TrumpRx is here and it helps, though a bit less than advertised

TrumpRx, the president’s direct-to-patient (DTP) purchasing platform for pharmaceutical drugs, was launched late last week to a controversial reception. The New Republic called it a “Big Fat Scam,” but it is now up to the public to decide, with it making its first appearance as a supposed market restructurer. 

For decades, the American government has played a powerful but disciplined role in healthcare markets. At first, it was a passive purchaser, then a coverage expander, and only recently has it become a price negotiator, albeit in a limited capacity. However, TrumpRx, which seeks for pharmaceutical companies to grant the U.S. “most favored nation” status, is a departure from these models and signals a continued shift toward government market interventionism.

TrumpRx also emerges in a political environment where government intervention in drug pricing is no longer considered unacceptable. While the passage of the Inflation Reduction Act (IRA) marked a small first step toward addressing a malady, Trump has made government intrusion into market operations a standard tool for his version of the Republican Party to “correct” perceived failures. What was once labeled “price control” is now cannily framed as an affordability reform. Perhaps the practice could be overlooked if material changes followed. And yet, while a small subset of patients will benefit from TrumpRx, most Americans will not see a reduction in their drug prices. 

Our team analyzed how stakeholders are responding to this historical shift and its impact on the market and patient care going forward.

The Slow Creep Toward Government Intervention

During World War II, the U.S. healthcare system transitioned from a cash payment system fully borne by the patient to employer-based coverage because of wage freezes imposed by the Stabilization Act of 1942. To attract workers during labor shortages, companies began offering health benefits, which became tax-free under IRS regulations. This created a unique structure among developed economies in which the U.S. healthcare system permanently established private insurance as a standard employment benefit and, by the 1960s, most working Americans were reliant on their employers for health insurance.

The creation of Medicare and Medicaid in 1965 marked a foundational moment as these two federal programs made the government one of the country’s largest purchasers of medical services. But the federal government still did not directly intervene in pharmaceutical pricing. Market rates operated within private pricing systems.

In fact, when Medicare Part D was passed during the Bush administration in 2003 and expanded outpatient prescription drug coverage to millions of seniors, it explicitly prohibited the federal government from negotiating drug prices directly with manufacturers. Instead, private plans and pharmacy benefit managers (PBMs) were empowered to negotiate rebates and construct formularies. The government became the largest buyer of prescription drugs without being allowed to use monopsony leverage to bargain directly.

The Affordable Care Act (ACA) came into effect under President Obama in 2010 and marked the second phase of federal intervention in healthcare. It expanded health insurance coverage through premium subsidies, Medicaid expansion, and insurance exchanges. As of 2024, more than 45 million people were enrolled in marketplace or Medicaid expansion coverage under the Affordable Care Act.

Even under the ACA, the underlying cost structure of prescription drugs did not change. Many insured Americans still faced high deductibles and significant out-of-pocket drug costs.

Senior government officials took notice and introduced the IRA of 2022, which authorized the government to begin what has been framed as “direct negotiations” with drug companies, introducing inflation penalties to manage price increases and establishing an annual out-of-pocket cap for Medicare beneficiaries. For the first time in modern history, Medicare was authorized to negotiate prices for select high-cost drugs. Senior industry leaders have told us that the term “negotiation” is inaccurate because the government holds all the cards in setting prices, forcing companies to accept them due to punitive penalties for non-compliance.

This hasn’t stopped the Trump administration, which recently announced 15 new medications selected for Medicare drug price negotiations with drug manufacturers, bringing the total number of drugs that will see significantly lower prices for Medicare enrollees to 40. The first round of negotiations was implemented last year, with prices for some of the most in-demand drugs cut by over 50%.

The legislation signaled federal willingness to confront pharmaceutical pricing directly rather than relying solely on market intermediaries. However, the reform was bound within Medicare. The negotiation authority applies only to specific drugs within a specific federal program. Employer-sponsored insurance markets, commercial plans, and cash-pay markets remain structurally separate.

Historically, drug pricing reforms have operated within the silos of Medicare reimbursement, insurance subsidies, and plan-level negotiation. TrumpRx is now challenging this intermediary structure, particularly the roles of PBMs and opaque rebate systems, and engaging more directly with patient-facing pricing models. 

The Trump Drug Pricing Playbook Delivers in Targeted Ways

Building on the pattern of increasing government intervention, the Trump administration has implemented several measures to alter drug pricing, both through the TrumpRx platform and through broader legislative and executive actions.

In July 2025, the administration sent letters to 17 leading pharmaceutical companies urging them to comply with the “most favored nations” pricing policies or face the repercussions.

While foreign governments have used their extensive purchasing power to negotiate directly with pharmaceutical companies, preventing drug prices from exceeding affordable levels, U.S. payers have been left to cover the enormous difference, which averages 2.8x higher and 4.2x higher for brand-name drugs. The approach has been used selectively and only recently by the U.S. government, out of concern that it could damage the country’s heralded biopharmaceutical innovation system.

