President Donald Trump and pharmaceutical manufacturing giant Pfizer announced a deal this week to cut the cost of the company’s prescription drugs covered by Medicaid, the joint federal and state medical program for people with limited income and resources.
Trump also introduced TrumpRX, an online service that will sell drugs directly to consumers at discounted prices, although precise details and when this service will start were not part of the announcement.
The announcement is part of a Trump administration effort to lower the price of prescription drugs for Americans and to get the type of pricing that other countries have been receiving from pharmaceutical companies for years. The administration also says it is trying to unravel the complex nature of how drugs are priced in the US, which they said is unique in that the process involves Pharmacy Benefit Managers (PBMs).
But Doug Hoey, president of the National Community Pharmacists Association (NCPA), says the president needs to go further.
“Bringing down US drug prices is a step in the right direction, but it won’t solve the problem unless he and Congress also get tough on the pharmacy benefit managers and insurance companies that are rigging the system,” he said. “The president is absolutely right that American patients and taxpayers should not be subsidizing lower drug prices around the world. However, we don’t want the president or Congress to lose their focus on reforming the health insurance/PBM conglomerates that have created this crisis in the first place.”
Pharmacist Greg McKenna, owner of the five-store Nutmeg Pharmacy chain in eastern Connecticut, agrees with Hoey.
“This is a step in the right direction, but this is also allowed when the right people aren’t in the room to provide a solution,” McKenna said.
McKenna said the complex system that involves PBMs is at the heart of the nation’s healthcare cost issues.
L to R: Dr. Manisha Juthani, commissioner of the Connecticut Department of Public Health, presents Pharmacist Greg McKenna, chairman of the Nutmeg Pharmacy Group, with the 2022 Connecticut State Immunization Champion Award on Sept. 2, 2022. McKenna was the first recipient of the award, which recognizes individuals working at the local level to promote and foster adult and childhood immunization in their communities. Credit: Brian Scott-Smith / CTNewsJunkie via Connecticut East podcast
PBMs were originally created to keep the cost of drugs down, but over the years and following acquisitions by large healthcare providers and insurers, critics say the focus of PBMs has shifted.
“The insurance companies and their PBMs get paid more when patients and taxpayers pay more. That’s the problem,” Hoey said.
Over the past few years, some large pharmaceutical companies have been selling some of their products directly to consumers through direct-to-patient programs. However, Hoey says, although direct-to-patient discounts may provide some financial relief, it doesn’t help everyone — only those who can afford to pay. More importantly, Hoey says, it can be dangerous.
“A website can’t counsel patients, recognize other potential health risks, or follow up to make sure patients are taking their medicines at the right time and in the right amount. The unreliability, unpredictability, and risks of mail-order drugs is already well documented,” he said.
McKenna adds that it also creates a multi-tier health system for those who can and those who can’t afford to pay.
“We have a cash system for those who can supplement woeful insurance coverage or those who have no coverage. The latter won’t be buying these expensive brands anyway, even at discount,” Hoey says.
McKenna said he doubts prices will match what the people of other nations pay, and if prices are too high, then other countries won’t have the drugs available or they will be very restricted.
The Trump administration lists three drugs for which discounted direct pricing has been negotiated: Eucrisa, Xeljanz IR, and Zavzpret.
Eucrisa is a non-steroidal ointment for people with moderate atopic dermatitis. McKenna said Eucrisa retails at between $780 to $1,100, depending on the size of the tube.
According to the Trump administration, Eucrisa will be available at an 80% discount for patients purchasing directly. Eucrisa, which was marketed as Staquis in Europe, was withdrawn from the market by Pfizer in 2022 for commercial reasons, primarily related to pricing and reimbursement challenges.
Xeljanz IR, a drug for rheumatoid and psoriatic arthritis that retails for about $5,880 for a 60-dose bottle, will see a 40% discount according to the Trump administration.
Zavzpret, a nasal spray designed to alleviate migraines, retails at around $1,115. The Trump administration says it will be discounted at 50% for patients who buy direct.
Other pharmaceutical companies have reportedly announced that if they do supply prescription drugs to Americans at what Trump calls “Most Favored Nation” pricing, they will simply raise the price of prescription drugs in other countries to make up for any drop in profits in the US marketplace.
McKenna also says the deal struck with Pfizer won’t affect people on regular health insurance plans, meaning the PBMs will still be in charge of pricing for that sector of the health market. This, in turn, means pharmacies like his and others will be juggling various prices between the different systems like Medicaid and Medicare and traditional health insurance. In effect, he predicted that pharmacies will be no better off and in some cases could come out worse because of the further fragmentation of the system.
According to a news release from Pfizer about the deal, the company agreed to the plan because it will allow it to avoid having tariffs applied to the drugs it imports from its manufacturing plants outside the US.
“We’ve agreed to a three-year grace period during which time Pfizer products under a Section 232 investigation won’t face tariffs, provided we further invest in manufacturing in the United States,” the release says.
Pfizer has also been on a buying spree, recently acquiring companies to strengthen and consolidate its position in certain health care sectors. In 2023, they bought Seagen, a biotech firm focused on cancer therapies, for about $43 billion.
Over the years, Pfizer has acquired 42 other companies, some of which are outside the US. It’s those companies’ products that would be hit hardest by Trump’s tariffs without this new deal.
Hoey and McKenna agree that the direct-buy deal is a start, but it doesn’t solve the underlying problem of a broken healthcare system in the US and powerful PBMs.
McKenna said that while we all want cheaper medications and better value for money, he doesn’t think it’s smart to bypass pharmacists who review patients’ prescriptions.
“The big problem with people who use mail-order or direct-to-patient services, or even cannabis from different avenues — drug interactions occur and many times that results in people ending up in hospital,” McKenna said.