Senator J.D. Vance’s positions on healthcare run counter to the Republican Party’s traditional views in which government meddling in the market is usually seen as a problem, not a solution. The vice presidential candidate has voiced support for several interventionist federal government policies. In key areas, Vance’s healthcare policy stance echoes former President Trump’s, which suggests subtle shifts may be underway within the GOP towards less of a purist free market ideology.
Former President Donald Trump tapped J.D. Vance as his running mate and vice presidential candidate this week.
Vance has been actively involved in a number of issues related to health and healthcare. For example, as a venture capitalist Vance invested in life sciences companies exploring gene therapies and precision medicine. He has made his voice heard on the opioid crisis. Vance’s memoir, Hillbilly Elegy, depicts his own family’s struggle with opioids in rural Ohio. And like many Republicans, Vance opposes gender-affirming care for minors and is against abortion. At the same time, he supports accessibility to the abortion pill mifepristone, despite many conservatives wanting the drug banned.
And regarding healthcare policy, while it’s hard to glean much from Vance’s voting record thus far as Senator, given that he has only been in the Senate for 18 months, from statements and interviews it’s evident that he holds certain positions that “buck his party,” according to The Hill.
What stands out in particular is that Vance hasn’t been in favor of GOP efforts to repeal the Affordable Care Act, known as Obamacare. Politico notes that he has, for instance, cited the importance of the ACA’s legal protections for people with pre-existing conditions. The law stipulates that health insurers may not refuse coverage or charge a person more because of pre-existing health conditions.
In key areas, Vance and Trump are aligned on healthcare. Notably, Vance doesn’t believe a full-throated laissez-faire approach to healthcare will fix all problems in the system. He embraces an important role for government, as does Trump, which is consistent with the brand of economic populism favored by both men.
In an interview with AARP in 2022, Vance said he supports allowing Medicare to negotiate drug prices, which is an important provision in the Inflation Reduction Act, signed into law by President Biden in 2022. Conspicuously, in the run-up to the 2016 election, Trump advocated Medicare drug price negotiations during the campaign. And while President he issued executive orders that would have instituted a “most favored nations” drug pricing policy. This would have required pharmaceutical firms to sell certain drugs to Medicare for the lowest price that they offer to a number of comparable nations in terms of per capita gross domestic product. The use of international price referencing was staunchly opposed by many fellow Republicans.
During former President Trump’s first term in office, his Administration offered a “blueprint” proposing the “most sweeping action in history to lower the price of prescription drugs for the American people.” The Department of Health and Human Services set out to improve ways in which the market functioned through increased transparency, hoping to offer consumers more and better information. Importantly, HHS also proposed explicit government-led measures aimed at reducing prices paid by patients for prescription drugs at the pharmacy counter.
Trump signed executive orders designed to, in his words, “completely restructure the prescription drug market.” These included the afore-mentioned most favored nation proposal, but also a possible overhaul of the pharmacy benefit manager rebate system in Medicare’s outpatient program, Part D.
Rebates are payments from drug manufacturers to PBMs in exchange for moving market share toward preferred products on the formulary. Decades ago, federal regulations established a so-called safe harbor for PBM rebates that precludes them from being treated as kickbacks. Trump’s executive order would have narrowed the safe harbor for rebates considerably under the anti-kickback statute.
Effectively removing the safe harbor exemption would have forced PBMs to either forgo rebates entirely, or pass them on directly to Medicare beneficiaries.
While ultimately these executive orders weren’t implemented, one of Biden’s signature laws, the Inflation Reduction Act, has for the first time authorized Medicare to negotiate the prices of limited subset of prescription drugs. In addition, PBM rebates, administrative fees and spread pricing (PBMs charge health plans and employers a higher price for medications than what they pay pharmacies, keeping the difference as profit) are now under intense scrutiny by the Federal Trade Commission and Congress. FTC is currently involved in a protracted investigation of PBMs and their alleged anti-competitive business practices.
Vance has praised Lina Khan, Chair of the FTC, for her antitrust enforcement work and “building a more competitive marketplace.”
This fits the populist message Vance and Trump want to convey in which there’s more oversight vis-à-vis drug companies, PBMs and other large corporations and the government is ensuring constituents aren’t disadvantaged by the healthcare system.