Lower drug prices offered through direct-to-consumer websites like TrumpRx are failing to reach patients with commercial insurance in part because of a pair of drug discount laws for low-income Americans, drug pricing lawyers and academics say.
Pressure is growing on health insurers to allow TrumpRx purchases to count toward patient deductibles. Insurance company CEOs signaled openness to the idea at a recent hearing before the House Ways and Means Committee, but many TrumpRx coupons explicitly ban patients from attempting to use their insurance.
A recent settlement between pharmacy benefit manager
The limitations undercut the promise of TrumpRx, which President Donald Trump is touting as a solution to the high cost of living ahead of the midterm elections. Critics have already pointed out several problems with the website, including exaggerated savings, the availability of cheaper generics, and the likelihood that most patients’ insurance copays are lower than TrumpRx prices.
The site aggregates cash prices for several dozen drugs, either by offering coupons consumers can take to their local pharmacy or by connecting patients to drugmakers’ websites and the mail-order pharmacies they partner with.
“The intention is very good,” said Dae Y. Lee, a shareholder who represents pharmacies at Buchanan Ingersoll & Rooney PC.
“But unfortunately it’s only a Band-Aid to the current system,” he said.
Best Price Requirements
Medicaid and the 340B program both require drugmakers to offer significant discounts to participating states and medical providers based on the net prices offered to insurers, pharmacy benefit managers, and other purchasers.
The FTC settled an investigation into Express Scripts’ insulin pricing tactics earlier this month, requiring the PBM to count TrumpRx purchases toward patient deductibles as part of its standard offering. But the requirement only kicks in “provided legislative or regulatory changes are made to exempt direct-to-consumer purchases from the calculation of rebates” under Medicaid and 340B.
Incorporating cheaper TrumpRx purchases into a patient’s insurance could increase the discounts drugmakers owe to Medicaid and 340B participants.
Neither Express Scripts nor the FTC responded to a request for comment.
The Pharmaceutical Research and Manufacturers of America didn’t directly respond to a request for comment on how the mandatory discounts factor into concerns around insurance.
“How direct purchase programs interact with commercial insurance will depend on insurance benefit design, government regulations, and individual manufacturer programs,” spokesperson Caroline Dunne said in a statement. “We do believe that the administration should pursue regulatory changes to ensure the money patients spend through DPPs counts toward their cost sharing.”
The administration could carve out an exemption on its own, said Council for Affordable Health Coverage President Joel White, pointing to a similar Biden-era change. But White said interest exists with lawmakers on the committees of jurisdiction and in the GOP Doctors Caucus.
“Obviously it’s more durable if Congress does it,” he said.
But nothing is legally blocking drugmakers from offering lower prices.
“If manufacturers wanted to give these prices to health plans right now, they could,” said Anna Kaltenboeck, president of Verdant Research and a former Senate Finance Committee staffer under Sen. Ron Wyden (D-Ore.). “That’s the punchline. They absolutely could do that. The distinction here is that they don’t want to.”
Pharmacy benefit managers have borne the brunt of backlash over high drug prices in recent years. But Congress recently banned PBMs’ most criticized business tactic—pocketing drugmaker rebates—so lawmakers could turn their attention to the rest of the supply chain going forward.
PBM lobby group Pharmaceutical Care Management Association urged lawmakers to focus on drugmakers, wholesalers, and pharmacy services administrative organizations that help negotiate drug prices for pharmacies.
“Congress must now take a harder look at the real factors driving up drug costs—for example, Big Pharma’s abuse of the patent system and the role of the big drug wholesalers who wield enormous control over the prices of generic drugs and the health of pharmacies,” PCMA said in a statement.
Staying at the Table
Other factors will affect the integration of TrumpRx purchases into insurance as well, notably whether employers agree to let them count toward deductibles. But insurers, PBMs, and drugmakers are likely to remain at the table as the direct-to-consumer channel evolves.
PBMs find tremendous value in the data associated with prescriptions, regardless of where the purchase originated, Lee said.
“They want to see the data because they are very concerned about being displaced,” he said.
Drugmakers are interested in speeding patients past their cost-sharing obligations so they can charge insurers higher prices, Kaltenboeck said.
“It’s really important to recognize that all of this is a play by manufacturers to get people through the deductible,” she said.
Additional Leverage
TrumpRx could still benefit insured patients in other ways.
Employers will have additional leverage to negotiate better prices or give patients health reimbursement accounts geared toward TrumpRx, said Hannah Anderson, a former Health and Human Services official and senior director at the Trump-aligned America First Policy Institute.
The site will accelerate employers’ interest in direct contracting and cutting out the middlemen, she added.
“It’s a way for them to get away from the different service fees and lack of transparency that’s happening in the service provider market,” she said.
Insured patients could also use health savings account dollars to buy drugs from the site, which might become more attractive as deductibles climb further out of patients’ reach, Anderson said. The administration is taking steps to increase access to high-deductible plans on the Affordable Care Act exchanges, arguing they give patients more choices after the expiration of Covid-era tax credits made premiums double.
“People are, in real time, doing the math and saying, ‘Well, I’m never going to hit that deductible anyway, so I might as well save some money on a monthly basis,’” she said.
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