Experts have raised concerns regarding the impact of recent pharmaceutical deals brokered by former President Donald Trump. These agreements, established through the TrumpRx platform, aim to provide discounts for cash-paying customers. However, analysts indicate that these initiatives are unlikely to significantly affect overall drug spending for most Americans.
Since September 30, 2023, the Trump administration has negotiated agreements with 14 pharmaceutical companies, primarily offering tariff relief. The arrangements tie U.S. drug prices to those paid in other affluent nations, reducing costs for Medicaid. Despite these efforts, the majority of insured individuals will likely benefit more from their existing insurance coverage than from the discounts offered through TrumpRx.
The deals primarily target individuals with Medicaid, who typically incur minimal or no copays for prescriptions. According to Juliette Cubanski, deputy director of the program on Medicare Policy at KFF, a nonpartisan health policy research organization, “Generally speaking, most people with insurance coverage will continue to be better off using their insurance to obtain medications rather than purchasing through the TrumpRx direct-to-consumer portal.”
A lack of transparency surrounds the specifics of these agreements, raising questions about their effectiveness. Richard Frank, director of health policy at the Brookings Institution, remarked, “There’s virtually nothing on paper about them except for press releases. It’s not clear.” A comprehensive list of the drugs covered by these deals has not been made public, though the White House has highlighted several medications, including Merck’s diabetes drug Januvia and Gilead Sciences’ hepatitis C medication Epclusa.
Some drugs included in these deals have already been subjected to price negotiations under President Joe Biden’s Inflation Reduction Act. For instance, while the cash price for Epclusa will be reduced to $2,425 from $24,920, many of the drugs named in the agreements are not among the most costly in the U.S. healthcare system. Art Caplan, head of the medical ethics division at NYU Grossman School of Medicine, pointed out that “some of the drugs that have been named aren’t among the costliest in the U.S. or they already have generic versions that are typically cheaper for patients.”
The structure of the TrumpRx platform, which facilitates cash payments, may not be the best fit for all medications. For example, the flu medication Xofluza must be taken within 48 hours of symptom onset, making it less suitable for an online purchasing model.
A White House spokesperson indicated that some lower prices would be available through TrumpRx in early 2024, with Medicaid discounts expected “in the coming months.” However, the administration has yet to provide comprehensive figures on anticipated out-of-pocket savings. This lack of clarity complicates efforts to assess the potential benefits of the program.
While TrumpRx may offer significant savings for individuals without insurance or those with high-deductible plans, the platform is unlikely to present a better option for most insured patients. According to Dusetzina, a health policy professor at Vanderbilt University, “Even with lower prices, we’re usually talking about hundreds of dollars per fill, and that ends up being a real problem for most people.”
Moreover, substantial discounts may still be unaffordable for many patients. “A 50% discount on a $500 drug is nothing to sneeze at,” Cubanski stated, “but a lot of people will still struggle to pay $250 out of pocket on a monthly basis.”
The potential for extending these pricing models to state Medicaid programs remains uncertain, as the details of the agreements have not been fully disclosed. Even if states pay less for medications, Cubanski noted that Medicaid enrollees might not see any savings at the pharmacy counter.
Trump’s initiatives come amid reports of rising drug prices. According to research from 3 Axis Advisors, drugmakers have implemented average price increases of around 4%, mirroring trends from the previous year. Frank expressed skepticism regarding the agreements, suggesting they might be rebranded discounts that pharmaceutical companies had already planned. “Until we see that there’s actually a real contract in place that is actually committing folks to a change in prices, it’s hard to say that anything is going to happen,” he stated.
The interplay between these pharmaceutical deals and soaring health insurance premiums complicates the landscape further. With enhanced Affordable Care Act subsidies having expired, health insurers have raised rates. Dusetzina emphasized that if individuals struggle to afford health insurance, they are unlikely to find prescription drugs, even at discounted rates, to be within their financial reach.
As the TrumpRx initiative develops, the true impact of these agreements on drug pricing and accessibility for American consumers remains uncertain. The lack of clear data and comprehensive drug lists poses challenges for effective evaluation and underscores the need for transparency in pharmaceutical pricing strategies.
