POPULISTS often put their finger on problems that irk their countrymen. They also tend to come up with inadequate solutions to them. So it is with President Donald Trump’s plan, unveiled on May 11th, to lower the price of prescription drugs.

Drugs are more expensive in America than anywhere else. A month’s supply of Harvoni, which cures hepatitis C, costs $32,114 in America and $16,861 in Switzerland. Some cancer drugs can cost more than $150,000 a year. Mr Trump campaigned on a promise to reduce prices. He suggested that he would make it easier to import drugs from abroad and would force drug companies to lower prices for Americans, using the state’s bargaining power to save $300bn a year—preposterous, given that this is almost the entire sum the government spends on drugs. Nevertheless, his promises may have helped Mr Trump win the support of the majority of older voters.

The president’s plan, which he called the “most sweeping action in history to lower the price of prescription drugs”, lacks potency. A few ideas are welcome, including the proposal to hinder pharmaceutical firms that try to delay the arrival of generic versions of their drugs after patents expire. But many of Mr Trump’s suggestions need legislation, which is unlikely just now. No wonder his speech triggered a rise in the share prices of pharma firms.

Mr Trump also repeated an argument beloved of pharmaceutical companies—that foreigners are to blame for America’s high prescription-drug prices. Because Europeans pay too little for their drugs, goes the argument, Americans make up the losses by paying more. Mr Trump promises to instruct trade negotiators to demand that other countries extend periods for patents on American-made drugs, which in turn would raise costs for foreign governments. Even if this proves possible—and it seems unlikely to succeed with America’s big trading partners—it would not cut Americans’ drugs bills by a cent. That is because the price of drugs in America would remain at what the market will bear. Put another way, prices would continue to be largely set by pharma companies. For, unlike other countries, America does a bad job of negotiating down the prices of new drugs. If America really wanted cheaper drugs, it would copy what European countries do, and refuse to buy drugs that do not offer good clinical value for money.

A second opinion

Even short of such radical action, there are plenty of opportunities for useful reform. The government could give Medicare, the health scheme for the elderly, more power to negotiate prices and more freedom to determine the drugs it has to provide by law. At the moment it cannot haggle directly with drug companies. It could also expose the opaque and hugely profitable array of intermediaries which sit between the makers and takers of drugs. These firms are supposed to negotiate cheaper prices on behalf of insurance companies, passing savings on to consumers. In reality, a complex and largely confidential system of rebates on published prices has driven up the bill for patients, who pay from their own pockets and see little of the discounts.

The Trump administration criticises the rationing of treatment in other countries. But American insurers routinely restrict the use of costly drugs—only their approach disproportionately affects those of very modest means, since they have flimsier insurance plans. The Food and Drug Administration is set to relax the efficacy test in order to cut the cost of developing new drugs. Extra innovation is welcome but, unless America gets a grip on prices at the same time, it will lead to yet more costly new drugs offering poor clinical value.