Seemingly, Mr. Josh Boak or the Trump White House believes that pharmaceutical companies are not part of the economy. How else can you explain the following headline?
Trump’s drugmaker deals may save economy $529B over 10 years, White House says
Story by JOSH BOAK
WASHINGTON (AP) — White House economists estimate that President Donald Trump’s deals with pharmaceutical companies to drop some of their U.S. prescription drug prices to what they charge in other countries could save $529 billion over the next 10 years.
If a U.S. pharmaceutical company drops its prices, how does that save “the economy” anything? Less money will come from American buyers and less will go to American businesses. Both are part of the economy.
It’s a net wash for the economy. It’s good news for drug users, but bad news for drug companies, their employees, and their suppliers.
The analysis obtained by The Associated Press includes the first economy-wide projections behind a policy at the core of Trump’s pitch to voters going into November’s midterm elections for control of the House and Senate. Democratic lawmakers have been doubtful about the savings claimed by Trump and these new numbers are likely to trigger additional questions about the data.
Now why would anyone question claims provided by Donald (“The war will end in a week”) (“It actually isn’t a war” “I hardly knew Epstein”) Trump?
Cost-of-living issues are at the forefront of voters’ concerns and higher energy prices tied to the Iran war have deepened the public’s anxiety. Trump has tried in part to address affordability concerns by focusing on his efforts to cut deals with companies so that the cost of prescription drugs in the U.S. would no longer be dramatically higher than in other affluent nations.
That’s good news for some sick people — or it would be good news if the Republicans were not doing everything possible to cut Medicare, Medicaid, Social Security, and almost every other federal benefit for the lower 99% income/wealth/power group.
(You’ll be pleased to know that tax benefits for the ultra-wealthy, like those that allowed billionaire Trump to pay less than $1,000 in taxes in some years, will remain in place.
“Now you have the lowest drug prices anywhere in the world,” Trump said at a Friday rally before a crowd of seniors in Florida. “And that alone should win us the midterms.”
Really? The lowest in the world? Uh, wait . . .
The analysis was done by administration officials for the White House Council of Economic Advisers. They also estimated that federal and state governments could save a combined $64.3 billion on Medicaid during the next decade because of what Trump calls his “most favored nation” policy on drug prices.
The words, “The analysis was done by administration officials,” are enough to make one doubtful. But combine them with the following, and you would have to be a MAGA to believe them.
Few of the details of the deals struck by the Trump administration and 17 leading pharmaceutical companies have been made public, making it hard to independently verify the projected savings.
The White House analysis sought to estimate the prospective savings as more medications come onto the market and fall under Trump’s framework — with one model in the report tallying the possible savings at $733 billion over a decade.
If the details were that impressive, Trump likely would have shared them by now.
Let’s look at what we do know. The phrase “federal and state governments could save” stands out. State savings would just circulate back into the economy, essentially breaking even—money shifting from one pocket to another.
Federal savings, however, could actually harm the economy. That’s money taken from pharmaceutical companies, their workers, suppliers, and shareholders, and handed to the federal government. Federal savings pull from the economy, while federal spending injects money back in.
Essentially, it’s like taxing pharmaceutical companies, and like all federal taxes, it’s regressive. (That’s why tariffs, which consumers pay to the federal government, also are recessive.)
Trump and his Department of Health and Human Services have touted his drug-pricing deals as transformative and urged Congress to codify their principles into law.
Democratic lawmakers have challenged the administration’s claims of savings. Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and 17 Senate Democrats in April proposed a measure requiring the administration to disclose the terms of the agreements signed by pharmaceutical companies.
Wow! We actually need a law requiring Trump to disclose what he is bragging about!?
“If these deals are so great, why is the Trump administration afraid of showing them to the public?” Wyden said when announcing the measure. Health Secretary Robert F. Kennedy Jr. said his team would share details that didn’t include proprietary information or trade secrets.
The White House said it has not shared the text of the agreements because they include highly sensitive data that could move financial markets.
Since when has Trump been afraid to move markets, especially if the information would make markets go up? And Trump spews “sensitive data” like a public fountain.
The potential savings estimated by the Trump administration would be substantial as Americans spent $467 billion on prescription drugs in 2024, according to the most recent government data available. The analysis is premised on the idea that foreign countries would also pay more for their prescription drugs, which would diversify drugmakers’ sources of revenue and preserve their ability to innovate with new treatments.
So, in essence, Trump wants his incompetent appointees to fix overseas prices as well as domestic prices. And of course, the pharmaceutical companies won’t respond by manufacturing overseas, right?
Outside economists have caveated that any savings might not flow directly to patients, many of whom already pay discounted prices for their drugs through their insurance coverage.
Would you really expect the political party that’s attempting to destroy Medicare and Obamacare, to provide savings to consumers? Hmmm . . .
The Congressional Budget Office in October 2024 estimated that a plan similar to what Trump ended up adopting could reduce prescription drug prices by more than 5%, though the decrease “would probably diminish over time as manufacturers adjusted to the new policy by altering prices or distribution of drugs in other countries.”
So, some (not all) prescription drugs that now cost say, $100, temporarily would cost $95, and that is the big news? That is what Trump is crowing about?
The scope of the savings claimed by the Trump administration are likely to intensify the scrutiny by Democrats, who counter that any price reductions would be offset by higher costs for prescription drugs not covered by the “most favored nation” framework.
One of their main critiques is that pharmaceutical companies have increased their profit margins while working with the administration.
In April, staff working for Sen. Bernie Sanders, I-Vt., released an analysis that looked at 15 of the companies that have agreed to this drug-pricing plan and found that their combined profits jumped 66% over the past year to $177 billion. The report noted that the tax cuts Trump signed into law last year “exempted or delayed many of the most expensive drugs” from price negotiations with Medicare.
Because Trump won’t release the details (those “highly sensitive data”) we only can surmise that the bill exempts the most expensive drugs, just like the last one did.
The Trump administration has countered that they consider Sanders’ critique to be flawed, saying that it’s based on the list prices for pharmaceutical drugs instead of the actual price that patients pay.
But that means the so-called “savings” would be less than expected.
And what are the “actual prices patients pay”? It’s a secret. And what are the drugs covered? It’s a secret. And how will that benefit the economy. It’s a secret. And which consumers will benefit? It’s a secret.
And who is trying to make healthcare insurance more expensive for everyone except the very rich, by increasing FICA taxes and decreasing benefits? That is no secret. Trump and his rich buddies.
There is a solution, however — a solution that would add growth dollars to the economy, save consumers billions of dollars, fund research and development of new drugs, and provide more doctors, nurses, hospitals and medical equipment, all while costing taxpayers $0.
That solution is a comprehensive, no deductible Medicare for every man, woman, and child in America regardless of age, combined with tax breaks for medical education, medical R&D, and medical equipment development and sales. Our Monetarily Sovereign federal government has the ability to fund it all without collecting a penny in taxes.
But that would narrow the income/wealth/power Gap between the very rich and the rest of us — and who wants that? Apparently, not the 99% lower income sheep, because you don’t hear them demanding it.
This November’s elections will demonstrate the intelligence (or lack thereof) of the American voter. So far, they’ve demonstrated a greater desire to deport innocent, hard-working, tax-paying immigrants, than assuring themselves and their children of good health care.
What does that tell you?
Rodger Malcolm Mitchell
Twitter: @rodgermitchell
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