“Why should America foot the bill for other countries that have working economies?” JD Hayworth, a former US Congressman who now advocates for drug pricing reform, told Deep Dive. “Charity's one thing, but for Americans to have to foot the bill and bear the brunt, it's just not right. So this President really wants to put America and Americans first, and sadly, Big Pharma has been putting Americans last, asking us to pay more and more.” 

But is that approach really working? 

“Even on the Hill, people are starting to ask, okay, we have all of these one-off deals with manufacturers. We have all these drugs on TrumpRx. Cool, this is probably a step in the right direction,” said Robert Albarano, a partner at the consulting firm Arthur B Little. “Is there any material savings? And I don't think that anyone outside of the White House can actually put their finger on that one just yet.”

In his many public events announcing these MFN deals and in his State of the Union, President Trump has repeated the same refrains: that he’s the first President to deliver on drug pricing in a significant way, that Americans will pay the lowest prices anywhere in the world, and that his administration has delivered “discounts way over 100%”.

Some of these claims can only be chalked up to Trump’s penchant for hyperbole: as Politico points out, a 100% discount would make a medicine free. A discount larger than 100% would require pharma companies to pay consumers to take medicines off their hands.

Some are aspirational, but certainly not true yet: as the New York Times discovered, Americans still pay more than those in comparable countries, even when the analysis is limited to drugs on TrumpRx. 

But for all the rocky rhetoric, Trump is right about one thing: he’s taking bigger swings than previous administrations, and placing drug pricing front and centre as a campaign issue. And the combined effect of all these efforts could still lead to real positive change for patients – even if it’s not at the level of Trump’s promises.

(The White House did not respond to specific questions, but provided this statement from White House Spokesman Kush Desai:

“President Trump is right: for decades Americans were forced to pay anywhere from 100 to 1,000% more for the same exact prescription drugs as our peers do in other wealthy nations. President Trump pledged to put an end to hardworking Americans singlehandedly having to shoulder the costs of global pharmaceutical innovation with high drug prices, and the administration securing 17 Most-Favoured-Nations drug pricing deals with the largest pharmaceutical companies in the world speaks to how the President is delivering for American patients.”)

They also have a net price, or rather a number of net prices, which are the negotiated prices paid by insurers and self-insured employers to manufacturers, after rebates. This price is a more useful number, but also a more secretive one – the net price is different depending on which pharmacy benefit manager negotiates it, and those prices are not publicly available. 

As pharma companies are fond of pointing out, PBMs introduce a lot of waste into the system. 

Renzo Luzzatti is the president of US Rx Care, a pharmacy benefit manager, but one with a key difference to the big three PBMs (ExpressScripts, CVS Caremark, and OptumRx): US Rx Care operates with a fiduciary duty to its employer customers. It’s the lack of this ethical guideline, he says, that has led most PBMs to the current reality of misaligned incentives.

“The formulary is for sale, and a lot of folks don't really understand that the formulary is for sale and has been for decades,” said Luzzati. “If I'm a drug manufacturer and I want to sell more of my drug through a PBM, how do I do that? I buy positioning on the formulary. If I pay enough, I'll be in Tier 2 instead of Tier 3, so lower co-pay to the member. If I pay enough, I might get my competitor kicked off the formula […] or I might get my brand preferred over the generics.”

That’s just one example. PBMs also own other parts of the value chain, such as the specialty pharmacies they require employers to use, setting up additional conflicts of interest.

“Look at the economics,” Luzzatti said. “If you, as a plan sponsor, spend more on your plan, does your PBM make more money? The answer is yes. There's a direct conflict of interest, right? You don't have to be a rocket scientist.”

So, when the Trump Administration says that Americans will pay a lower price than anyone else in the world, which price are they talking about? Well, CMS Deputy Administrator Chris Klomp was pretty clear on that point during the first MFN deal announcement in September.

“This is not made-up list prices that have often been quoted in prior administrations stuffed with fees and rebates,” he said. “We're talking about net prices after fees, after rebates, the prices people actually pay here, the prices people actually pay in other wealthy countries. We then index to a basket of countries, wealthy countries across the world, and we go drug by drug and we look for the lowest price, and that becomes the starting point for what an MFN price is in the United States.”

If that’s the definition the administration is going with, they’ve still got a long way to go.

What we do know is what’s on TrumpRx, the government’s much-ballyhooed direct-to-patient cash pay platform. TrumpRx offers discounts on (at press time) 87 drugs, either through coupons or by directing users to existing cash-pay programmes. 

Scrolling through TrumpRx, one sees many great deals, with one price slashed out and another written in, and percent discounts in the 80s and 90s (though not, it’s worth noting, at or over 100%). And those prices are real.

The devil lies, as it always does, in the details. First of all, TrumpRx is a cash pay platform. And since the passage of the Affordable Care Act under President Barack Obama, every American is required to have health insurance. And while these prices often represent huge discounts over existing cash prices, most people wouldn’t have paid those prices anyway – they’d have just paid their co-pay.

