No. 1 Thing Mark Cuban Thinks Trump Could Do To Lower Drug Prices — Is He Right?
Written by
Vance Cariaga
Edited by
Rebekah Evans
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President Donald Trump’s new executive order demanding that drugmakers lower prices on prescription drugs will likely run into resistance from both industry leaders and certain lawmakers. But there’s one thing the president can do that might accomplish the same thing, according to billionaire entrepreneur Mark Cuban — demand more transparency over prices.
In an X post, Cuban expressed doubt that the president could “force” lower drug prices.
“But he can force transparency and that will help,” Cuban wrote. “He did it w/hospitals. Force transparency of contracts, pricing, rebates, claims and a lot could change. Biggest thing he could do is encourage brand pharma to sell to cost plus drugs at competitive pricing. We would do to brand pricing the same thing we did to specialty generic pricing.” Find out more about Cuban’s proposal versus Trump’s current order.
Also, here are other possible changes coming to prescription costs.
Is Drug Transparency the Answer?
Government-mandated drug pricing transparency is already happening at the state level. A growing number of states have either passed or initiated new regulations centered around having more transparency in the pharmaceutical industry, according to a report from Deloitte.
The idea is to curb drug price hikes and help consumers save money on increasingly expensive medicines.
But such regulations have not been enacted at the federal level yet, leaving some parts of the country in the dark about why certain drugs cost so much. Because of this lack of transparency, prices can become uncertain and erratic, according to PharmaVoice.
A coordinated effort of full transparency from drugmakers, insurers, pharmacy benefit managers and hospitals could ease costs, PharmaVoice explained. But getting there won’t be easy, according to Wayne Winegarden, director of the Pacific Research Institute’s Center for Medical Economics and Innovation.
“The problem is that there are so many different prices and everyone’s negotiating different prices and it undermines the whole purpose of pricing, which is to convey information about scarcity and value,” Winegarden said. “When you don’t have a mechanism to accurately incorporate that information in a price, your market is going to malfunction — and that’s what’s going on in healthcare.”
Trump’s Executive Order
Trump has been a vocal critic of the way pharmaceutical companies price their drugs and how it may hurt the average consumers’ budget — he aims to address the problem by forcing their hand on prices. The executive order he issued on May 12, set a 30-day deadline for drugmakers to “electively lower” the cost of prescription drugs in the U.S. or eventually face new limits over what the government will pay, The Associated Press reported.
If the government can’t reach new deals on drug prices, the administration will establish a rule tying U.S. drug prices to prices in other nations. That might now be so easy, though. As The New York Times reported, Trump’s executive order didn’t prove any legal authority to be able to order lower prices.
Trump can also expect pushback from drugmakers and lawmakers — especially since his executive order immediate followed a U.S. House Republican healthcare proposal that would cut about $700 billion from Medicaid and Obamacare marketplaces over the course of a decade.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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Sources
- The Associated Press, “Trump signs executive order setting 30-day deadline for drugmakers to lower prescription drug costs.”
- Mark Cuban, X
- Deloitte, “State drug price transparency.”
- PharmaVoice,”Pricing transparency is in the spotlight — and that could be good news for drugmakers.”
