TrumpRx

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He just doesn't want to talk to Democrats about it.

Forget about Obamacare.

The president wants to talk about Trump RX

on Today Explained.

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This is Today Explained.

I am Julie Ravner.

I am Chief Washington correspondent for KFF Health News and I'm host of our weekly health policy podcast, What the Health?

What the Health?

Did you name it?

I did.

All right, great name.

So let's start with the biggest news out of Washington right now and the question on everyone's

pharmaceutical drugs?

Hey, it's an oldie bug goodie.

What's going on?

Well, this is something that President Trump was very insistent on in his first term.

For decades, our citizens have paid the highest prices for drugs, prescription drugs, anywhere in the world,

and it's not even close.

That the U.S.

pays more for prescription drugs than any other country, which is true and which pretty much everybody agrees with.

So in his first term, President Trump tried a whole bunch of what we would call normal activities to try and lower prescription drugs, putting out executive orders.

Today I'm signing four sweeping executive orders that will lead to massive reduction.

in drug costs.

Massive.

And regulations.

And the drug industry, which did not want to lose their ability to charge more in the U.S.

than in other countries with price controls, went to court and they won.

So that didn't work.

So now we are in Trump 2.0 and Trump, as we've seen with a number of different entities, other countries regarding tariffs, universities regarding things that he doesn't like to see, is basically saying, you will make a deal with me or I will do something bad to you.

And that's basically what he's doing with the drug industry now.

He said back earlier this summer that the drug industry must lower its prices in a number of ways.

And if they don't do that, he's going to slap very large tariffs on them.

We're making deals with all of them.

And I said if we don't make a deal, then we're going to tariff them an extra 5%, 6, 7%, 8%, whatever the difference is, we'll take it that way.

So that's how we got to last week.

And we get a big announcement last week, and what exactly is it?

Big announcement in the Oval Office.

I think this is one of the biggest medical announcements that this office has ever made.

President Trump brought in the president of Pfizer, one of the largest U.S.

drug makers, to announce that they had struck a deal to lower drug prices.

Mr.

President,

what an honor to be here today in this office to announce a landmark agreement.

I think it's an historic day.

Is this the coolest office?

He has a beautiful office, but the Oval is the coolest, right?

What do you think?

I think by far.

Although we don't know exactly the details of the deal because that is proprietary.

So we only know what they told us.

It's an historic day because I think today we are turning the tide and we are reversing an unfair situation.

Which was a couple of things, that Pfizer had promised to lower prices for the Medicaid program that

pays for drugs for people with low incomes, and that's jointly financed by the federal government and the states.

Today Pfizer is committing to offer all of their prescription medications to Medicaid and it will be at the most favored nation's prices.

It's going to have a huge impact on bringing Medicaid costs down like nothing else.

I told you that.

Which sounds great except that Medicaid already requires drug makers to offer extremely deep discounts.

It has since the 1990s.

Pfizer also agreed to put up a portal where people could buy drugs directly from them without going through drug middlemen like their insurance company or these pharmaceutical benefit managers, which might or might not actually reduce the eventual cost to

the consumers.

And Pfizer promised to do some more manufacturing here in the U.S., which has been one of Trump's big asks, basically reshoring manufacturing of drugs, which is probably not a bad thing.

During the pandemic, there was a big concern about how much of our, if not just our drugs, but our active ingredients for drugs come from other countries when you know the whole distribution system was messed up Pfizer promised that they would not introduce drugs in the United States at a higher price than they introduce them in other countries except the catch to that is that most U.S.

drug companies introduce their drugs in the United States first so there is no lower drug price in other countries yet

So do we think the company will actually go through with all of the promises they made in the Oval Office?

Or is this kind of just like a, let's go do the song and dance and then see what we actually have to commit to?

Oh, no, we think they'll go through with it because none of the things that they're going to go through with are going to meaningfully lower drug prices.

And how do I know that?

Because their stock actually went up after this announcement.

