Trump's executive order does nothing to reduce drug prices

At the beginning of this week, President Donald Trump signed an executive regulation, from which he claims that Big Pharma will reduce the prescription medication prices paid by Americans for prices in other countries. It certainly sounds like a good idea. We pay – by far – the highest prices in the world for everything, from the antipsychotic Abilify to the weight loss drug Zepund.

But no longer make your hopes – and not just because, according to many experts, the proposal is the dubious legality. The order is set on the absurd premise that high prices from the US subsidies of a group of “Freeloader” countries around the world are due. In truth, we pay more because we subsidize company monopolies, including Big Pharma and Pharmacy Benefit Manager (PBM), that increase drug prices at home.

Although Trump's command criticizes the drug manufacturers, this would continue to benefit and benefit from Big Pharma in terms of price. It would leave the greatest PBMS – middlemen whose identity claims not to know, even if his administration sued her for demolition of insulin prices. And it would distract the review of the parent companies of the PBMS such as the Unitedhealth Group, whose end results depend on competitive business models.

Trump is right that drug prices are too high. A marginal study in January 2024 showed that we pay almost three times as much for recipes as other countries with high incomes. In 2023, the Middle Annual List Prize for new brand medication rose by 35% to a striking $ 300,000. It is therefore understandable that a KFF survey in July 2023 showed that the majority of Americans are concerned about being able to afford their medication. Too often, patients pay with their lives.

Trump is also right that Big Pharma plays a major role in this crisis. Manufacturers play the patent process for brand medication to keep prices high and to block cheaper generic and biosimilar options when they come onto the market. Although they claim that these high prices research and the development of new medication funds, their own records also show a leading role. In a report by Public Citizen of the Consumer Advocacy Group 2024, the excessive prices for the prescription drug fund “Self -effect activities, including stock buying, dividends for shareholders and compensation for managers who far exceed their innovation investments.”

There is no way to reduce the drug costs for American patients without costs Big Pharma, whose managers at Mar-A-Lago dinner in Mar-A-Lago and high donations to Trump's inauguration fund and the largest PBMS, which is admitted by Trump, “worse than the pharmaceutical companies, not even a product and they make a fortune.”

Trump's command – so vague that it is not clear whether the rules would only apply to federal programs such as Medicare and Medicaid or in a broader sense of commercial plans, ignores the greed that inflate the American pharmaceutical prices. His order, for example, has almost nothing to say about the role of PBMS. These middlemen negotiate on behalf of health plans with pharmaceutical manufacturers and pharmacies in pharmacy. The “Big Three” – CVS Caremark, the Express scripts of the Cigna Group and the Optumrx of the Unitedhealth Group – make up almost 80% of the US prescription drug claims and give you an enormous lever to demand discounts from medicinal products in an exchange for cover.

Since the discounts are based on list prices, PBMS are stimulated that medication with higher list prices is preferred, even if cheaper generics and biosimilars are available. In fact, PBM discounts and fees make up 42% of all dollars issued for branded medication on the commercial market. Other countries with high incomes offer universal health care and negotiate the drug prices directly with the manufacturers, which eliminates the need for PBMS.

Instead of aiming at the patent violations or market power of Big Pharma PBMS, the manufacturers of Trump's executive order must require to sell their medication to American patients at the lowest price abroad. If the manufacturers do not voluntarily adhere to this “most preferred nation” guideline, Trump's command indicates Health Minister Robert F. Kennedy Jr. And yes, these prices are often significantly lower. For example, a one-month range of Ozempic from Novo Nordisk in the USA costs $ 969 compared to $ 59 in Germany.

Sounds great. But Trump's command assumes that Big Pharma will not only decide to increase the prices calculated outside the USA, which corresponds more with the prices we pay. It is also assumed that Trump has the power to do all of this – a very large if. Trump issued a similar executive regulation during his first term, but a federal judge blocked it for procedural reasons. Experts in health policy assume that the order will meet similar legal challenges on Monday, and the markets also seem to think of this, since in some cases after the announcement, the shares of the pharmaceutical manufacturer increase by more than 6% in some cases.

Even if Trump's command became effective, it would not do anything to solve the causes of the problem that should be solved. This would have to prohibit the patent abuse of the pharmaceutical industry and pursue enforcement measures against those who have violated antitrust laws. It would mean that PBM's discounts are accepted. Finally, it would mean taking over the parent companies of the PBMs – that is, giant health insurance congers them, which they break in a similar way to patients and taxpayers for medical services by separating them.

It is unlikely that anything but these structural reforms will bring about significant changes. “Until the political decision -makers take the growing gap between inflated list prices for medicines and the actual costs of these medication, we should expect the same system[ic] Dysfunction that falls and worsens in the future today, ”says Antonio Ciaccia, CEO of the non -profit drug price, 46Brooklyn. In other words, we cannot export our local drug price crisis. We have to fix ourselves.