Trump proposes ending the inflation of prescription drug prices

Summary

On February 25, President Trump reaffirmed his pledge to end prescription drug price inflation, stating previous administrations failed where he has succeeded. This follows the February 5 launch of ‘TrumpRx.gov,’ a platform designed to bypass traditional insurance and middlemen to offer medications at 30-80% discounts directly to consumers.Wallstreetcn

Impact Analysis

Don’t write this off as standard populist rhetoric—the mechanism here is the real signal. By pushing ‘TrumpRx’ and explicitly talking about bypassing middlemen to achieve 30-80% price cuts, the administration is declaring war on the Pharmacy Benefit Manager (PBM) model.

The market usually worries about price caps hurting Big Pharma (manufacturers), but this is actually a direct threat to the intermediaries—CVS (Caremark), Cigna (Express Scripts), and UnitedHealth (Optum). If the government-backed cash price becomes cheaper than the insurance co-pay, the entire PBM rebate arbitrage model breaks down.

Bottom line: I’d be fading the healthcare services and PBM stocks here. The narrative is shifting from ‘drug price controls’ to ‘supply chain disintermediation.’ While Pharma might see volume upside from better affordability, the margin compression risk is squarely on the insurers and distributors.