Will Trump Rx have an impact of the cost of drugs for patients?

I keep getting calls about what I think about President Trump’s announcement of his Direct to Consumer (DTC) plan for pharmaceutical drugs, called TrumpRx. The plan is to sell medicines directly to consumers on a government website that will direct patients how to buy medications directly from manufacturers at sharp discounts. Details are still coming in, but one of the goals is supposedly to bypass insurance “middlemen.” HOORAY!!!

This order has great potential, but without putting other guardrails in place it will be another windfall for middlemen in the drug supply chain. Other initiatives being put in place by the administration such as directly negotiating with drug manufacturers and getting manufacturers to bring their facilities back to the states have promise. The US health system is complex and it is great to see Washington waking up to the needs of Americans.

Back to TrumpRx. While I applaud the administration’s efforts to address the high cost of US healthcare, much like Biden’s drug price negotiations under the IRA, the net impact of this program on patients is likely to be minimal.

To understand why I believe it will not have a big impact, you need to understand how drug pricing in the US works. 90% of Americans (300 million) have health insurance, so the visuals below are for insured patients in the US.

This graphic shows how a drug gets from the manufacturer to an insured patient in the US healthcare system. The drug manufacturer sells a drug to a wholesaler at a discount who then provides it to the PBM/carriers pharmacy, who sells it to the patient with a doctors’ order. The drug manufacturer may also provide additional discounts and rebates to the PBM/carrier to ensure their drug is made available to patients on the carriers’ plan.

The next graphic shows that insured patients do not buy medications directly from drug manufacturers. So, while a manufacturer decreasing the list price of a drug results in lower costs for the wholesaler and PBM/carrier, whether or not the PBM or carrier pass these savings on to the patient, via lower premiums or cost share is not guaranteed.

It should be noted that since patients’ out-of-pocket costs are often based on the list price (especially for coinsurance or high-deductible plans), a lower list price should be beneficial for the patient, but the impact is only a percentage of the overall discount.

So, who would benefit from this program?

·      The 27 million people in the U.S. (approximately 9% of the population) who are uninsured could benefit, however they have to be well off enough to purchase the drugs with their own money. 

·      As mentioned above, if you are among the 90% of Americans (300 million) who have health insurance, Trump Rx, is unlikely to save you much money. Even if you have high copays or deductibles, your out-of-pocket costs with insurance is still likely to be cheaper than paying the entire cost yourself, even at a substantial discount.

·      If you do have insurance but get your drugs through TrumpRx or a program like GoodRx, the money spent on the drug likely won’t count toward meeting your deductible. When you purchase drugs through your carrier that cost goes against your deductible. If you pay outside your insurance plan, it does not. 

Is this a new approach to the marketplace? NO

• This model already exists in the private marketplace with Mark Cuban’s Cost Plus Drug Co., which markets itself as selling “safe medicines at the lowest possible price.”  Their prices are (cost + 15% markup + a dispensing/shipping fee) with full transparency. One other advantage to Cost Plus over a DTC platform is that some insurance carriers accept them, so your drug purchases may go against your deductible.

Will the cost of drugs be cheaper on TrumpRx?

·      TrumpRx drug prices will be discounted sharply to reflect “most favored nation”, prices, which refers to the lowest price paid by other developed countries for prescription drugs. The MFN prices are based on a market basket of prices paid by the so-called Group of Seven: Canada, France, Germany, Italy, Japan, the United Kingdom, Switzerland and Denmark.

·      It is unclear whether the “most favored nation” pricing will actually be lower than what Medicaid programs currently pay. By law, Medicaid already gets the lowest price of any commercial payer. Across all brand-name drugs purchased by Medicaid nationally, rebates reduced Medicaid spending by more than 60% in 2020, according to federal data.

·      The program is also focused on helping the “most vulnerable” patients in Medicaid, but many of these patients already pay nothing out-of-pocket in many states, and in other cases a nominal co-pay of $3 to $5. 

BOTTOM LINE:

Drug Pricing is incredibly complex and it cannot be fixed by simply telling manufacturers to lower their prices. In today’s system manufacturers rarely sell directly to patients, so drug discounts do not transfer to patients, and if they did sell directly to patients, the money patients use to purchase the meds does not go against their insurance deductible. This type of mandate can only work with other guardrails in place forcing others to have skin in the game.

https://www.wsj.com/health/pharma/trumprx-prescription-drug-website-99fee2f9Oct. 1, 2025 5:30 am ET