Q&A: How Direct-to-Consumer Pharmacies Could Affect the Pharmacy Landscape

John C. Goodman, senior fellow at the Independent Institute and president and founder of the Goodman Institute for Public Policy Research in Dallas, Texas, discusses TrumpRx, a broad set of initiatives aimed at reshaping how Americans pay for prescription drugs. Goodman explains how the program seeks to expand direct-to-consumer (DTC) purchasing and secure lower prices for both individuals and employers, using high-profile weight loss drugs such as semaglutide (Ozempic, Wegovy) as case studies for how list prices differ dramatically from cash prices.

Throughout the interview, Goodman unpacks how TrumpRx interacts with the broader drug supply chain—including pharmacy benefit managers (PBMs), insurers, pharmacies, employers, and government programs such as Medicare and Medicaid. He contrasts Donald Trump’s and Joe Biden’s approaches to drug price negotiation, arguing that Trump’s model encourages more genuine market negotiation and empowers patients to access lower prices through mechanisms such as health savings accounts, flexible spending accounts, and innovative employer arrangements. He also highlights both the potential savings for patients and the disruptive impact these changes could have on traditional pharmacy operations and PBM business models.

Total Pharmacy: Today, we're going to be discussing the current developments regarding TrumpRx and the progress that this presidential administration is attempting to make surrounding US prescription drug prices. To start, can you just explain, to the best of your knowledge, what TrumpRx is and what this new platform is really trying to achieve for patients?

John C. Goodman: TrumpRx is not just one thing; it's many things, and you've probably heard Trump on TV talking about how unfair it is we pay higher prices for drugs than other countries pay, but not that much has happened in the international field. Some rather dramatic things have happened domestically, however. TrumpRx is designed to promote direct-to-consumer sales, where the individuals go directly to the pharmaceutical company, and it is also going to be involved in helping employers get lower prices for drugs in the private sector.

If you want to just take an example: the weight loss drugs, because they've got a lot of attention. They've gotten attention because they're expensive, and most people can't afford them. Medicare can't afford them. [For] Medicaid, most employer plans don't cover them for most people who could benefit from them, but at the same time, we're discovering that these drugs do more than just [help] you lose weight. They may be important in combating cancer and other problems. Let's talk [about] Wegovy and Ozempic. These are 2 weight loss drugs that most people [have] probably heard about, and they're produced by a Denmark pharmaceutical company called Novo Nordisk. The Wegovy list price is $1350 a month, and the Ozempic list price is $1000 a month.

If you just pay what they're asking, that's really expensive over a year's time. These are drugs [where] once you get on them, you can expect to stay on them for the rest of your life. We’re talking about a lot of money over time. So interestingly enough, if you, as an individual, went to the drug pharmaceutical companies and said, “What if I buy this as an individual? What is the cash price?”, most of the time, it's less than half of what their list price is. This company, Novo, for example, will sell you these 2 drugs for $500 a month. It's less than half of their list price. Individuals can get a better deal than pharmacy benefit managers, which are supposed to be in the business of negotiating discounts. They can do better than employers, better than health plans, and that's one of the reasons why Trump is interested in promoting the direct-to-consumer sales.

Total Pharmacy: Being in the pharmacy space, you definitely understand the reimbursement challenges and all those complexities, and it definitely seems like TrumpRx is really trying to wedge itself right in there and try to find these discounts somewhere. I wanted to focus on that DTC model really quick. What are your thoughts on the DTC prescription drug model in general, and how do you think that will impact patients’ medication costs?

Goodman: When a health plan, or when your employer, or when a pharmacy benefit manager negotiates price with a drug company, we have a rule that says that Medicaid has to get the lowest price you offer to anyone. If an insurer [or] pharmacy benefit manager really tried to push down the price, the problem is not only does that low price affect the members of that health plan; it affects revenues that the drug company gets from 50 Medicaid plans. There's a limit on how low they're going to go. This rule does not apply to individuals. They can charge an individual any price they want to, and it does not affect their Medicaid revenues. There's the opportunity.

Now what is the problem with negotiating through an employer or through an insurance company? The problem is just that you can probably get a lower price as an individual than they can get, but it has to be your money, and so that is a problem because most people who have private insurance get it through an employer and it's the employer's money, and as long as it's the employer's money, they cannot give you the discount. These 2 drugs, again, sell for a cash price of $500 each, and that's their cash price. Here's what Trump has done. TrumpRx sounds like he's going to set up a pharmacy in the White House. That's not the way it's going to work. What TrumpRx is going to do is link to Mark Cuban and other entities like that. Mark Cuban's company is called [Mark Cuban] Cost Plus Drug [Company], and he will get the individual the cash price so long as it's not an employer paying and it's not a health insurance company paying.

What has happened is that Trump has gone to Novo and Eli Lilly and negotiated a rate for Medicare, which is about one-fourth of what their list price is, but he's also negotiated a price for ordinary individuals who are not on Medicare, and that's about $250, by the way, plus a $50 co-payment from the individual. This is [a] huge discount, again, so long as the individual is paying with his own money.

So how would you pay with your own money? Whether it's a health savings account, there's a flexible spending account, and those belong to the employee, and so those accounts can be used to buy directly from Pfizer, Eli Lilly, and other companies. They're there, but there's a limit [to] how much money can go in those accounts. It doesn't work very well for really expensive drugs. There's a company here in Dallas that's figured out a way to get around the problem, and what they do is they use an account called the health reimbursement arrangement, and the employer, through that arrangement, pays health care costs for the employee. What the Dallas company does is called paid health. They figure out a way to put money into a special trust, and the employee gets a credit card, and [the] employee can draw on that trust to buy drugs with that credit card, and that seems to count as [an] individual purchase, even though the money all came from the employer. Just a huge innovation that's going to save people a lot of money.

Ready to impress your pharmacy colleagues with the latest drug information, industry trends, and patient care tips? Sign up today for our free Drug Topics newsletter.