WEBVTT - Trump Takes Over DC & Tariffs on Drugs 0:00:02.759 --> 0:00:07.480 This is Bloomberg Law with June Grossel from Bloomberg Radio. 0:00:08.720 --> 0:00:13.880 I'm announcing a historic action to rescue our nation's capital 0:00:13.920 --> 0:00:19.920 from crime, bloodshed, bedlam, and squalor and worse. This is 0:00:20.079 --> 0:00:23.760 Liberation Day in DC, and we're going to take our 0:00:23.800 --> 0:00:25.520 capital back. We're taking it back. 0:00:26.079 --> 0:00:30.800 Even as official Washington DC Police data shows violent crime 0:00:30.880 --> 0:00:34.040 reached a thirty year low last year and is down 0:00:34.120 --> 0:00:38.559 twenty six percent this year, President Trump declared a public 0:00:38.640 --> 0:00:43.120 safety emergency today and invoked a never before used power 0:00:43.159 --> 0:00:47.120 in DC's Home Rule Act to take over its police department. 0:00:47.720 --> 0:00:50.720 They love to spit in the face of the police. 0:00:50.760 --> 0:00:54.280 As the police are standing up there in uniform. They're 0:00:54.280 --> 0:00:57.800 standing and they're screaming at him an inch away from 0:00:57.840 --> 0:01:01.160 their face, and then they start spitting in their face. 0:01:01.960 --> 0:01:05.600 And I said, you tell them you spit and we hit, 0:01:06.720 --> 0:01:08.000 and they can hit real hard. 0:01:08.400 --> 0:01:12.679 Trump is also sending eight hundred National Guard troops onto 0:01:12.680 --> 0:01:15.880 the streets of the nation's capital. My guest is George 0:01:15.920 --> 0:01:20.280 Derrick Musgrove, a professor of history at the University of Maryland, 0:01:20.480 --> 0:01:24.280 Baltimore County. Does the president have the power to do this? 0:01:25.120 --> 0:01:27.800 The President actually has a tremendous amount of power under 0:01:27.840 --> 0:01:30.679 the Home Rule Act, and he's going to operate within 0:01:30.760 --> 0:01:33.759 that realm. So he's going to send out National Guard 0:01:33.760 --> 0:01:36.760 troops onto the streets of DC, as well as the 0:01:36.840 --> 0:01:41.720 smattering of federal agents from other agencies. That's all within 0:01:42.120 --> 0:01:44.920 his legal purview under the Home Rule Act in nineteen 0:01:45.000 --> 0:01:48.640 seventy three, which gives the President control of the DC 0:01:48.840 --> 0:01:53.760 National Guard and in emergency situation allows him to take 0:01:53.800 --> 0:01:57.600 over the Metropolitan Police Department for up to thirty days. 0:01:57.960 --> 0:01:59.800 Tell us a little bit more about the Home Rule. 0:02:00.760 --> 0:02:03.640 So the Home Rule Act, which was fass in nineteen 0:02:03.680 --> 0:02:07.880 seventy three by Congress, gives the city a local government, 0:02:08.000 --> 0:02:11.120 the mayor, a thirteen member council, and a number of 0:02:11.120 --> 0:02:13.840 other local offices. And it does that for the first 0:02:13.840 --> 0:02:15.919 time in about one hundred years. And so the eighteen 0:02:16.000 --> 0:02:19.760 seventy four Congress ended local governance in the District of 0:02:19.800 --> 0:02:24.880 Columbia and initiated one century period where the President basically 0:02:25.919 --> 0:02:30.360 ran the city through three appointed commissioners. That became an 0:02:30.360 --> 0:02:33.600 embarrassment after World War Two, and so Congress moved to 0:02:34.080 --> 0:02:39.080 slowly but surely returned certain elements of democracy to the district. 0:02:39.360 --> 0:02:41.680 The kind of the capstone of that process was for 0:02:41.720 --> 0:02:46.160 the Home Rule Act. What the president cannot do is 0:02:46.240 --> 0:02:50.239 simply wipe that law away. It was passed by Congress. 0:02:50.280 --> 0:02:53.080 It has to be repealed or altered by Congress. But 0:02:53.200 --> 0:02:56.280 again within the purview of the law, the president actually 0:02:56.320 --> 0:03:00.400 has a significant amount of power over law enforcement the city, 0:03:00.400 --> 0:03:03.640 and that was done intentionally by Congress. And so aside 0:03:03.680 --> 0:03:06.320 from his control of the National Guard and his ability 0:03:06.440 --> 0:03:10.200 to essentially bring the Metropolitan Police Department under his control, 0:03:10.560 --> 0:03:12.839 he also appoints the US Attorney who is the chief 0:03:12.919 --> 0:03:15.160 law enforcement officer in the district that we don't have 0:03:15.200 --> 0:03:18.679 district attorneys here in the nation's capital, and so the 0:03:18.760 --> 0:03:22.519 US Attorney prosecutes pretty much all adult crimes, all felonies. 0:03:22.919 --> 0:03:26.799 And how long can he take over the DC Police Department. 