Prescription Drug Prices See Biggest Drop in 63 Years
Good evening! The Trump administration said today that exporters in China and other high-tariff countries are routing their goods through other countries to avoid U.S. levies. A report released by the White House and trade adviser Peter Navarro estimates that such "illegal transshipment" costs the U.S. government $19 billion to $26 billion in lost annual tariff revenue.
Here's what else is happening.
Prescription Drug Prices See Sharpest Drop in More Than 60 Years
Over the 12 months ending in July, prescription drug prices saw their biggest annual drop in more than 60 years, according to inflation data released by the Bureau of Labor Statistics Wednesday.
While consumer prices overall rose 3.4% year over year, the price of medicinal drugs - a category that includes all prescription and over-the-counter medications - fell by 2.7%, reportedly the largest such drop on record. Prescription drug prices fell by even more, down 3.1% compared with July 2025. That's the largest annual decline since March 1963, The Washington Post reports.
The White House sought to take credit for the news, arguing that President Trump's push to lower drug prices was working.
"From his Most-Favored-Nations deals to launching TrumpRx, President Trump is delivering real results," White House spokesman Kush Desai posted on X. "American patients are winning."
That's a potentially potent message with the November midterms looming and affordability concerns at the top of voters' minds. Yet experts reportedly point to a range of factors, including lower prices for popular GLP-1 weight-loss drugs, more generics and a policy enacted under the Biden administration enabling Medicare to negotiate some prices with drugmakers.
"While the results are stark, teasing out the cause is complicated, independent experts said," The Post's Steve Thompson, Federica Cocco and Christopher Rowland noted.
Richard Frank, a senior fellow at the Brookings Institution and a professor emeritus of health economics at Harvard University, told The Post that the Biden-era introduction of Medicare price negotiations, enacted as part of the 2022 Inflation Reduction Act, is more likely behind the drop in drug prices.
Negotiated Medicare prices for the first set of 10 popular prescription drugs went into effect on January 1, 2026, and negotiated prices for another group of 15 drugs, including the popular diabetes and weight-loss drugs Ozempic and Wegovy, are set to take effect in 2027.
"If I was a betting guy on what mattered most, it would be probably stuff around the Inflation Reduction Act," Frank told The Post.
Read more at The Washington Post.
DHS Paid $464 Million for Jets That Are Sitting Idle: Report
As the Department of Homeland Security rushed to purchase a small fleet of jets last fall to use in deportation flights, government officials dispensed with the usual bidding process and instead used a no-bid contract to pay $464 million to a company in Virginia for 10 aircraft. According to a report in The New York Times Thursday, those jets have gone largely unused, sitting on the ground at airports for months at a time.
Seven of the planes are Boeing 737s, passenger jets that can seat about 200 people and are suitable for mass deportation flights. But the planes have spent most of their time parked at a small airport in Lake Charles, Louisiana. DHS reportedly does not have enough staff to operate them.
The other three planes are luxury business jets: two Gulfstream G650s and a Boeing 737-8 MAX; the latter is equipped with flat-screen televisions, a bar, a kitchen, showers and a queen-sized bed. Soon after acquiring the jets, DHS sought to loan or lease them to other government agencies for use by senior officials, including FBI Director Kash Patel, White House Border Czar Tom Homan, and possibly members of President Trump's family.
Urgent business: Federal acquisitions generally require the use of competitive contracts, but that requirement can be waived when delaying the purchasing process would result in "serious injury, financial or other," to the government. DHS would not reveal the injury it was seeking to avoid when it purchased the jets with a no-bid contract, citing national security concerns.
The Times notes that while waivers have typically been granted in times of war or natural disaster, under the Trump administration, the use of no-bid contracts for urgent business has become far more common. DHS has entered into roughly 500 no-bid contracts, covering more than $29 billion in spending, during President Trump's second term. According to a Times analysis, nearly two-thirds of the contracts signed by DHS have been "urgent" since Trump reentered the White House. In 2024, urgent contracts made up less than 1% of DHS contracts.
The plane contract is typical of the second Trump administration in another way, too, the Times says: It involves people connected to Trump or his Cabinet secretaries. The chairman of the company that sold the planes to DHS, Daedalus Aviation Corporation, once made political donations to Kristi Noem, the former governor of South Dakota who served as DHS secretary until March of this year.
Lawmakers want answers: Democratic Sens. Patty Murray and Christopher Murphy sent a letter this week to the DHS inspector general, inquiring about the purchase of the jets, as well as plans to use some of the aircraft "to ferry Trump administration officials around."
The lawmakers said the plan to use the jets to fly Trump administration officials around the globe "demonstrates a remarkable disregard for American taxpayers who work hard and expect government officials to responsibly manage their tax dollars, not burn them on extravagant luxury jets." The senators added that the acquisition of the jets raises "serious legal concerns, as Congress has not provided the necessary legal authorization for DHS to purchase these planes, much less run a private jet service for government executives."
