A real problem, but is there a real solution?

I'm glad that Trump is aggressively calling out the current insane situation regarding global pharmaceutical pricing. Also: health care is NOT a real market.

I'm very glad that Trump is being so public about pharmaceutical pricing issues, PBMs, etc. There's a serious problem of foreign countries capping prices and "big pharma" extracting almost all of its costs and profits from Americans.

BUT, it's not going to be nearly as easy to change as Trump seems to think. And I'm unclear on how any of it happens in a way that doesn't move the US closer to a socialist system or at least one that has even more gov't control over health care (always a bad idea) than it has already.

Also, just as low reimbursement rates for Medicare and Medicaid make hospitals and doctors have to charge more to everyone else, IF Trump can implement lower drug pricing but only for federal programs then will that cause even higher prices for the private market?

You don't have to take my word for Trump having identified a real issue but perhaps not having a real fix for it. The real verdict, at least short-term verdict, came Monday when the biggest pharma ETFs (basically funds that own a bunch of pharma stocks so you can trade much of the sector by buying/selling one product) were up 2% following the announcement of Trump’s “Most Favored Nation Prescription Drug Pricing” executive order. And some of the biggest pharma companies ($MRK, $LLY, $PFE, $BMY) were up quite a bit more than 2%.

Either that means that the market thinks Trump will successfully force other countries to pay more for their pharmaceuticals or the market looked at Trump's proposal and said, "Never gonna happen", and took a big sigh of relief.

I hope it's the former, though only if it means that US pharma prices will drop. But the latter seems more likely.

One thing the US should do is enter a reciprocity agreement with the EU's drug approval agency such that anything approved in Europe is automatically approved here (as long as the manufacturer wants it approved here) and vice-versa.

A big part of the problem of pharma costs is how expensive it is to get approval. A little competition in that process, though obviously not to the extent of having a high likelihood of unsafe drugs getting through, would be great. Furthermore, for a company to only have to go through one process instead of two would somewhat reduce costs. (But not by nearly 50% because the studies that would be used in one process would generally be used in the other, and they're expensive. Still, any savings is welcome.)

President Trump often identifies real problems. He much less often identifies real solutions. Sometimes it’s because he had bad ideas (like tariffs) but other times it’s because in a free market there is little government can (or should) do.

Finally: I want to be careful with the term “free market” regarding health care. Health care is probably the least free-market sector of our economy, even more than banking. Government spends about half of all health care dollars. Insurance companies are the direct payers of most of the rest. In both cases, consumers feel insulated from costs so they overconsume and drive prices higher (while also making it harder to get an appointment.) At the same time, overbearing governmental involvement in the profession of medicine makes a lot of people not want to be doctors. For some, the job seems as much these days about making sure not to use the wrong insurance code as it is about treating patients. So just as government policy drives up demand for healthcare it also drives down supply of doctors.

Of course, in an economic sense, this isn’t special. It’s always and everywhere the outcome of price controls which is what so much of the medical system revolves around these days.

When someone (usually a creature of the left) tells you that the health care system is an example of market failure, the right answer is, “that’s not a real market.” By the way, if you want a sense of what an actual health-care market would look like, look at plastic surgery or Lasik (or similar eye procedures) that are generally not covered by insurance. In those areas of medicine, but pretty much only those areas, real prices have tended to drop over time. And providers compete based on quality and price. And consumers choose carefully. When’s the last time you saw any of that in your normal involvement with the health-care system? And that’s how you know it’s not a real market.