Trump’s Healthcare Plan to Lower Costs: 3 Key Points

On January 15, President Donald Trump announced a healthcare policy framework that, while sparse on details, has significant implications for pharmaceutical companies, insurers, and American citizens. The plan advocates for the endorsement of voluntary drug pricing agreements by Congress, an expansion of price transparency, and direct payments to Americans. However, the proposal lacks clear implementation or enforcement strategies.

Details of the Drug Pricing Strategy

The “Great Healthcare Plan” proposes to legalize the administration’s “most-favored-nation” pricing model. This model, which ties U.S. drug prices to the least amounts paid by peer nations, sustains recent agreements with drugmakers by HHS and CMS. Sixteen out of the seventeen top pharmaceutical companies, including Pfizer, Eli Lilly, and Sanofi, have signed agreements to apply this model to parts of their product offerings. However, Regeneron has not yet made any pricing agreement with the federal government.

The plan will make discounted medications, including treatments for diseases like cancer, HIV, hepatitis B and C, and asthma, available at most-favored-nation prices on TrumpRx, a governmental direct-to-consumer platform launching later this month. The agreements include deep discounts on insulin and GLP-1 drugs used for diabetes and obesity treatment.

Effects on Insurance Costs

The proposal aims to transition from direct ACA subsidy payments to insurers to direct payments to eligible Americans that they can use to buy their own coverage. The plan does not detail how these payments would be dispensed or what standards the purchased plans need to meet. Some Republicans have been advocating for health savings accounts as an alternative to extending enhanced ACA subsidies.

Under the proposal, insurers would also be required to publish rate and coverage comparisons, claim denial rates, average wait times for routine care, and the percentage of revenues paid out to claims versus overhead costs and profits. A fourth provision targets PBM kickbacks to brokers.

Price Transparency Requirements

The new plan mandates healthcare providers and insurers that accept Medicare or Medicaid to prominently display their pricing and fees. The policy builds on federal price transparency laws that have been in effect since January 1, 2021, for hospitals and July 1, 2022, for payers.

Despite these existing laws, research suggests major gaps in published data. The proposal includes two price transparency updates that are set to take effect in 2026 to address these issues.