A private business was shaken down last week, and no one stepped in to help.
President Trump publicly bullied Pfizer over the pharmaceutical company’s drug prices. It was a regrettable repeat of the gangster government practiced by previous administrations, and which we fear is becoming the norm in this one.
Candidate Trump promised to do something about the pharmaceutical industry and its runaway drug prices. Laws and policies to that end are within Trump’s power, considering his party now controls Congress and Democrats say they share that goal. But instead of taking action in that lawful manner, Trump complains that the makers of life-saving medicines are “getting away with murder,” issuing a series of threats to somehow coerce better behavior out of self-interested corporations.
Pfizer was singled out when Trump tweeted that they “should be ashamed that they have raised drug prices for no reason.” Three days later, the company appeared to succumb when it agreed to temporarily roll back scheduled price hikes. Predictably, Trump took a victory lap tweeting that the halt was “great news for the American people.”
Trump must have tweeted before reading the details of the agreement, though. Pfizer said they will boost drug prices again either at the end of the year or after the administration gets their recent drug pricing proposal into law. Most analysts peg the chances of new legislation at zero percent, meaning that consumers will enjoy slightly cheaper Pfizer products for all of six months.
Meanwhile the drug companies Trump didn’t name are going about their business as usual. Trump can’t bully an entire $446 billion industry.
Because of his background, it is understandable that Trump would try to cut deals with business. But as president, he shouldn’t be haggling for a la carte deals with private companies. When the president comes to the negotiating table with the full weight of the state behind him, the result of such bespoke deals is bound to be cronyism, targeted attacks, or some tawdry combination of both.
Trump’s flirtation with gangster methods reminds us how Republicans condemned this sort of thing when Barack Obama was president.
The Obama administration had no problem with resorting to intimidation when the law wasn’t enough to make citizens act the way they wanted. They didn’t just threaten like Trump, of course. They actually became intertwined with business, buying up shares of two automobile manufacturers in the aftermath of the Great Recession. Predictably, they used the resulting leverage to reward friends (like the United Auto Workers) and punish enemies (like other creditors).
The UAW were unsecured creditors, entitled to nothing in bankruptcy, yet they received 50 cents back of every dollar they invested. Chrysler’s secured creditors — a group that included public pensions, teacher retirement investments, and others — received only 29 cents on the dollar and a series of threats public and private from the White House, despite holding a higher priority for repayment.
One investor gave in, allegedly under threat that their opposition to the deal would be remembered by a vengeful White House press corps who “would destroy its reputation.”
Trump’s actions have not reached that point yet, but his rhetoric is approaching it. He regularly threatens private businesses like Amazon, Lockheed Martin, and Harley-Davidson, blasting them for not buying into his economic vision and calling for their downfall. It’s the behavior befitting third-world strongmen or machine bosses, not U.S. presidents.
The president is right to take on the prescription drug problem. The president is wrong to adopt the gangster government techniques of his predecessor.
