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How much will TrumpRx reduce drug prices?

Karen Blum and Joseph Burns

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a pharmacist consults a patient at a drug store.

Photo: Freepik

Many questions remain unanswered about TrumpRx, the administration’s direct-to-consumer prescription drug referral site announced last month. For now, the idea that consumers could buy medications for what TrumpRx calls “the lowest prescription prices in America” sounds intriguing.

Any effort to sell prescription medications for less than what American consumers pay is welcome, given Price Waterhouse Coopers’ prediction that the cost of patients’ drugs would rise 10% next year, and overall medical costs would go up 8.5%. Those numbers are based on a survey of health insurance actuaries, the consulting firm said.

TrumpRx will not sell medications. Instead, when it opens for business early next year, it will “connect patients directly with the best prices, increasing transparency and cutting out costly third-party markups,” according to a brief explanation on the TrumpRx site on Nov. 1. In an executive order The Federal Register published in May, the administration said it would use most-favored nation (MFN) pricing, meaning U.S. consumers would pay no more for each prescription drug than the lowest price that Medicaid members pay and that consumers pay for those same medications in six wealthy, developed nations: Canada, France, Germany, Italy, Japan and the United Kingdom. 

MFN pricing is a form of external reference pricing that many countries and some U.S. companies use to control pharmaceutical costs by setting their prices at levels set in other markets, The Federal Register explained.

Questions journalists need to ask

When TrumpRx opens next year, journalists can ask how much consumers will save by shopping on the site when compared with other similar sites, such as the Mark Cuban Cost Plus Drug Company, or what consumers pay at their local pharmacy.

Other pressing questions include: When will TrumpRx open for consumers, and which drugs will be available for sale? To date, the Trump administration has announced deals with two drug makers — AstraZeneca and Pfizer — and with EMD Serono, which sells in vitro fertilization therapies. Under the deals AstraZeneca and Pfizer struck with Trump, both agreed to use MFN rates and both said specific terms of the deal are confidential.

“The administration contends that they have ‘secured multiple yet-to-be-unveiled deals,’” Adam Colborn, J.D., associate vice president of congressional affairs for the Academy of Managed Care Pharmacy, said during AMCP’s Nexus conference Oct. 28 in National Harbor, Md.

More questions:

  • How much will Medicaid members pay for drugs on TrumpRx versus the already low rates they pay under the existing Medicaid Drug Rebate Program? 
  • Which other drug companies will make deals to access the TrumpRx site?
  • How will the drug prices on the TrumpRx site compare with the prices available to consumers on GoodRx, which helps consumers find low-priced prescriptions?
  • Will MFN prices be lower than what those companies charge now? If so, how much lower? 
  • If many consumers buy their drugs on TrumpRx, will those sales take volume from chain drug stores or mom-and-pop stores?

How will patients benefit?

In an interview, Mariana P. Socal, M.D., PhD, said TrumpRx would need to provide more details about how it would connect drug manufacturers with consumers. An associate professor and researcher at the Bloomberg School of Public Health at Johns Hopkins University, Socal is an expert on making prescription drugs more affordable and accessible to consumers. 

“In the market today, we bypass insurers in many ways, but that’s usually when patient assistance programs are involved and the patient is not paying out of pocket,” she said. So far, TrumpRx has indicated that the patient would pay the drug manufacturer directly, without involving the insurer or the pharmacy benefit manager (PBM), she added. 

“The administration is framing this as a cost-saving strategy, because you are not adding margins for insurers or PBMs,” Socal explained. “But the biggest question is this: Will patients be able to afford these drugs by paying out of pocket without having insurance help, and also by not having those payments count toward their deductibles?”

Patients who might benefit from using TrumpRx are those who need lower-cost prescription drugs or medications that health insurers do not usually cover such as those for obesity and IVF, Socal noted. “In this way, it [TrumpRx] will address the needs of specific patient populations that are not getting any significant help from their insurance plans,” she added. “In those situations, patients may benefit from paying a lower price.”

But for patients who need very high-cost drugs, even paying a lower price out of pocket, some drugs may still be unaffordable for many consumers, she commented. 

Will insured consumers save money?

