Are you claiming that the new website is offering lower prices than patients are paying after their co-pay? That is not the case outside the example I presented; moreover, the way the website is organized, there will be no pressure for prices to remain competitive after the initial media attention dies away.
I agree that a hypothetical case where we were paying lower prices would be better for us—but this remains an unrealized hypothetical. One way for us to pay lower prices would be to allow our government to negotiate prices for Medicare/Medicaid recipients, and that is exactly the thing that has been hampered.
It’s about external, global pricing dynamics. The site clearly isn’t going to be able to give clean payor/pbm/gov subsidized pricing tables - that is almost an impossible exercise in our system.
What the agreement does accomplish is saying Americans will not pay $1150/mo while EU pays $400/mo while Argentina pays $120/mo.
It guarantees drugs will be greater than or equal to US pricing abroad which effectively forces pharma to find deeper profits outside of the US, or lower prices for all countries to acquire demand.
That is extremely effective. Now it’s up to a really complex group of people to figure out what that means inside our weird system of pharma/pbm/rebates/insurance/medicare.
But that’s not what trumprx is aiming to solve for right?
Pharma is ultra R&D heavy so yes, medications are deeply profitable on a per-pill cost to manufacture basis. However, drug companies by and large are not extremely profitable. This is because to produce a single drug (which is high-margin from point of production), they have to sink billions of dollars into literally thousands of other drug candidates to figure out which ones are viable.
This is all "real, legitimate cost," as is reflected in their rather abysmal overall profitability.
As for the disparity between US and foreign markets, it's a basic tenet of commercialization to sell to every buyer at the highest price they'll accept, so long as that price is above your price to produce. All sorts of companies engage in "price discrimination" to achieve this. For example, cereal manufacturers will sell their own brand at $4/box, and sell the exact same product in a store brand box for $3.25/box. A lot of products in your local retail stores do this.
Overall, no one is really hurt by this per se. Every consumer is making a transaction they're willing to make, and the company is making the most money it can in aggregate, which actually gives it room to push the price at every price point lower than it would be able to if it could only sell to a single segment.
This is actually extremely important in the drug context due to the aforementioned abysmal profitability.
Let's take Trump's attempt to force a Most Favored Nation (MFN) clause onto drug manufacturers which guarantees US consumers pay the same price as the lowest price internationally. The intended effect is for US prices to come down to the level paid elsewhere.
But here's Pfizer CEO: "When [we] do the math, shall we reduce the US price to France’s level or stop supplying France? We [will] stop supplying France. So they will stay without new medicines. The system will force us not to be able to accept the lower prices.”
Not only does this obviously not result in lower US prices, but it very possibly results in higher US prices (since now there is less net revenue from lower priced consumers) and, more troubling in the pharma case, there is now even less net revenue coming in to justify new drug development.
It's hard to overstate how asinine this entire endeavor is. US consumers certainly pay too-high prices for drugs, but this intervention does very little to actually address that problem. The much more proximal issue is the incredible degree of intermediation in the US market between payers, providers, PBMs, GPOs, and more.
Maybe in Pfizer’s portfolio this is true. However, I just watched the Amazon Pharmacy pricing for GLP-1s drop substantially immediately following this. I think you may be being too black and white on claiming this categorically does not work.
Businesses will adapt pricing models, obviously this hurts Pfizer in some way, but Lilly and Novo found the new system was worth negotiating into. Like most things - when people say “always” or “never” - it’s reducing the spectrum of possibilities