“No one's really paying out of pocket for drugs,” Albarano said. “At the margins, it's probably a net positive if you don't have insurance or your plan design provisions are such that it's more effective for you to go there. I think it's probably one of those things where it's worth a look to see if you could do a little bit better going through TrumpRx. But I have to imagine that if you have insurance, you're probably going to be better off just getting your script filled through insurance.”

Many Americans are on high-deductible health plans, and some of those plans make users pay full price for medication until their deductible is met. Unfortunately for them, if they choose to use the TrumpRx discounts, they won’t be able to count those purchases toward their deductible.

“If you go to TrumpRx and you go to order, it comes up with this disclaimer that says that this is cash only and that by ordering through this site, you as the individual are attesting that you're not using this in combination with insurance at all,” said Luzzati. “That you're not going to submit this for accumulation toward deductible and out-of-pocket costs under your health plan, right? This is strictly you, the individual, paying cash to get this medication. You cannot use it with insurance. That's what it says.”

Secondly, there is another existing way that Americans save money on many prescription drugs: they use the generic, rather than the brand name for drugs that are no longer under patent. And many of the drugs on TrumpRx with the biggest discounts are brand name drugs, for which the existing generics constitute a better deal. A STAT analysis conducted in February found that of the 43 drugs on TrumpRx at that time, 18 had cheaper generics available.

“If you look at the drugs on the Trump Rx list, there's a lot of drugs on there that are brand names that have had generic equivalents for decades,” Luzzatti said. “So I guess if someone wants to get a discount on a brand drug and they don't want the generic, they can go there, but that's not really going to have a positive impact on the marketplace because they could just use the generic. It's just interesting that those drugs are on the list at all. I don't know who's going to be buying them.”

There are a handful of drugs that experts agree really do cost less on TrumpRx. Chief among these are GLP-1s, which is a huge market where cash pay is unusually common. Additionally, the negotiated prices for fertility drugs are even cheaper than generics in some cases. 

Albarano believes that, while the MFN deals haven’t been totally painless for pharma, they’re also not sweating them too much.

“My sense is that, you know, from reading what was available in the press, that they probably only gave up a couple extra points on top of the rebates that they're already giving to PBMs. So net-net, that's not the worst thing in the world.”

One is the Biden-era Inflation Reduction Act, which the Trump Administration has continued to administer even as they’ve shifted their PR focus to the programme with Donald Trump’s name on it.

The IRA stipulated that additional drugs would be added to the list each year. While the drugs on TrumpRx and in the MFN agreements are chosen in negotiation with the pharma companies, IRA drugs are chosen based on the most-prescribed drugs under Medicare, so there’s a mechanism to make sure the drugs targeted are the ones people actually need. And the latest round of negotiations could be the most impactful yet.

“So the IRA initially was on Part D or self-administered drugs that we would get in the retail setting. Now we're starting to get around to Part B drugs, which don't have any rebates attached to them,” Albarano said.

In other words, discounts on Part B drugs could be much more meaningful because these drugs weren’t already discounted.

“The IRA will come in and, just by law, we add 10 or 15 drugs every year,” he said. “After a couple of years, all of a sudden we have 40 or 50 drugs, some of which have never had any rebates or discounts attached to them. This can become pretty material.”

“It's very easy to point to the savings that are coming out of IRA,” Albarano added. “I think MFN is working-ish, but […] it's like the PBM rebates. You can't see it. No one can see it right now.”

“Number one, they can't prefer inflated drug price products any longer. They have to end their rebate-driven incentives,” Luzzatti said. “They have to end spread pricing, which is that concept where the PBM is paying the pharmacy one price and charging the client a higher price for that same drug. That difference is pure margin call spread. So they’ve got to eliminate that. And they have to have transparency in reporting.”

The settlement also requires ExpressScripts to work with TrumpRx. But this creates an interesting problem, since currently, TrumpRx can’t be used with insurance in any way.

“Express Scripts is required to tap into those prices, and the only way really to do that logically would be to actually adjudicate a claim,” he said. “But, within the realm of TrumpRx right now, there's no way to adjudicate a claim because it's supposed to be all just cash pay.”

The existence of that provision suggests that at some point in the future TrumpRx might be made to work with insurance and not just with cash pay – and at that point the platform could start to have a real impact.

“The bottom line is there's a movement afoot, and manufacturers are stepping up to the plate,” Luzzatti said. “The question is, how does it get integrated into the funded space? And there are a lot of companies that have come into the marketplace to provide various vehicles for that to happen. There are companies putting prepaid Visa cards in the hands of members so they can use it at LillyRx or NovoRx, right? [There’s] GoodRx, potentially mail-order pharmacies, like Mark Cuban. And so there's a lot of smart people out there trying to figure out a way how to get these prices under a funded arrangement.”

Hayworth, the former Congressman, says the current executive focus on drug pricing is a win in and of itself, because placing drug pricing front and centre in the executive arena makes it harder for legislators to ignore, as well – and that could lead to even bigger changes.

“It's like Reagan said about Capitol Hill: when they feel the heat, they see the light,” he said. “And I think the heat is just going to continue to build to the point where I don't think I can put a clock on it. But I feel very strongly that both parties ignore this at their own electoral peril.”