But with Trump back in the White House, that has changed. Despite the frequently warranted criticism of his leadership style, it can be effective in some cases, just as it was with the brokered agreements between Israel and several Arab nations that established the Abraham Accords in 2020 and with the continued push to have international allies increase defense spending in line with NATO commitments. So too, it has proven useful in persuading the major pharmaceutical companies and foreign partners to finally agree to share the cost of drug development more fairly among developed nations.

The pharmaceutical CEOs partnering with the administration on the pathbreaking initiative, such as Pfizer’s Albert Bourla, Eli Lilly’s Dave Ricks, Merck’s Rob Davis, Johnson & Johnson’s Joaquin Duato, and Amgen’s Bob Bradway, should also be celebrated for pushing this pioneering initiative light-years forward, while others, such as AbbVie, have been astonishingly slow to engage.

The administration has gone even further by creating a DTP purchasing platform to provide an alternative source for popular, higher-priced drugs with large discounts. Somewhat surprisingly, the Trump administration has directed most of the attention to its platform, even though DTP digital programs predate TrumpRx, both as independently owned pharmaceutical platforms and as third-party services such as CostPlusDrugs. Like others, TrumpRx shows the gross-to-net differential and bypasses PBMs and other middlemen, who take 50 cents out of every dollar spent on brand-name medicines. Removing PBMs simplifies the value chain for this subset of drugs, but it fails to address the broader, still-dominant rebate-driven incentives that lead to astronomical prices across the rest of the market. 

Despite this, the administration has once again signaled that reducing PBMs’ influence in the overall market is a priority. Trump attempted to address the issue during his first term, proposing a rebate rule to rework PBM incentives, but the effort ultimately stalled. In his second term, he is making another attempt. Bipartisan PBM reforms embedded in the recently passed government spending package require pharmacy middlemen to pass through 100% of rebates and to transition service fees under Medicare from percentage-based to flat. To make pricing practices more transparent, spreads, fees, and rebate flows must be disclosed in a machine-readable format, and employers and insurers will soon have explicit audit rights.

Although much debate swirls over the potential effects of the PBM reforms, specifically whether they will generate savings for ratepayers or hamper the innovation cycle that leads to breakthrough drugs. Moreover, the PBMs contend that they had already introduced most of the measures required by the law, having shifted from variable, volume-linked revenue to lower-margin, fee-based administration, with profitability more dependent on scale, efficiency, and contract discipline.

The stocks of three major PBM companies—UnitedHealth (OptumRx), CVS (Caremark), and Cigna (Express Scripts)—have been troubled by Trump’s latest intentions to increase transparency around their fees and compensation and to keep Medicare Advantage payments flat for 2027. Both UnitedHealth and CVS stocks fell by more than 20% and 10%, respectively, following the pair of announcements in late January.

The administration secured a recent win through a Federal Trade Commission settlement with Express Scripts, which moves PBMs toward a net price model. The settlement will allow patients to pay coinsurance based on net price rather than list price and require Express Scripts to prefer lower-list-price medicines over the same higher-list-price medicine.

At launch in February, TrumpRx listed 43 discounted brand-name drugs, relying largely on GoodRx pricing rails that are already accepted at more than 70,000 retail and mail-order pharmacies nationwide. That broad technical reach explains why TrumpRx can function immediately without every chain formally “signing on.” Still, participation has been uneven. CVS Health, which operates roughly 9,000 community pharmacies, has publicly confirmed it will accept TrumpRx discount cards, while other chains and independents have been more cautious.

The U.S. continues to have the highest prescription drug prices in the world, paying above 300% of the global average, with over a third of patients reportedly struggling to afford their medications. Despite pressure from the president, a market analysis found that pharmaceutical companies, including the 16 that have dealt with Trump, had increased prices on over 800 brand-name drugs at the beginning of 2026 by a median of 4%. Against this backdrop, TrumpRx offers tangible relief for a subset of patients: those already taking one of the 43 drugs available on the platform, those without insurance to cover these medications, and those who can afford the discounted yet still inflated out-of-pocket price.

In addition, GLP-1 and IVF medications are often excluded by private insurance plans but are among the included drugs on TrumpRx. Including them on the platform could increase access for some patients with a medical need who have been priced out. Ozempic, for example, is available on TrumpRx for an average price of $350, compared to a list price of over $1,000.

Beyond the platform itself, some of the administration’s other policy moves are notable. By promoting publicly visible, manufacturer-backed cash prices, distributors’ traditional price discovery, built around negotiated rebates, chargebacks, and confidential contracts, is further weakened. Pharmacies are being pushed to be more transparent at the risk of another competitive cash-pay channel that diverts prescriptions away from traditional insurance adjudication—in addition to the threat of Trump’s ire.

