President Trump announced Friday that his administration has reached an agreement with nine additional pharmaceutical companies to offer some of their drugs at discounted prices. The move is part of Trump’s “most-favored-nation” pricing initiative for prescription drugs, aimed at cajoling developers to charge comparable prices in America as they do in other developed countries.

The White House initially sent letters to 17 major drug companies demanding that they lower prices, threatening them with government action if they did not comply. Five companies reached agreements to do so in the past several months. The nine developers newly on board bring the total to 14. Three remaining firms — AbbVie, Johnson & Johnson, and Regeneron — have yet to join.

These agreements will undoubtedly be advertised as a policy to reduce health care costs as Democrats pummel Republicans on the issue in Congress. It should also assist Trump’s grudging new message of “affordability,” which his advisers are forcing him to talk about despite his insistence that it’s a left-wing hoax. But, looking at the details, most Americans shouldn’t expect to see much actual savings on their pharmaceutical bills — and, therefore, drug companies shouldn’t expect to lose much revenue.

The New York Times reports:

Under the arrangements, the manufacturers will offer some of their drugs through websites where Americans can bypass insurance and use their own money to buy the products.

To help patients navigate that process, the Trump administration plans to create a site called TrumpRx.gov, which will direct patients to the manufacturers’ direct-buy websites. Officials put up a promotional version of the TrumpRx website this fall and said they plan for it to be operational in January.

You can check out TrumpRx here. It’s a bit light on drug offerings right now, but heavy on cinematic portraits of the president. Come January, however, it will supposedly be full of brand-name blockbusters to help Americans with their many ailments.

Here’s the problem: Almost no one purchases brand-name prescription drugs directly. Less than 15 percent of U.S. drug spending is out-of-pocket; the rest is through government programs like Medicaid and Medicare (thanks, George W. Bush) and private health insurance. A small percentage of the drug’s cost is usually passed on to enrollees in the form of a co-pay or premium. If you have regular health coverage, your insurance will probably continue to offer brand-name drugs at far lower out-of-pocket costs than the prices available on TrumpRx — which won’t accept insurance at all.

As a result, I expect very few purchases to be made through Trump’s website. The 92 percent of Americans with health insurance have no financial reason to use it, and most of the 8 percent who are uninsured either don’t take brand-name drugs or take advantage of companies’ patient assistance programs and other discounts. On rare occasions when one’s insurance doesn’t cover a particular medication, such as popular weight-loss drugs, TrumpRx may indeed come in handy. But drugs on the platform will still cost patients much more out-of-pocket than if they were covered.

There is one more aspect of the deal, though:

The drugmakers also agreed to sell most of their products to state Medicaid programs, which provide health insurance for low-income Americans, at the prices they offer to other wealthy countries.

Sounds great, but that won’t save everyday Americans much money, either. Medicaid enrollees pay tiny co-pays (typically less than $10) per prescription, if anything, for brand-name drugs. Thus, the savings from this agreement will mostly accrue to the federal government and states that fund Medicaid. But the money saved may not be too great, as Medicaid already pays less for drugs than Medicare and private insurers:

Medicaid is already legally required to get the lowest drug prices in the United States, which are often comparable to those in European countries. But administration officials said the deals would bring significant savings for some drugs.

We’ll have to see how that turns out.

Unfortunately, the president secured this deal by threatening pharmaceutical companies with a coercive policy that would surely increase drug prices if enacted:

In exchange, the companies secured three-year exemptions from any tariffs that Mr. Trump might impose on imported pharmaceuticals, administration officials said. Mr. Trump has repeatedly threatened to impose punishing tariffs on imported medicines but has not followed through.

As Trump has learned, one of the neat things about unilateral tariffs is that you can make companies do what you want by dangling exemptions — all without any congressional involvement.

The administration has also attracted drug companies to the table by offering their medicines expedited review at the FDA. If this is something it can do, it should extend this expedited pathway to all developers, including all the firms that are too small to receive personal letters from the president. That could be a way to actually lower drug prices across the board through greater competition, rather than enshrine the market share of the biggest existing players.

Altogether, the president’s agreement with drugmakers won’t change their business model much at all. They will still sell the vast majority of their drugs through Medicare and private insurance at the same prices they charged previously. They might take a slight haircut on Medicaid sales, but they will avoid punishing tariffs that would cost them billions of dollars more and might save some money on regulatory approval. Meanwhile, TrumpRx looks more like a political gimmick than a genuine marketplace that patients will use.

The biggest problem with pharmaceutical spending, as I have written on health care broadly, is that virtually nobody pays for it directly, so developers have little incentive to keep prices in check. If millions of Americans purchased more drugs with cash instead of insurance, as Trump envisions and as used to be the case, the pharmaceutical market would function much better. But the president’s deals do nothing to make that a reality. They merely nibble around the edges.