President Donald Trump has spent months promising a straightforward solution for one of America’s biggest frustrations: prescription drug prices. Last week, he finally unveiled his plan, called TrumpRX, featuring large figures, bold language, and an eye-catching promise.
A group of economists, some of whom usually support Trump, began warning that the plan could backfire and that patients might end up facing hidden costs.
According to a recent Fox News report, TrumpRX is based on a government price cap for medications, along with a new direct-to-consumer initiative that would encourage patients to buy lower-priced drugs directly from manufacturers. Trump also highlighted $150 billion in new investments from nine drug companies as part of the announcement.
On the surface, this sounds like a win, however, the economists Fox consulted argued that the math isn’t so simple from a broader perspective. They explained that price caps do not eliminate the underlying cost of drugs; instead, they just change who pays and how much. This could lead to higher costs elsewhere in the supply chain, reduced coverage, fewer choices, or decreased motivation to develop new treatments.
Michael Baker, director of healthcare policy at the American Action Forum, said the following: “At the most basic level, government price setting only limits what patients pay for a drug, which usually shows up in out-of-pocket or co-insurance payments,” Baker told Fox News, continuing: “This doesn’t address the overall cost of the drug, which someone still has to pay, nor does it reduce development costs.”
He then added that it will be less effective than the current healthcare system: “Patients will experience far less of the crown jewel of the U.S. healthcare system that they are currently used to receiving,” Baker said.
The economists fear that government-set pricing could slowly restrict that stream. If the rewards diminish enough, companies will adjust by developing fewer new drugs, taking fewer risks, and investing less in research that may not succeed.
What made the Fox News report particularly noteworthy is that skepticism was not limited to economists from think tanks critical of Trump. Even experts at the Heritage Foundation, a conservative organization often aligned with Republican views, expressed caution.
Ed Haislmaier, a Heritage expert in healthcare policy and markets, told the outlet that the most harmful type of price control is the one that caps what a company can charge at launch, when a new product hits the market and the incentive to innovate is at its highest.
“The kind of government price controls that are most damaging to innovation limit the initial price a company can charge for a new product. Some countries face this issue, but fortunately, it hasn’t happened yet in the United States,” Haislmaier said.
Trump wants a populist win with lower drug prices, but economists warn that it will cause ripple effects, and voters may not notice the downsides until later, when fewer new treatments become available or when coverage tightens.
Trump has portrayed TrumpRX as a common-sense move that makes the market work. But some detractors feel the government is meddling, disguised as consumer empowerment. If the policy faces issues or if costs shift unexpectedly for patients, the same promise that made it popular could turn into a liability.