The U.S. government is also urging international partners to invest more in their own therapeutic research and development, especially those with fixed health budgets that stymie access to the newest treatments. As part of the “US-UK Economic Prosperity Deal,” the U.K. agreed to increase spending on “innovative, safe, and effective treatments” by 25% over the next decade. The changes will translate into a greater ability to approve breakthrough medicines, such as cancer treatments or rare-disease therapies, that may have been rejected due to cost parameters.

But Much of TrumpRx Appears to be Window Dressing

However, a closer examination of TrumpRx reveals that the depiction of the pharmaceutical industry being forced to offer Americans cheaper drug prices does not stand up to detailed scrutiny beyond the headlines.

Currently, TrumpRx lists 43 of the roughly 20,000 prescription drugs approved by the FDA, many of which treat some of the most common chronic diseases, and industry insiders tell us more will be introduced soon. There are some notable absences from the TrumpRx portfolio, though, including some of the most widely prescribed blockbuster drugs in the U.S. market. One example is Eliquis, a blood-thinning medication, which was negotiated to be free for Medicaid patients, but is not available on TrumpRx. For the rest of Americans paying out of pocket, a year’s supply can cost more than $4,100 in the US. Dr. Melissa Barber from Yale University has estimated that the manufacturing cost for a year’s supply is just $18. In France, a country with less buying power than the U.S., Eliquis has been negotiated down to $650 per year.

More than half of the drugs offered on TrumpRx are generic versions previously available on DTP platforms at a fraction of the newly discounted price. For instance, Protonix, one of Pfizer’s proton pump inhibitor medications, is available on TrumpRx at a 54% discount from the list price, costing $200 for a month’s supply. The generic equivalent, at the same dose and quantity, is available on CostPlusDrugs for $6. 

The discounted prices, while lower than the listed, still reflect significant premiums. Ozempic’s price reduction still reflects a significant premium over the estimated manufacturing cost of $5. Industry advocates argue that the pricing model is intended to recoup the more than $6 billion spent on the drug’s research and development, but others argue the markups are exploitative, proven by how quickly the company reduced its prices after meeting with Trump.

For 16 of the 17 pharmaceutical companies with drugs available on the platform, TrumpRx may serve more as a marketing opportunity than a concession. The market share of these brand-name drugs inevitably shrank after the introduction of therapeutically equivalent, but lower-cost, generics. Promoting brand-name drugs, like Protonix, allows for a significantly increased visibility, which may translate to an increased demand in the market. In this sense, TrumpRx acts as a platform to promote certain drugs rather than serve as an industry disruptor. This could lead to market distortions where the drugs on TrumpRx are the chosen “winners” over their lower-cost equivalents, unbeknownst to users of the platform.

Structural limitations further narrow TrumpRx’s reach. Given that DTP pharmaceutical purchases typically do not count towards out-of-pocket maximums or insurance deductibles, the practical value and scalability are structurally limited. The discounted prices will still price out low-income patients, and the digital platform may pose an accessibility barrier to elderly, rural, or offline patients.

Medicare beneficiaries will rarely benefit from TrumpRx. Part D plans offer low copays, and as of 2026, beneficiaries have a fixed annual out-of-pocket cap. Purchases on the platform do not count toward that cap, leaving seniors with little incentive to choose cash-pay options that are often no cheaper and sometimes more expensive than in-plan options.

Medicaid faces a similar dynamic, with low costs secured through rebates and price protections. But another critical coverage tension stems from budgetary pressures at the state level. In January, California ended Medicaid coverage for GLP-1 weight-loss drugs, citing projected annual costs of nearly $800 million, even as TrumpRx announced lower prices. Other states are considering similar cuts.

While the administration has made clear its intent to lower drug prices, TrumpRx was built to operate alongside the existing system and will continue to expose Americans to inefficient pricing and conflicting incentives—except that the government now has an even greater stake in those distortions. The federal government’s deeper intrusion into yet another private industry also presents a new risk of self-enrichment, as alleged by a group of Democratic senators, given the concerning overlap between TrumpRx and BlinkRx, a digital pharmacy company that competes with DTP channels and counts Donald Trump Jr. among its board members. 

As with Trump’s economic policy, TrumpRx marks a genuine evolution in the government’s role in drug pricing, shifting from passive purchaser to active market participant. However, the platform’s narrow scope, reliance on still-inflated prices, and structural disconnect from the insurance system mean that most Americans will see little difference at the pharmacy counter. For now, TrumpRx looks less like the disruptive change it was marketed to be and more like window dressing on a system the administration prefers to operate within rather than overhaul.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

This story was originally featured on Fortune.com

from Fortune | FORTUNE https://ift.tt/pjD7I1c
via Financial Mindset