Photograph Source: The White House – Public Domain
On April 23, President Trump unveiled a drug pricing deal with Regeneron, which became the 17th company to strike a deal as part of what is known as the White House’s “Most Favored Nation” program. While these deals are billed as an attempt to bring the US prescription drug prices closer to what they cost in other countries, there are major questions about what they will actually mean in reality.
At the event announcing the new deal, Trump said the MFN program was “the biggest price reduction in drugs in history… By itself, we should win the midterms.” But these deals – voluntary agreements negotiated by the White House and the companies – are unlikely to win elections anytime soon.
The Regeneron discounts, similar to those with other pharmaceutical companies, apply to the TrumpRx website, as well as the Medicaid program. The latter could amount to some savings, though the details are unclear (as they are with all of the Trump deals thus far.) Creating a discount for the TrumpRx website means the benefits are very limited – as Brandon Novick pointed out about the earlier MFN deals, most Americans use insurance of some sort to buy prescription drugs. The TrumpRx platform is used by those who either do not have insurance or are making purchases outside their insurance company. There are likely some cases where this kind of purchase might be beneficial to a given patient, but it remains a small slice of the overall prescription drug market.
Given the limited benefits of any single drug pricing deal, it is worth looking at the overall effects of the MFN program. Reports from Democratic leaders in Congress have raised the concern that consumers who are steered towards TrumpRx may end up paying more than they would otherwise if they had purchased generic versions of the same drugs (which are not sold on the Trump-branded site).
In addition to those concerns, a report that Senator Bernie Sanders released this month notes that the Trump administration has taken other positions that explicitly benefit Big Pharma – most notably, policies to weaken or delay Medicare drug pricing negotiations with the very same companies making MFN “deals.” The administration has also created a program through the Food and Drug Administration (FDA) to speed drug approvals by weakening standards to ensure they are safe and effective, a policy shift that surely interests major pharmaceutical companies.
All in all, it would appear that the White House pronouncements of massive (and sometimes mathematically impossible) reductions in drug prices are intended as distractions. As Vanderbilt University health policy professor Stacie Dusetzina told NBC News, “One of the more frustrating aspects of recent drug pricing announcements has been the lack of transparency into the so-called deals that are being made by the administration…. In fact, once you dig into the details, it appears that the administration’s efforts to date have mostly served to help drug companies.”
On a purely rhetorical level, the Trump White House has been correct that people in the United States pay far more for drugs than anywhere else in the world. But lawmakers have consistently failed to support efforts to do something about it. As Novick pointed out last year, a legislative effort to codify Trump’s executive order on pricing was not included in the One Big Beautiful Bill. Senators Josh Hawley (R-MO) and Peter Welch (D-VT) introduced a bill that would penalize companies that did not meet MFN pricing targets. Meanwhile, a program to reduce costs through a Medicare drug negotiation program has been undermined. There is still legislation pending that would codify the Trump administration’s approach to drug pricing, but Republican lawmakers do not appear to be interested. That leaves us with individual deals that are crafted by the White House and pharmaceutical companies, the details of which remain mostly unknown.
This first appeared on CEPR.