Murray and Murphy noted that Republicans provided DHS with "a remarkable windfall totaling over a quarter of a trillion dollars" through the One Big Beautiful Bill Act last summer and another more recent funding bill. "But instead of using the staggering amount of funding provided to DHS to actually improve the lives of Americans by requiring basic compliance with the Fourth Amendment, acquiring and deploying body-worn cameras to every law enforcement officer in the field, mandating minimum officer identification, or properly training new hires, this administration has lit taxpayer dollars on fire by acquiring new and unnecessary planes to jet Trump officials around in extreme luxury that the vast majority of Americans will never experience," the senators said.
The senators requested detailed information about the purchase of the jets, including contract specs, flight logs, lease details and plans for use, with a deadline of August 26, 2026.
Quote of the Day: Fitch Holds US Rating Steady
"The United States' 'AA+' rating is supported by its large economy, high per-capita income, dynamic business environment and exceptional financing flexibility due to the U.S. dollar's role as the preeminent global reserve currency. However, high fiscal deficits, a substantial interest burden, and high and rising government debt levels constrain the rating. Debt is more than double the 'AA' rating median. The government has not taken meaningful actions to address the large general government fiscal deficits (averaging 7% of GDP since 2022), and spending pressures will mount over the next decade due to an aging population."
- Fitch Ratings, affirming its existing AA+ sovereign rating for the United States.
Fitch said its outlook for the U.S. economy is "stable," despite higher tariffs, the trump administration's immigration crackdown and elevated policy uncertainty. Economic growth is projected to be 1.9% in 2026-2027.
The U.S. federal government sustains "strong financing flexibility" thanks to the dollar's dominant share in global reserves. "The dollar remains the most important currency for global trade, payments and financial markets with 89% of all over-the-counter operations denominated in U.S. dollars, multiple times higher than any other currency," Fitch said. "The share of foreign ownership in U.S. Treasuries has held steady at close to 30% for the last five years."
Fitch expects large fiscal deficits to persist, with growing fiscal pressure driven by rising expenditures for Medicare and Social Security. The debt-to-GDP ratio will continue to rise, climbing to 123% by the end of 2028. In the meantime, Congress will have to address the debt ceiling again, likely by mid-2027 if not sooner.
Fiscal News Roundup
- Senate-Passed Government Funding Bill Gets Warm House Reception – Politico
- Boats, Picket Lines, 'Jersey Pride': Trump Tax Breaks Inspire Wave of Copycats – Politico
- Homeland Security Paid $464 Million for Airplanes. Then It Parked Them – New York Times
- Trump Orders Navy to Restore Older Tech on Aircraft Carriers, Costing Billions – Wall Street Journal
- U.S. Military Has Lost Roughly 25% of Its Reaper Drones as Iran War Depletes Arsenal – Washington Post
- Prescription Drug Prices Record Sharpest Drop in More Than 60 Years – Washington Post
- Trade Court Upholds Trump's Closure of 'De Minimis' Loophole – CNBC
- Trump White House Says It's Losing $19B-$26B a Year in Revenue as Countries Dodge Tariffs – Associated Press
- A Surprise Credit After an Overseas Purchase: The Tariff Refunds Now Flowing Through Shippers – Associated Press
- Trump Cancels Biden-Era Bid to Speed Power Line Construction – The Hill
- Trump's 401(k) Proposal Shows Evidence of Phony Public Support – Bloomberg
- Concerned About Trump's Ballroom Project, Senate Democrats Seek Audit – Washington Post
- Kennedy Center Board Decides to Inscribe Trump's Name on Building – New York Times
- Bulldozers Rip Into Big Bend National Park, Driving Anger and Heartbreak – CNN
Views and Analysis
- Stagflation, the Scourge of the 1970s, Is Back – Phillip Braun, New York Times
- It Was a Great Scam While It Lasted – Peter Navarro, New York Times
- Why House GOP Hopes of Cracking Down on Fraud Could Flame Out – Mia McCarthy and Robert King, Politico
- The $20 Burrito Debate Is a Sign of Inflation Fatigue – Jonathan Levin, Bloomberg
- Why the Right Is Fighting About $20 Burritos – James Hohmann and Scott Lincicome, Washington Post (podcast)
- Bulldozing in Big Bend National Park Is Brazen, Even for Trump – Erika D. Smith, Bloomberg
- After Supreme Court Losses, Trump Keeps Pushing – Adam Liptak, New York Times
- Trump's Vaccine Plan Would Require Millions of Individual Shots Last Used Decades Ago – Matthew Perrone, Associated Press
- Why It's So Hard to Measure the Economy's Real Potential – Joe Weisenthal and Tracy Alloway, Bloomberg
- This Federal Program Is So Effective, the White House Can't Stand It – Mary Ellen Klas, Bloomberg
- A Wisconsin City Spent Millions on a Grocery Store. It Didn't Go Well – Benjamin Rothove, Washington Post