTY: I think it's going to depend on how long it takes to negotiate whether the president gets subpoenaed, whether the president goes in and testifies.

BAIER: But past the midterms it seems.

HAYES: He doesn't want it to go past the midterms I don't think. Mueller does not.

BAIER: Yes, but if they're going through this negotiation.

TUMULTY: But once you get too close to the midterms, then you don't want to do that either.

HEMINGWAY: I think there is a lot about the Mueller probe that is interested in saving face for the FBI and it's been difficult to do that. They don't have Russia collusion. The obstruction case is going to be difficult to make. They're moving on to other things. I don't know if it will wrap up soon.

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