0:03:27.360 --> 0:03:28.960 He can do it for a period of up to 0:03:29.040 --> 0:03:33.480 thirty days. After that, the assumption is that any emergency 0:03:33.520 --> 0:03:36.440 that the President would need to take over the police 0:03:36.440 --> 0:03:39.600 department for would have passed. But he is capable of 0:03:39.640 --> 0:03:42.760 doing that. He was talked off the ledge of doing 0:03:42.760 --> 0:03:45.800 that back in twenty twenty during the Black Lives Matter 0:03:45.880 --> 0:03:49.560 protests outside the White House. Again claims as he's doing now, 0:03:49.680 --> 0:03:52.680 that there was an emergency in the district and that 0:03:52.760 --> 0:03:56.080 he should take pretty radical measures in order to address 0:03:56.080 --> 0:04:00.800 that emergency, and so he very closely considered over the MPD. 0:04:01.040 --> 0:04:04.600 Then he was dissuaded from doing so by local elected 0:04:04.680 --> 0:04:08.080 officials as well as some of his advisors, and instead 0:04:08.160 --> 0:04:11.360 he just deployed the National Guard and several other federal 0:04:11.360 --> 0:04:14.839 assets in order to clear Lafayette Park, which I think 0:04:14.880 --> 0:04:18.200 many people at the time in hindsight saw it as 0:04:18.240 --> 0:04:21.080 a pretty robust violation of the First Amendment right to 0:04:21.120 --> 0:04:22.120 the people protesting. 0:04:22.160 --> 0:04:25.960 There are there any restrictions on the president's use of 0:04:26.000 --> 0:04:27.000 the National Guard. 0:04:27.720 --> 0:04:33.039 There's not restrictions in the law. There are, however, larger 0:04:33.640 --> 0:04:37.760 problems with using the Guard in urban policing context. I mean, 0:04:37.800 --> 0:04:40.760 the Guard is not trained for urban policing. It's not 0:04:40.920 --> 0:04:44.479 even particularly well equipped for urban policing. And the other 0:04:44.520 --> 0:04:47.520 problem that he has, which he's really not addressing in 0:04:47.560 --> 0:04:49.880 any way, shape or form, is that the National Guard 0:04:49.960 --> 0:04:54.719 regularly collaborates with the Metropolitan Police Department pretty much on 0:04:54.760 --> 0:04:58.480 every inauguration. Back in the late nineteen eighties and early 0:04:58.560 --> 0:05:01.359 nineteen nineties, the National Guard actually helped the police with 0:05:01.480 --> 0:05:04.800 crime suppression, because at that point, the DC did have 0:05:05.160 --> 0:05:09.600 a pretty robust crime crisis. But the National Guard, understanding 0:05:09.640 --> 0:05:14.400 its limitations and MPD understanding the problem of putting uniformed 0:05:14.600 --> 0:05:18.119 soldiers on the street, made sure that the National Guard 0:05:18.200 --> 0:05:21.839 during that period pretty much only did support the work, 0:05:22.040 --> 0:05:25.440 and MPD stuck with all the law enforcement work and 0:05:25.600 --> 0:05:28.880 interacting with the public. And that's because all of those 0:05:28.960 --> 0:05:33.000 examples that I just gave, the National Guard was cooperating 0:05:33.320 --> 0:05:37.039 with local authorities. The federal authorities were coordinating with the 0:05:37.080 --> 0:05:40.560 mayor and with the council. What's unique about the deployment 0:05:40.600 --> 0:05:44.120 in twenty twenty, and also the one that he announced today, 0:05:44.880 --> 0:05:48.480 is that the White House is not just not coordinating 0:05:48.520 --> 0:05:52.640 with local authorities, but is actively seeking to undermine through 0:05:52.680 --> 0:05:54.880 its deployment of federal assets to the city. 0:05:55.520 --> 0:05:59.400 Is this similar to Trump sending troops and the National 0:05:59.440 --> 0:06:04.400 Guard into Los Angeles and the legality of that is 0:06:04.440 --> 0:06:07.080 going to be decided at a trial this week. 0:06:07.480 --> 0:06:09.640 Yes, I mean this is very similar, not just the 0:06:09.640 --> 0:06:12.600 Los Angeles, but I would also argue New York. And 0:06:12.640 --> 0:06:17.560 so the President has pretty consistently not just during his 0:06:17.720 --> 0:06:20.120 first term and now and to his second but for 0:06:20.240 --> 0:06:24.240 much of his adult life attacks large democratic cities as 0:06:24.320 --> 0:06:27.720 crime ridden, as stilthy, and as a place that were 0:06:27.800 --> 0:06:30.560 he in charge of them, he would clean up with 0:06:30.640 --> 0:06:33.760 an iron fist, And that rhetoric has become more focused 0:06:33.800 --> 0:06:36.760 and more specific once he got into elected office, and 0:06:36.839 --> 0:06:40.320 so he's gone after those places once he got official power. 