So

they made promises that conveniently are either things they were like slight add-ons to things they were already doing.

A lot of companies, as I I say, were already bringing back manufacturing to the U.S.

for supply chain reasons as much as anything else and safety reasons and worried about the next pandemic reasons.

And also because of tariffs.

I mean, you know, they were...

That's one of the things that tariffs are supposed to do is force manufacturing back to the United States.

So a lot of drug companies are already doing that.

But this is kind of a delicate dance.

They know that they are in his crosshairs.

As I said, that, you know, Trump has been making noise about high drug prices since his first term.

And he's not alone.

Democrats agree.

Bernie Sanders is just as loud about saying that the United States is basically subsidizing the rest of the world in terms of drug prices.

We in the United States paying by far the highest prices in the world for prescription drugs.

Same exact medicine, same brand names are sold in Canada, the UK, France, Germany at significantly lower prices than what we pay here in America.

That's very much agreed upon.

The question is, you know,

how much can you cut into drug price profits before you actually hurt their ability to continue to make and invent new drugs?

Okay, so the Pfizer thing, it sounds like a bit of a nothing burger, but

there was another announcement made in that Oval Office that day.

It was

Trump RX.

Yeah, I think I would say that the Pfizer thing is not a nothing burger.

It was just like a single burger.

Like you're still hungry after you've eaten.

Yeah, like you're still hungry.

Like what you would get for your five-year-old.

Trump RX

might be described as a nothing burger.

It doesn't exist yet.

I'm sorry.

Trump RX, it's a fine, not harmful idea.

A lot of these drug companies are now selling direct to consumers, as I mentioned earlier.

So you don't go through the drugstore, your pharmacy benefit manager, or your insurance, which I'll get to in a second, but they sell at a discount directly to consumers.

It started, I think it's picked up a lot of steam with a lot of the weight loss drugs, which a lot of insurance doesn't cover.

So you can buy your weight loss drugs directly from the manufacturer.

You'll pay less than you would if you went to the pharmacy without insurance, but if it's if you have insurance that happens to cover it, it's still a lot more expensive.

And I think that's what happens with a lot of these direct to consumer from the manufacturer products.

The idea of Trump RX is that it's going to be a clearinghouse for all of these various platforms.

So there'll be all of the drug companies that have these direct to consumer sales platforms will be available on Trump Rx.

It's just an it's a search engine basically.

It's a prescription drug search engine.

But you say nothing Berger.

How come?

Because it's not going to

It could make it easier for some people, but as I say, if you have insurance and your insurance covers your drug, the chances are you're going to pay less with your insurance than you're going to pay by going directly through the manufacturer.

These direct from manufacturer to consumer products are for people who don't have insurance, don't have insurance for that drug, or are low enough income that they qualify for some of these what are called patient assistance programs where they can get a deep discount.

Huh.

Then why make a big deal out of this?

Because Trump likes to make big deals out of things.

Desperately serious.

It's a website with his name on it,

which is, you know, why does he hate Obamacare?

Because it has Obama's name on it.

He has cared a lot about lowering prescription drug prices, and here will be a website with his name on it that will enable some people, maybe a few people, to get lower-priced prescription drugs.

Are you saying that he did this to put his name on something related to health care?

I'm not saying that directly, but I'm saying that that is probably a beneficial side effect as far as he's concerned.

Well, I mean, we all know why he hates Obamacare.

As you said, it's got Obama right in the name.

But Medicaid costs feels like an easy win for him.

A lot of his voters will be affected by the cuts that the GOP is making to Medicaid.

And that's what the Democrats are so upset about.

Right now, what the Republicans are saying is they would rather shut down the federal government than actually

extend the health care coverage to 15 million Americans who were getting it, but the Republicans are taking it away.

If this is something that Trump has cared about since his first term,

why not just not cut Medicaid in addition maybe to a deal with Pfizer and Trump RX?

Well, that's a good question.

And it's a question for the president and for Republicans about why they are cutting Medicaid.

