Health care is a vulnerabilityfor the president entering his re-election, and his budget proposalreleased Monday projects billions in unspecified drug-costsavings.

(Bloomberg) –President Donald Trump is considering executiveaction to cut drug prices ahead of the 2020 election, officialsfamiliar with the matter say, as he enters his re-election seekingto rebut Democratic criticism that his policies have hurt U.S.health care.

If he proceeds, Trump would force drug companies to accept lowerpayments from Medicare for treatments administered in doctors'offices, such as Bristol-Myers Squibb Co.'s immune-boosting Opdivofor cancer and Regeneron Pharmaceuticals Inc.'s Eylea for eyeconditions. The rule would apply to certain drugs bought by the"Part B" section of Medicare, the program for the elderly anddisabled.

Related: Sens. Sanders, Booker propose new agency to policedrug prices

Health care is a vulnerability for the president entering hisre-election, and his budget proposal released Monday projectsbillions in unspecified drug-cost savings. He is undernear-constant attack from Democrats for seeking to overturn the Affordable Care Act withoutoffering an alternative proposal of his own to guarantee access tohealth insurance. He has also been criticized for claims that hispolicies have lowered drug prices.

"I'm calling for bipartisan legislation that achieves the goalof dramatically lowering prescription drug prices. Get a bill on mydesk, and I will sign it into law immediately," Trump said in hisState of the Union speech last week.

The next day, Vice President Mike Pence said on Fox News thatTrump supports a bill co-sponsored in the Senate by RepublicanChuck Grassley and Democrat Ron Wyden that aims to reduce Part Bdrug spending among other changes to Medicare.

Contentious bills

In response to the line, many Democrats in the House chamberstood and shouted "H.R. 3" at the president, the bill number forlegislation the House passed last year that would force drug makersto negotiate prices with Medicare. The White House opposes theHouse bill and isn't going to change its position, one officialsaid. Meanwhile, Senate Majority Leader Mitch McConnell hasn't yetendorsed the Grassley-Wyden bill.

Some Republican lawmakers have criticized a provision of thelegislation that would penalize drug makers for raising prices forcertain medications faster than inflation, calling it a "pricecap."

Trump's two-track approach — hoping for legislation, butpreparing his own plan that would undermine congressionalnegotiations — illustrates the president's anxiety about hishealth-care record. "There are a number of different things that wecan do. I know the president is looking at other measures as well,"White House counselor Kellyanne Conway said last week.

Trump's budget proposal, issued Monday, projects savings due to"comprehensive drug pricing reform" totaling $36.5 billion between2021 and 2025. It doesn't say how. The administration "eased up onspecifics" of drug price cuts in the budget in order to giveCongress more latitude, Office of Management and Budget ActingDirector Russ Vought told Fox News on Monday.

Under the rule he's considering formally proposing, Trump wouldorder reimbursement for certain Part B drugs to be tied to what'sknown as the International Price Index. That would mean a price cutfor many medicines, since the prices drug makers charge outside theU.S. are often set by government-run health-care systems and aregenerally lower. Medicare doesn't use its position as a big buyerof drugs to bargain for lower prices.

Officials working on the plan have not yet settled on many ofits details. The Trump administration first proposed the approachin 2018. Three officials familiar with the matter said it remainsunder consideration and has not been ruled out, despite Trump'sendorsement for the Grassley-Wyden bill.

Rollout worries

The White House is wary of repeating its messy rollout of newvaping restrictions, a person familiar with the deliberations said.The White House announced a vaping crackdown last fall beforewaffling publicly for months and ultimately walking it back.

The drugs that would be affected by any Trump action are amongthe costliest taken by Americans. They include innovative therapiesfor cancer, immune disease and other disorders. The industry saysthat Part B pharmaceutical spending makes up just3 percent of overall Medicare costs.

The pharmaceutical industry warns the move could damage itsprofits and take away incentives to invent new treatments.

"We have to confront really bad ideas like importation, Medicaresetting the price or, you know, letting the French health ministerset our prices," Stephen Ubl, president of the pharmaceuticalindustry's lobbying arm, the Pharmaceutical Research andManufacturers of America, said in an interview last month. "We needto push back on principle. There is no middle ground on thoseareas."

Carol Lynch, head of the North America unit of Sandoz, a genericand biosimilar drugmaker owned by Novartis AG, said Monday at aconference in New York that it would be "rather difficult toimplement" an index to international prices. "I imagine that priceswill go up elsewhere in the world" to fund innovation, Lynchsaid.

Policy downsides

Unilateral action would cause at least two difficulties for thepresident. Signing legislation to reduce Medicare spending on thedrugs would generate official budget savings that Congress couldhave applied to other health-care legislation — bills to expandinsurance coverage or reduce other drug spending, for example.Executive action taken before a bill's passage would remove a keybargaining chip, and likely reduce the scope of a health-care billexpected in the coming months.

The president might also hurt himself on the campaign trail.Tying prices paid by Medicare to an international index thatincludes countries with nationalized or government-run health-caresystems would undercut one of Trump's favorite criticisms ofDemocratic proposals: they represent "socialism."

"The president rails against socialist medicine, but he'swilling to import socialist pricing models into the United States,"James Greenwood, who leads the Biotechnology InnovationOrganization, an industry group, said at the New Yorkconference.

Health care contributed to Trump's party losing control of theHouse of Representatives two years ago, after Republicans in thechamber voted for an Obamacare replacement that could have led toinsurers charging higher prices to sick people. Democrats assailedTrump and his party for trying to strip away Obamacare protectionsfor people with pre-existing conditions.

Democratic presidential candidate Michael Bloomberg has zeroedin on Trump's health-care policies in an aggressive televisionadvertising campaign, drawing the president's ire. Bloomberg is theco-founder and chief executive of Bloomberg LP, the parent companyof Bloomberg News.

"While radical Democrats propose radical plans that woulddestroy the health insurance of millions of Americans, PresidentTrump continues to work to improve health care more broadly,including creating a system that protects the vulnerable and thosewith pre-existing conditions and delivers the affordabilityAmericans needs, the choice and control they want, and the qualitythey deserve," White House spokesman Judd Deere said in astatement.

Read more: 

• Trump officials changing drug pricing plan asbipartisan Senate bill gets blocked
• Conservatives not a fan of Trump's drug pricingreforms
• Unsupported price increases netted drugmanufacturers $5.1 billion

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