President Donald Trump’s deals with pharmaceutical companies are likely to have only a limited impact on Americans’ drug spending, experts say.
Since Sept. 30, the Trump administration has struck deals with 14 drugmakers in exchange for tariff relief, according to the White House.
The agreements — which haven’t gone into effect yet — adopt a “most favored nation” pricing model. They tie U.S. prices to those paid in other wealthy countries, lowering what Medicaid pays for the drugs, as well as offer discounts for people paying in cash through TrumpRx, a new self-pay platform.
Most of the deals, however, don’t affect what people with private insurance or Medicare pay for the drugs. People with Medicaid — who typically have minimal or no copays for prescriptions — already pay very little.
“Generally speaking, most people with insurance coverage will continue to be better off using their insurance to obtain medications rather than purchasing through the TrumpRx direct-to-consumer portal,” said Juliette Cubanski, deputy director of the program on Medicare Policy at KFF, a nonpartisan health policy research group.
Many aspects of the deals remain unknown.
“There’s virtually nothing on paper about them except for press releases,” said Richard Frank, director of the center on health policy at the Brookings Institution, a nonpartisan think tank. “It’s not clear.”
A full list of drugs covered under the deals isn’t available. However, the White House has announced several of them, including Merck’s diabetes drug Januvia, Sanofi’s blood thinner Plavix, Amgen’s cholesterol-lowering drug Repatha, Genentech’s flu medication Xofluza, Gilead Sciences’ hepatitis C medication Epclusa, Novartis’ multiple sclerosis drug Mayzent and Novo Nordisk’s and Eli Lilly’s blockbuster weight loss drugs Wegovy and Zepbound.
Two of those drugs are already subject to Medicare price negotiations under President Joe Biden’s Inflation Reduction Act: Januvia was included in the first round, while Wegovy is part of the second.
Some of the discounts made public are steep reductions off the list prices. Epclusa, for example, will cost $2,425 for people paying in cash through TrumpRx, down from $24,920. And the average monthly cost for Wegovy and Zepbound — which are currently available for $500 out of pocket — will start at $350 and drop to $250 within the next two years.
Art Caplan, the head of the medical ethics division at NYU Grossman School of Medicine in New York City, said that without a full list of drugs covered by the deals, it’s difficult to assess their overall impact.
Some of the drugs that have been named, Caplan said, aren’t among the costliest in the U.S., or they already have generic versions that are typically cheaper for patients.
Several generics are available for Plavix, including one sold by the drugmaker itself, for example. The hepatitis C drug Epclusa is also available as a generic. Some of the drugs that got price cuts but don’t have generic equivalents are used by relatively few patients, Caplan said, and have a “tiny” impact on overall drug spending.
Another drug, Xofluza, must be taken within 48 hours of the onset of flu symptoms, which could make it a poor fit for an online platform like TrumpRx, he said.
In an email, a White House spokesperson said some of the lower prices will be available on TrumpRx “early this year” and for Medicaid “in the coming months.” The administration hasn’t yet released “a comprehensive figure” on expected out-of-pocket savings, the spokesperson added.
Stacie Dusetzina, a health policy professor at Vanderbilt University in Nashville, Tennessee, said that for people without insurance or those with high-deductible plans, TrumpRx could offer meaningful savings compared with list prices.
An estimated 26 million people in the U.S., or 8%, didn’t have insurance in 2023, according to the U.S. Census Bureau.
But for most people with insurance, she said, buying drugs through the platform is unlikely to be the better option — particularly for brand-name medications.
Even with lower prices, “we’re usually talking about hundreds of dollars per fill, and that ends up being a real problem for most people,” Dusetzina said.
Cubanski said that even large discounts may not make the drugs affordable for many patients paying out of pocket.
“A 50% discount on a $500 drug is nothing to sneeze at,” she said, “but a lot of people will still struggle to pay $250 out of pocket on a monthly basis.”
The potential savings from extending the most favored nation pricing to state Medicaid programs are even harder to gauge, Cubanski said, because the details of the agreements haven’t been made public. And even if states pay less, Medicaid enrollees themselves wouldn’t see savings at the pharmacy counter.
“These deals won’t produce savings for Medicaid enrollees, since they already pay little to no cost sharing for drugs,” she said.
Caplan said Medicaid already pays the lowest prices for drugs in the U.S. “It’s not clear where the money would be saved,” he said.
Drugmakers raise prices
Trump’s push is also unfolding alongside a wave of price increases by drugmakers.
This year, drug companies have raised the prices of more than 350 brand name drugs, Reuters reported, citing research from 3 Axis Advisors, a health care consulting and research firm. The average price hikes were around 4%, the report said, in line with price increases last year.
Frank, of the Brookings Institution, was skeptical of the agreements, saying it’s possible the price cuts could be repackaged discounts that drugmakers were planning or already offering.
“If companies choose what drugs are included in the deal, it’s fair to assume they’re not going to pick the ones that have the largest impact on revenue,” Frank said.
“Until we see that there’s actually a real contract in place that is actually committing folks to a change in prices, it’s hard to say that anything is going to happen,” he added. “It’s not necessarily that the deals are trivial, but rather they’re not solid enough. In some cases, they may not be significant at all.”
At the same time, people’s health insurance premiums have surged this year as enhanced Affordable Care Act subsidies expired and health insurers raised rates. It remains unclear whether Congress will be able to work together to pass legislation to extend the tax credits.
Dusetzina said that if people can’t pay for health insurance, it’s unlikely they would find prescription drugs — even at discounts — affordable.
“A lot of people would not find the prices available to be affordable,” she said.