Should we reach out to him?

Let's reach out to them.

Well, I've reached out to him.

I haven't heard back yet.

First of all,

as I said at the top, Medicaid already is required by law to provide very deep discounts for drugs.

People who are on Medicaid don't generally pay for their drugs because they don't have very much money.

Those drugs are paid for by the state and the federal government.

And yes, lowering even further prices that prescription drug makers charge for Medicaid drugs will save a little bit of money for the federal and state governments.

It's probably not going to show up at the counter for patients.

But obviously, you know, the overarching piece of this is that in the big, beautiful bill that Congress passed back in June, President signed July 4th, there are these enormous trillion-dollar cut to Medicaid over the next few years, and it's going to result in many people losing their Medicaid.

So, you know, on the one hand, they're saving Medicaid with this drug announcement a little bit of money.

On the other hand, they're taking enormous amounts of money out of Medicaid at the same time.

Julie Robner, KFF Health News.

Check out her show, What the Health, if you know what's good for you.

So, a single burger and a nothing burger, but Trump does have a point, at least one point.

Americans pay too much for drugs.

We pay way more per capita than all of our peers.

It's a point Biden made before him.

Americans pay more for prescription drugs than anywhere in the world.

It's wrong, and I'm ending it.

And one that Obama made before Biden.

It's become clear that some of these companies are dramatically overcharging Americans for what they offer.

They sell the exact same drugs here in America for double the price of what they charge in Europe and Canada.

What to do about it when we're back on Today Explained.

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This is Today Explained.

Stacey Dusetsina is a professor of health policy at Vanderbilt University Medical Center in Nashville, Tennessee.

We asked her about one part of the president's big announcement several days ago.

He wants the United States to get something called most favored nation status.

When we've seen this come up in prescription drug policy, usually that means we look at countries with similar economies to ours who have pretty robust access to prescription drugs and we'll say, okay, now we want to understand what did they pay and we want to pay the lowest lowest of those prices.

So despite the efforts politically to move forward with legislation in this space, one key problem that always comes up is we don't know for sure what other countries are paying.

Other countries negotiate prices with drug manufacturers and they get what they call undisclosed discounts.

So we can see maybe a sticker price, but that's not necessarily the price that that country is ultimately paying.

That price that they pay, we would call the net price, net of all rebates and discounts.

This is hidden from us currently.

This is not a small problem.

for the administration or for any policy that tries to use international reference pricing.

This is a huge problem because if all we can see is your sticker price, there's nothing necessarily to say that, you know, companies couldn't push up the sticker price, keep the net price low in other countries, and then be able to say, well, we got the similar deal to those other countries, just might not necessarily be a good deal.

So if I'm picking up what you're putting down, drug companies get to set prices and those prices vary country to country.

And some countries get favorable treatment, but we don't really know which countries and how favorable the treatment.

But Donald Trump would like the United States to get more favorable treatment, and that is called most favored nations status.

Is what it is?

Is that all right?

Yes.

So what we tend to know is that

on average across all of purchasers in the U.S.

versus international prices, we tend to pay quite a bit more than other countries.

And why?

Do we know?

Yeah.

So other countries negotiate much more effectively than we do.

And this is partly because they're negotiating for the whole country at one time.

So most of these countries have some form of like

kind of government coverage or like national health insurance that allows them to say,

for example,

I'm going to negotiate with this drug company.

They do value assessments.

So what that means is that they basically compare the benefit of this new treatment that's coming into their market relative to whatever is the current standard of care.

They decide how much money that's worth from a clinical and economic perspective.

And then they say, okay, based on the clinical benefits of this drug, this is how much money we're going to pay you.

And if companies are not willing to agree to that price, these countries will often say, well, then you're just not going to get to sell your drug to anybody in our country.

We, on the other hand, in the U.S., have a couple of things that limit our negotiation.

One is that we don't have a single payer.

We have Medicare, Medicaid, we have private health insurance plans.

