Today the White House announced TrumpRx, a drug-buying website. Earlier in the summer Trump called on drug companies to participate in a direct-to-consumer drug platform. The following was reported by the Wall Street Journal:
TrumpRx would allow people to pay cash for certain drugs directly from a government website, at a discounted price negotiated by the government. Trump said the site would be operated by the government. Pfizer, in a statement, referred to the website as TrumpRx.gov.
Dallas billionaire, Mark Cuban already operates Cost Plus Drugs and the discount drug card website, GoodRx, allows consumers to obtain steep discounts at most of the local pharmacies where they already shop. I recently filled my dog’s prescription at a local CVS pharmacy. A 135-pill prescription order was $37, about half the $79 list price. Due to some anomaly on the GoodRx website, a 130-pill order would have been $27 at CVS and around $22 at HEB using my GoodRx discount. A couple other drug discount card programs are ScriptSave WellRx and SingleCare. The aforementioned TrumpRx.gov is not yet active. According to WSJ:
It’s unclear how many drugs would be offered, or whether the website would be useful for the majority of Americans who are already covered by private insurance, Medicare or Medicaid. Trump said Pfizer had agreed to offer some of its most popular drugs on the platform at steep discounts, between 50% and 100% off. Pfizer said the majority of its “primary care treatments and some select specialty brands will be offered at savings that will range as high as 85% and on average 50%.”
More companies are expected to follow Pfizer’s lead on drug pricing. Trump said his administration is working with other companies to soon secure “similar agreements.” He mentioned Eli Lilly as one of the companies currently negotiating with the administration.
The Trump Administration is doing everything it can to leverage the power of the presidency to force drugmakers to lower prices. One problem with that is generic drugs are mostly already cheap. Educating Americans to ask about the GoodRx price when filling prescription could in many cases save money compared to using the drug benefits in their health plans. In recent years pharmacy benefit managers (PBMs) have been allowed to consolidate to the point that the three biggest PBMs now control nearly 80% of the drug market. Two of these are owned by insurance companies, who can literally profit every time an enrollee fills a generic prescription because the co-pay is often higher than the drug’s cost. For that matter, the drug copay is sometimes higher than paying cash using a drug discount card.
The bulk of drug costs are not generic drugs, which account for 90% of prescriptions filled. Generic drugs account for only about 11% of drug expenditures. The majority of drug costs are the 9% of drugs filled as name brand (39% of drug costs) and the 1% that are specialty drugs. Specialty drugs accounted for half (50%) of drug expenditures in 2024.
If the Trump Administration really wants to lower drug costs, it should focus more attention on closing patent thickets. The Administration should rein-in excessive and bogus patents on drugs with existing patents, a defensive move to artificially extend patents on drugs. It is not uncommon for drugs to have one hundred patents, most of which are defensive in nature.
Drugmakers use numerous strategies to game the patent system in ways that are not necessarily good for consumers. One drugmaker argued with the FDA to reclassify their drug as a biologic drug because biologics enjoy more patent protection than small molecule drugs. Another concern is anticompetitive behavior. For instance, AbbVie makes Humera, an extraordinarily successful biological drug used for autoimmune disorders. When Humera’s patent expired a few years ago experts expected the name brand drug to lose market share. Despite nine (9) different biosimilar versions available at lower prices Humera did not lose market share. The reason was because its manufacturer threatened to withhold rebates from the big PBMs if they allowed their clients to place a generic version (biosimilar) on a cheaper formulary tier. This was yet another example of the perverse incentive rebates create in health care where buying a more expensive product makes more money for middlemen than a cheaper ones that are good for consumers. The threat of tariffs on drugs will also jack up the price Americans pay for drugs.
Read more at WSJ: White House Announces ‘TrumpRx’ Drug-Buying Site, and Pricing Deal With Pfizer