Former President Trump, alongside top health officials, recently announced a new drug pricing agreement with Pfizer, touting it as a significant step to reduce prescription costs for Americans. However, a closer look reveals a more intricate picture.
This agreement stipulates that Pfizer will offer Medicaid prices comparable to those in European nations. The administration also expressed intentions to encourage manufacturers to align pricing for new drugs in the U.S. with other developed countries. A new website, TrumpRx.gov, is reportedly in the works to facilitate direct drug purchases from manufacturers. While many specifics remain unclear, and hints of similar future deals exist, this ‘price equalization’ strategy taps into a pervasive public concern over high U.S. drug costs. Interestingly, the Biden administration also addressed drug affordability but didn’t focus on the U.S.-Europe price disparity as prominently as Trump.
Despite these grand announcements, the practical impact on most Americans, who rely on health insurance for their prescriptions, might be minimal. Health policy expert Stacie Dusetzina from Vanderbilt University noted that such declarations often serve more as a political statement about addressing drug prices rather than enacting substantial changes to industry profits. Let’s explore what these developments truly mean for consumers.
Understanding the Impact: How European Price Alignment Could Influence Your Medication Expenses
Initially, Trump’s agreement with Pfizer covers only a small fraction of medications. However, it could set a powerful precedent for a wider range of drugs and various health insurance plans. Should this initiative expand, substantial savings would primarily benefit American employers, private insurance providers, and government-funded programs like Medicare, which bear the brunt of prescription expenditures. Direct patient savings could also materialize. For instance, patients with co-insurance, who pay a percentage of a drug’s list price, or those with high deductibles, might see reduced out-of-pocket expenses if manufacturers lower their official U.S. prices or slow down price increases to match European levels.
Medicaid Patients: What Changes Can They Expect?
While Pfizer’s agreement to align Medicaid prices with European rates could bring considerable savings to state Medicaid programs, this specific deal won’t directly impact individuals covered by Medicaid. These patients already face minimal, if any, out-of-pocket costs, with federal law limiting prescriptions to an $8 co-pay for the lowest-income recipients, and some states imposing no charges at all.
Introducing TrumpRx.gov: How Will This New Drug-Buying Portal Function?
TrumpRx.gov is designed as a gateway, guiding consumers to pharmaceutical manufacturers’ own websites where they can purchase drugs directly. This platform, currently under development, is slated for launch next year, building on recent trends of direct-to-consumer sales programs from drugmakers.
Direct-to-Consumer Drug Sales: Who Stands to Benefit?
Most Americans acquire their medications through health insurance. However, direct-sales programs could be an alternative in specific scenarios, such as when a doctor prescribes a particular drug not covered by a patient’s insurance, and no viable alternative exists. Some programs, like those from Eli Lilly, even allow patients to use their insurance. Dr. Dusetzina expressed skepticism about the broad impact of these programs, suggesting they would only benefit a very niche consumer: someone with insurance that doesn’t cover a specific, essential branded drug.
What Medications Will Be Available Through TrumpRx.gov?
Initially, direct-to-consumer sales have primarily focused on popular obesity medications from companies like Eli Lilly and Novo Nordisk, which are frequently excluded from insurance coverage. These drugs are often available for around $500 monthly directly from the manufacturers. Eli Lilly reported that in the first quarter of this year, about 25% of new Zepbound prescriptions were filled directly by patients paying out-of-pocket. Other major pharmaceutical companies, including Bristol Myers Squibb, AstraZeneca, Novartis, and Boehringer Ingelheim, have also introduced similar programs for commonly insured drugs like the blood thinner Eliquis and the asthma inhaler Airsupra. Pfizer plans to include medications such as Duavee (for hot flashes), Eucrisa (for skin conditions), and Toviaz (for overactive bladder) in its upcoming direct-sales initiative. It’s important to note that these direct-sales platforms generally exclude high-cost medications for severe conditions like cancer, which can run into hundreds of thousands annually. Purchasing such drugs without insurance would be financially impractical for all but the wealthiest individuals.
Could TrumpRx.gov Actually Save You Money?
Not always. Consider Xeljanz, Pfizer’s popular arthritis medication. Pfizer announced it would offer Xeljanz through its direct-sales program at a 40% discount from its list price. With a sticker price exceeding $6,000 per month, this would still mean an out-of-pocket cost of over $3,600. Such prices are often prohibitive for most Americans. Many insured patients already pay significantly less, sometimes as little as a $25 co-pay, due to existing insurance coverage. Even those with high-deductible plans, who pay full drug costs until reaching an annual limit, might find better deals. For instance, GoodRx recently listed Xeljanz for under $2,900 a month at various New York City pharmacies. Pfizer spokesman Kit Longley stated the company’s commitment to collaborating with the administration to lower drug costs for patients.
What If TrumpRx.gov Offers the Lowest Price?
Even if a direct-sales price appears lower than your insurance co-pay, using your insurance might still be the smarter financial choice. Experts advise individuals with high-deductible plans to factor in all anticipated healthcare expenses for the year. If you foresee reaching your annual out-of-pocket maximum through other medications or services, channeling all drug purchases through your insurance is generally advantageous, as you would eventually meet that limit regardless. In such cases, Dr. Dusetzina warned, opting for direct-sales programs could inadvertently lead to higher overall costs.
TrumpRx.gov vs. Other Direct-Buy Platforms: What’s the Difference?
Several alternatives exist for out-of-pocket medication purchases. Platforms like GoodRx provide local pharmacy price comparisons, while the Mark Cuban Cost Plus Drugs Company operates an online pharmacy offering hundreds of medications. However, these services typically yield the most significant savings for generic drugs, which are considerably more affordable than the brand-name products featured in manufacturer direct-sales programs. Mark Cuban’s pharmacy has particularly excelled with generics, allowing consumers to bypass insurance and avoid inflated prices often caused by pharmacy benefit managers’ behind-the-scenes pricing strategies.
Insurance Issues? Should You Consider TrumpRx.gov as a Solution?
Direct-sales programs could serve as a temporary solution for patients struggling with insurance denials, allowing them to access necessary medications during disputes. However, even in these situations, drug pricing experts suggest that direct-sales might not be the most economical choice. They recommend exploring other low-cost or free options, such as requesting free samples from your doctor, using price comparison tools like GoodRx or the Mark Cuban Cost Plus Drugs Company, or investigating patient assistance programs offered by manufacturers. Your doctor may also be able to suggest an equally effective, insurance-covered alternative.