Trump Praises Pharma, Slams Insurers: How Two Industries Took Opposite Paths to Protect Their Profits
Insurers and pharmaceutical companies, both facing existential threats to their profits this year from President Donald Trump and congressional Republicans, were forced to make a choice: stand firm and fight, or back off and cut some deals.
Insurers chose to fight the threat; drug companies chose to make deals to limit the damage. The early outcomes tell an interesting story. This month, Trump attacked what he called "money-sucking insurance companies" on Truth Social and announced plans to redirect their Obamacare funding to patients. Two days earlier, however, he stood alongside pharmaceutical companies that had agreed to lower prices, called the CEOs "great, talented people" and friends, and said he didn't begrudge them their profits: "They're entitled to the money because the companies are very successful".
The insurers' chances of securing their top priority - an extension of the heavily expanded Obamacare subsidies introduced during the pandemic and now set to expire - look grim. Meanwhile, Trump's threatened 100 percent tariffs on the pharmaceutical industry remain on hold, contingent on further agreements.
Trump's contrasting posture toward two of Washington's most powerful rival sectors has become a case study for lobbyists trying to figure out how to deal with an unpredictable president and his populist governing style: currying favor helps, fighting back is risky.
"Is it smarter to play an inside game or an outside game? In Washington today, if you play the inside game of direct engagement, you're more likely to get positive outcomes with the administration", said Jonathan Burks, executive vice president for economic and health policy at the Bipartisan Policy Center, who served as chief of staff to then-House Speaker Paul Ryan during Trump's first term.
Late Wednesday, Trump signed a bill ending the record-long government shutdown without any plan to extend the enhanced Obamacare subsidies, Democrats' top demand. AHIP, the leading insurance industry trade group, had lobbied intensely for an extension. It spent more than $4.2 million on lobbying from July through September its highest amount ever for that period and the twelfth-largest of any entity in Washington. The organization is also part of the Keep Americans Covered coalition, which has repeatedly argued that allowing the subsidies to lapse would be bad policy.
Chris Bond, senior vice president for communications at AHIP, said the group will not change course.
"We will continue to work with [Keep Americans Covered] to highlight the urgency of protecting 24 million Americans from a severe cost-of-living crisis next year and to ensure that policymakers have all relevant facts and data available to them", he said.
Insurers' precarious position stands in stark contrast to that of the pharmaceutical sector. Drugmakers have largely avoided public confrontation with the administration and instead sought agreements in light of Trump's tariff threats and Health Secretary Robert F. Kennedy Jr.'s criticism of their products. So far, five pharmaceutical companies including Pfizer, AstraZeneca, and Eli Lilly - have struck deals with the White House to provide price concessions in exchange for tariff delays. According to analysts, the agreements will have only minimal effects on prices.
Players across the health sector have poured record sums into Washington this year as Republicans push to cut health programs to finance tax reductions, immigration-enforcement measures, and defense spending. AHIP spent more than $13 million in the first nine months of the year, surpassing its total expenditures for all of 2023 and the previous year. The lobbying expenditures of the Pharmaceutical Research and Manufacturers of America, representing brand-name drugmakers, have reached nearly $30 million more than in almost any year of the past decade.
Individual companies have also ramped up activity. UnitedHealth has spent $9.2 million so far this year - more than in any other year in at least a decade and Elevance poured $2 million into lobbying in the third quarter, its highest for that period in four years. The July-September lobbying totals of Amgen, Gilead, Johnson & Johnson, and Regeneron were the highest ever recorded for that time frame.
Insurance lobbyists said they spent most of the year talking with Congress and the White House about the effects of nearly $1 trillion in Medicaid cuts included in the Republican One Big Beautiful Bill Act. Signed in July, the law is projected to leave 10 million Americans uninsured as the cuts take effect over the coming years. AHIP hired three outside lobbying firms this year and expanded its lobbying roster by 11 percent, according to data from OpenSecrets, an organization that tracks the role of money in politics. Keep Americans Covered whose members include AHIP, the American Medical Association, and AARP launched a seven-figure advertising campaign urging Congress to extend the tax credits.
"[Insurers] are in a tough environment because Trump is trying to consolidate all the power. A lot of money is being taken out of the system, and they don't have as many reliable friends as they used to", said one lobbyist representing insurance companies, who requested anonymity to discuss strategy.
Over the weekend, Trump attacked insurers again and urged Republican senators to give the money directly to Americans so they can buy their own coverage - a move that could severely undercut Obamacare. "Take it away from the BIG, BAD insurance companies, give it to the people, and end, per dollar spent, the worst health care in the world, ObamaCare", he wrote on Truth Social.
