Even a Broken Clock Can Lower Drug Prices

On May 7, 2025, the editorial board of The Wall Street Journal published a piece titled “Trump’s Worst Idea Since Tariffs,” arguing against a potential move by President Trump to apply "most-favored-nation" drug pricing to Medicaid. The piece is framed as a dire warning: if Republicans go along with this scheme, they will effectively surrender to the price control instincts of the Democratic Party. The argument is familiar territory for WSJ: equating any interference in pricing with socialism, invoking China as a bogeyman, and warning of an innovation apocalypse.

But beneath the ideological bombast lies an incoherent argument riddled with contradictions, flawed assumptions, and deliberate misrepresentation of both policy and precedent. The piece isn’t just flawed—it’s misleading. Worse, its publication reflects a broader trend in opinion journalism: prioritizing partisan signaling over factual clarity.

"Trump officials are pitching Republicans on a ‘most-favored nation’ drug-pricing regime for Medicaid. While the details are hazy, the idea is for Medicaid to pay drug makers the lowest price charged by other developed countries."

This framing sets the tone: acknowledge that the proposal is "hazy," then immediately assume its full scope and implications. The editorial board concedes the plan is not fully fleshed out, but that doesn't stop them from treating it as a known quantity with predetermined consequences. The rhetorical move here is to take a vague proposal and extrapolate its worst possible version—without evidence.

"But savings from Mr. Trump’s drug plan would be negligible, and the scheme would harm innovation and raise prices for Americans with private insurance."

This is a claim repeated throughout the article, yet not substantiated with credible data. The CBO has repeatedly found that negotiated drug pricing—including international benchmarking—can save significant amounts of public money. The idea that it would raise private insurance costs is asserted, not demonstrated. The editorial board treats pharmaceutical pricing as a zero-sum game, assuming any downward pressure on Medicaid reimbursements will be offset by gouging the commercial market. But this ignores the complex and opaque rebate negotiations already occurring across payers.

"Trying to wring more money out of drug makers might cause some companies to stop participating in Medicaid. Patients would then suffer from less access to novel treatments, as they do in countries with socialized health systems that impose price controls."

This passage exemplifies the bait-and-switch logic at work. The idea that pharmaceutical companies would boycott Medicaid is not only speculative but logistically dubious. Medicaid represents a massive portion of drug company revenue. Walking away would amount to commercial suicide. And the comparison to "socialized" systems abroad is intellectually lazy. Countries like Germany, France, and the UK do impose cost ceilings—and yet still offer access to most new medications, often faster than the U.S.

"Eton Pharmaceuticals recently increased prices on a medicine that treats a rare growth disorder in children to $14,705 from $5,882 per vial... Even after raising prices for commercial payers, Eton says the medicine is ‘barely profitable.’"

This anecdote is offered as proof of the damage Medicaid pricing can cause. But it undermines the editorial’s own logic. If companies are already hiking prices on commercial payers to offset public program losses, then the proposed reform doesn’t change the status quo—it makes it more transparent. The real story here is not that Medicaid pricing is excessive, but that companies can arbitrarily triple prices for private insurers with impunity.

"Meanwhile, Chinese companies are announcing biotech breakthroughs almost every day, including in fields that the U.S. pioneered such as CAR-T cell therapies."

And here it is—the pivot to fearmongering. China is brought in not as a comparative policy example, but as a geopolitical specter. The insinuation is that lowering drug costs will somehow hand over biomedical innovation to Beijing. This is both illogical and insulting to American researchers, many of whom work in publicly funded university labs, not just pharmaceutical corporations. The idea that slightly reducing Medicaid payments would gut the nation’s biotech advantage is unsubstantiated.

The editorial also curiously omits any discussion of the massive profits drug companies continue to report, or the billions spent annually on marketing, stock buybacks, and executive compensation. It treats "innovation" as something fragile, held aloft only by the delicate balance of overpayment by government programs. This isn’t economic reasoning—it’s hostage logic.

Let’s not lose sight of something important: if Trump were to succeed in addressing the grotesque injustice of U.S. drug pricing, even in a limited, flawed, politically motivated way—it would still be a good thing. The American pharmaceutical market is a cartel with branding. A single vial of insulin that costs less than $10 to manufacture is routinely priced at over $300. A course of Evrysdi, a drug for spinal muscular atrophy, can cost more than $340,000 a year. Americans routinely travel to Mexico or Canada to purchase medications that are unaffordable at home. Every inch of progress, even from a President whose broader record is laced with cruelty and incompetence, is still progress.

Yes, Trump’s policies have been shockingly inhumane and harmful—to immigrants, to climate stability, to democratic norms, to global alliances. His tariff regime disrupted supply chains while achieving none of its nationalistic goals. His rhetoric has inflamed division. His management of the pandemic cost lives. But those failures don’t make this particular idea—benchmarking U.S. drug prices against other developed countries—automatically invalid. A broken clock isn’t always useless. And even a small step toward fixing one of the most exploitative systems in American life deserves consideration.

To be clear, there are reasonable concerns about how price benchmarking might impact R&D or patient access. But those concerns demand rigorous debate, not ideological recitations. This piece delivers the latter. It leans on slippery slopes, cherry-picked data, and bad-faith comparisons to paint a false picture of a policy that has not even been finalized.

The editorial reflects a larger failure of the media to separate economic myth from policy reality. The real danger isn’t Trump proposing "a dumb idea." It’s an influential outlet pretending that every attempt to rein in corporate excess is a path to authoritarianism. If we can't distinguish between measured price reform and Venezuela-style collapse, we've already lost the plot.