Consumers will be able to buy discounted brand-name drugs through a government direct sales exchange called Trump Rx, starting in early 2026.
On October 16, the Trump team worked out an agreement with a drug maker to directly sell fertility drugs at a deep discount to lower the cost of in vitro fertilization treatments (see page 9). On October 10, the administration reached a deal with AstraZeneca, and on September 30 the Trump administration announced a deal with drug maker Pfizer to provide most-favored-nation (MFN) pricing for its drugs through Trump RX to sell directly to consumers and state Medicaid programs.
Pfizer and AstraZeneca also pledged to spend at least $50 billion each in the United States for new manufacturing and research and development operations.
The agreements build on a May 12 Executive Order from Trump directing the Secretary of Health and Human Services to propose a rulemaking plan to achieve MFN pricing on drugs sold in the United States.
Pfizer agreed to provide some of its most popular drugs on the platform at discounts ranging from 50 to 100 percent.
Consumer Tradeoffs
Analysts agree that drug makers have been overcharging U.S. consumers to subsidize discounted drugs elsewhere in the world. The drug discount deals exclude Medicare and private health plans.
The discount deals may involve a tradeoff for consumers, says Sally Pipes, president and chief executive officer of the Pacific Research Institute
“MFN pricing sacrifices access to cutting-edge drugs for lower prices,” said Pipes. “That’s not a tradeoff most Americans would accept. MFN imports the same price controls that have failed patients overseas.
“American patients gain access to revolutionary new therapies much sooner than European patients do,” said Pipes. “In some cases, European patients never gain access to those therapies. Fewer than one in four new medicines between 2012 and 2021 debuted in Europe. By contrast, nearly 60 percent of medicines that hit the market during that decade launched in the United States.”
Taxpayer Savings
It’s not clear that massive price reductions from MFN pricing will follow, says Pipes.
“The administration’s deals with Pfizer and AstraZeneca promise MFN pricing for state Medicaid programs,” said Pipes. “By law, Medicaid already pays the lowest price available in the United States. Any savings here will flow to the government, not beneficiaries.
“Further, for many people with insurance, the cash price available through the administration’s planned TrumpRx direct-to-consumer drug sales portal is unlikely to be lower than what they currently pay,” said Pipes.
The deals are a “step in the right direction” but may not have much of an impact on most Americans, says Gregg Girvan, a health care research fellow at The Foundation for Research on Equal Opportunity.
“The two main components of the deals—MFN prices for Medicaid, and MFN prices for drugs purchased directly from the drug companies with TrumpRx as a conduit, without insurance—will change nothing for half the country on private insurance or the more than 69 million on Medicare. It won’t make a difference for those on Medicaid either, since Medicaid recipients receive prescription drugs and pay nothing at the pharmacy counter.”
Political Turnover
The drug discount deals may end up being only temporary, says Devon Herrick, a health care economist who posts on the Goodman Institute Health Blog.
“The problem is the possibility that Trump’s drug deals won’t long survive his presidency,” said Herrick. “Agreements he negotiates through sheer force of personality may disintegrate when he’s no longer around to enforce them.”
Trade Deal Leverage
Although MFN pricing could lower drug prices for some consumers, policymakers can find better solutions that are longer-lasting, says Pipes.
“Instead of importing foreign price controls, the Trump administration should leverage the power of trade policy and market forces to bring about lower drug prices in the United States,” said Pipes. “University of Chicago economist Tomas Philipson has argued that the United States should press other wealthy nations to take on responsibility for a greater share of the global pharmaceutical research, and [Trump] could do something similar in the pharmaceutical market.”
Costly Middlemen
Another solution to high drug prices is to eliminate middlemen along the drug distribution chain, says Pipes.
“Pharmacy benefit managers–who work with insurers to decide which drugs are covered and how much patients pay–take a huge cut of every dollar spent on drugs and distort the market,” said Pipes. “PBMs’ compensation is often calculated based on the ‘discount’ they can secure from a drug’s list price. So, they have an incentive to favor high drug prices.
“Lawmakers should insist that PBMs be transparent about their business practices and pass along any discounts they secure to beneficiaries at the pharmacy counter,” said Pipes.
MAHA Leverage
Focusing on MFN status to address health care costs may be misguided, says Girvan.
“The MAHA movement is squandering an incredible opportunity to make progress on the extremely high chronic disease burden in the United States, the vast majority of which existed before COVID, but instead is focusing on issues that animate the base with little impact,” said Girvan.
Competition Measures
A better way to lower drug prices is to open the door for more competition, says Herrick.
“An important step would be to reform patent law to prevent gaming the system, such as by pharmaceutical companies creating patent thickets that artificially extend exclusivity,” said Herrick. “Trump should also make it a priority to streamline the approval process at the FDA to further boost competition.”
Kevin Stone ([email protected]) writes from Arlington, Texas