There's a lot of fragmentation, so it's not just one group negotiating.

We also have the desire to have access to everything.

So it's pretty American and I totally get this.

We want to have access to all the drugs.

If our negotiations basically said, well, this drug isn't worth it for us to cover,

some people are not going to be on board with that.

So why can't we figure it out?

I mean, the president wants to do it.

Most favored nation, we are going to pay the lowest price there is in the world.

The last president wanted to do it.

Congress wants to do it.

Why can't we deliver on this issue?

Yeah.

Meaningfully, meaningfully, meaningfully.

I think it's politics and policy aren't necessarily aligning here very well.

So the politics of it,

no matter where you sit, which part of the aisle you're on, or if you're independent, you are likely to want to say that you are going to do something about drug prices because you know how popular that is.

This is really a matter of basic fairness.

The pharmaceutical companies have gotten huge, they've gotten powerful, they've gotten rich, and they are asking American consumers to pay more, hundreds of times more in some cases, than they're asking our European counterparts.

That's just wrong.

I told the pharmaceutical companies when I was in business, you can't charge Americans more than you charge Europeans.

And that's what we did.

It's pretty basic.

I think both Democrats and Republicans agree we've got to reduce drug prices.

You know your constituents are worried about this.

The reality, though, when you start to figure out like what you could do is that there are different views about like who should be in charge of this.

So Republicans have tended to want this to be more

of a, you know, private market manages this.

And then there are legitimate concerns about, you know, if you're very heavy-handed with setting prices, you may harm innovation in drug development, which is really important to Americans and important to all of us and our health.

So there are some legitimate concerns about like, how do you solve this from a policy perspective?

And like, do you let the private market do this?

Do you regulate more?

So that ends up being really challenging as you start to think about how to craft policies to improve the situation.

The other thing is, is that policies are just not as sexy as politics when it comes to,

you can have a big splashy announcement that sounds like you're making a real change to like prices or access to drugs for the population

that doesn't really do much.

These drugs will be available for direct purchase online at a website operated by the federal government.

Or you can have a policy change that is like addressing a lot of complexity in the system that nobody has a media sound bite to talk about.

So I think that's one of the other things is messaging is really hard.

It's a lot easier to say you're doing something splashy, but then, you know,

if I told you about like modifying the inflation penalty for Medicare drugs, you're like, okay,

thanks.

You know, that might help.

I'm going to help.

Right.

It's boring to the average person.

You're like, I have no idea what you're talking about.

Okay.

So, you know, hear you talk about making a big splashy announcement being easier makes me think of where we started with this show, which is that the president several days ago made a big splashy announcement.

And if I'm understanding you, it sounds like that isn't going to equate to meaningful change in how much Americans are paying for their drugs.

Yeah, I think when looking at the details that are available here,

the average American is not going to experience any change from this agreement.

And even people taking Pfizer's drugs, which are the subject of this first agreement, are probably not going to see any differences in what they pay.

And I think the thing that seems attractive about these options is that a lot of people are familiar with buying generic drugs this way and saving a lot of money.

relative to if they use their health insurance benefit.

But branded drugs are just so much more expensive that it often doesn't make sense for people to buy those outside of their health insurance.

You know what?

Sometimes my pharmacists will be like, hey, I got you a deal on this.

And I'll be like, I didn't even ask.

That's so nice.

That's so nice.

Yeah, I think pharmacists are phenomenal people.

You know, like they are right at the front lines.

And like, think about it.

Like, if you could help solve a problem for someone like that, those legitimate problems for them, that's probably the highlight of your day.

This is a nice place to leave it, I think.

You know, shout outs to the pharmacists.

Shout outs to pharmacists.

Also, shout outs to Stacey Dusetsina at Vanderbilt.

Shout outs to Kelly Wessinger for making the show today.

Shout outs to Jolie Myers for editing.

Laura Bullard for fact-checking.

And Adrienne Lilly and Patrick Boyd for mixing this episode of Today Explained.

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