In an article for The New York Times, Rebecca Robbins explained that TrumpRx may have a limited effect on those 150 million Americans who fill their prescriptions with health insurance their employers provide. Robbins also quoted Stacie B. Dusetzina, Ph.D., a health policy expert on drug pricing at Vanderbilt University, who said TrumpRx was “a really good way to say you’re doing something about drug prices, and not actually do anything to change the underlying profits of the industry.”

Writing in Health Affairs in 2019, Socal and colleagues at the Bloomberg School noted that the effect of using reference pricing could diminish over the years when the U.S.-made drugs are sold on foreign markets for two reasons: 

First, U.S. drug makers often raise prices in the U.S. annually, while the governments in the Health Affairs study (Japan, Ontario, Canada; and the United Kingdom) prohibited price increases after the initial price was set, the researchers noted.

Second, those governments used other methods to lower the prices of established drugs throughout the drugs’ life cycles, they added in this article, “Using External Reference Pricing in Medicare Part D to Reduce Drug Price Differentials with Other Countries.” 

The result was that Canada and large European countries had flat or negative drug price changes between 2008 and 2017, while the U.S. had significant increases, the researchers added.

The consumer-portal model

TrumpRx is likely to operate as a portal, Colborn said in an interview. Consumers could search for the drug they want, see available options, and click a link to the pharmaceutical manufacturer’s site for purchase. 

Cuban’s Cost Plus Drugs will be similar although it is not a true direct-to-consumer model, Colborn explained. “They’re an intermediary that contracts with multiple manufacturers to facilitate a pharmacy-fulfillment service,” he noted. At TrumpRx, multiple manufacturers and other companies such as GoodRx and Cuban’s Cost Plus Drug Company can list medications for sale to consumers, he added. 

Last month, Cuban told the attendees at the HLTH USA conference that his Cost Plus Drugs would participate with TrumpRx, according to reporting from Susanna Vogel for Health Care Dive. Displaying the prices Cost Plus Drugs charges on TrumpRx will increase awareness of Cuban’s company and the prices it charges, Vogel wrote. 

And Cuban said Cost Plus Drugs will allow TrumpRx to view the company’s programming, meaning the staff at TrumpRx will see the data Cuban’s company uses to set prices, Vogel added. 

Disrupting the pharmacy business

When Cuban started Cost Plus Drugs in January 2022, it sold certain generic prescription drugs directly to consumers at cost plus a 15% markup, Joe Hernandez reported for NPR. Since then, the company has added brand-name drugs and still charges 15% above what it pays to buy the drugs, plus $5 for pharmacy labor and $5 for shipping, the site noted. 

Working with TrumpRx, Cuban expects to sell more medications to more Americans, he told the HLTH attendees. “Because as our volumes go up, our costs go down. And when our costs go down, the price for patients goes down,” Cuban said, according to Vogel.

As Socal noted, TrumpRx will bypass PBMs. During his presentation to the HLTH conference, Cuban criticized PBMs for driving up the cost of prescription drugs for U.S. consumers. See this article from STAT News for more of Cuban’s opinions about PBMs and health insurers.

TrumpRx will not sell or distribute drugs directly, Cuban added, according to Vogel’s article. Instead, it will act as a search engine for direct-to-consumer drug websites, the story noted.

Other efforts to lower drug prices

In January, California will start selling low-cost insulin through the CalRx program, an initiative Gov. Gavin Newsom launched in which the state contracts with manufacturers to produce generic pharmaceuticals. Insulin pens will come with a suggested price of no more than $55 for a pack of five, according to Politico. 

The Pharmaceutical Research and Manufacturers of America, a pharmaceutical lobbying group, announced in September that it would launch a website, AmericasMedicines.com, in January to help patients buy prescription drugs directly from manufacturers, Reuters reported. On the site drugmakers can list medicines available for direct purchase and connect patients with programs offering lower prices, Reuters added.

Novartis announced plans in September to launch a direct-to-patient platform starting Nov. 1 to sell its anti-inflammatory drug Cosentyx at a 55% discount off the list price to cash-paying patients. 
Eli Lilly and Walmart announced in October they would offer the weight-loss drug Zepbound in single-dose vials at Walmart pharmacies. Patients can self-pay through Lilly’s direct-to-consumer website at a discount of 50% or more, the companies said.

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