0:06:40.839 --> 0:06:42.920 You can see this in Los Angeles with the Ice raid, 0:06:43.080 --> 0:06:46.560 where he's essentially going around the local government, creating a 0:06:46.600 --> 0:06:48.800 crisis and then sending in the National Guard to try 0:06:48.839 --> 0:06:51.520 and address that crisis. You can see this in New York, 0:06:51.640 --> 0:06:54.880 where he is really using the Justice Department in a 0:06:55.120 --> 0:06:59.279 criminal manner to get the mayor, Eric Adams in his 0:06:59.440 --> 0:07:02.359 pocket so that he can have relatively free reign in 0:07:02.400 --> 0:07:06.120 the city. And the one place where he's already allowed 0:07:06.120 --> 0:07:09.720 to do this stuff without having to go around or 0:07:10.000 --> 0:07:13.200 budget the law is Washington, DC, because he already has 0:07:13.240 --> 0:07:15.240 a significant amount of power in the city, and so 0:07:15.680 --> 0:07:17.720 he appears to be planning to use at least a 0:07:17.760 --> 0:07:18.800 portion of that power. 0:07:18.960 --> 0:07:23.680 So any ruling in the LA trial won't apply to DC. 0:07:23.600 --> 0:07:28.280 Then, correct, The President has way more power in the 0:07:28.320 --> 0:07:31.520 federal District than he does pretty much anywhere else in 0:07:31.520 --> 0:07:34.840 the United States, and that's specifically enshrined in the Home 0:07:34.920 --> 0:07:38.080 Rule Act. But again, there is what's legal and there's 0:07:38.120 --> 0:07:41.200 what's right, and I think the President is towing the 0:07:41.200 --> 0:07:43.640 line at least when it comes to what's legal. He 0:07:43.760 --> 0:07:45.560 is not doing that when it comes to what's right. 0:07:46.840 --> 0:07:51.280 This move apparently stems from a carjacking of a former 0:07:51.560 --> 0:07:57.760 Doege employee, and the President declared a public safety emergency. 0:07:58.320 --> 0:08:01.200 Is he the final word on whether they is an emergency? 0:08:02.160 --> 0:08:04.280 Well, I mean, it wasn't even a carjacking. It was 0:08:04.400 --> 0:08:08.720 an alleged attempted carjacking that was actually stopped by an 0:08:08.840 --> 0:08:11.520 MPD officer. I mean, the whole reason we have a 0:08:11.560 --> 0:08:15.440 clear record of this is because an MPD officer saw 0:08:15.480 --> 0:08:19.960 the alleged crime taking place, intervened and probably saved mister 0:08:20.040 --> 0:08:23.720 Korustine from much horse beating and perhaps the loss of 0:08:23.800 --> 0:08:28.080 his property, which speaks to me to a relatively good 0:08:28.320 --> 0:08:31.400 policing regime here in the city. But the answer to 0:08:31.480 --> 0:08:35.280 your question is, unfortunately no. The Home Rule Act, like 0:08:35.440 --> 0:08:39.400 most laws in this country, was written with the assumption 0:08:39.960 --> 0:08:43.040 that the person carrying them out in this case, the President, 0:08:43.520 --> 0:08:45.960 would be a gentleman and a statesman and wouldn't just 0:08:46.040 --> 0:08:48.480 lie to get their way. And so the Home Rule 0:08:48.520 --> 0:08:51.320 Act is written to say that if the President determines 0:08:51.320 --> 0:08:53.480 that there is an emergency, he is able to take 0:08:53.520 --> 0:08:57.840 emergency control of a metropolitan police department. That leaves the 0:08:57.880 --> 0:09:02.480 determination with the president unfortunate, and so that's where we are. 0:09:03.200 --> 0:09:08.160 Trump has also threatened that if Zoran Mandami wins the 0:09:08.200 --> 0:09:11.560 mayoral race in New York City, he's going to take 0:09:11.600 --> 0:09:12.840 over that city. 0:09:13.600 --> 0:09:16.720 The president does, not, to my mind, have legal authority 0:09:17.040 --> 0:09:20.360 to take over an American city. DC is a unique 0:09:20.440 --> 0:09:23.360 case because it is the federal district. But that sounds 0:09:23.360 --> 0:09:25.960 like bluster and misdirections. 0:09:25.280 --> 0:09:28.680 Me looking at history. Have any other presidents tried to 0:09:28.720 --> 0:09:30.800 do something similar in DC? 0:09:31.679 --> 0:09:35.200 Yes, and no. There was a push primarily by Congress, 0:09:35.240 --> 0:09:38.280 not by the president, in the eighteen seventies district the 0:09:38.320 --> 0:09:42.440 district of democracy entirely, and that was successful, and so 0:09:42.520 --> 0:09:45.800 in eighteen seventy four Congress repealed all democracy in the 0:09:45.840 --> 0:09:48.600 district and then gave the power to the president to 0:09:48.800 --> 0:09:52.640 administer it directly. There was also a pretty big push 0:09:52.679 --> 0:09:56.600 by the Nixon administration to campaign against the district in 0:09:56.679 --> 0:10:00.400 nineteen sixty eight as the quote unquote crime capital of 0:10:00.440 --> 0:10:03.520 the United States, and when he got into office, he 0:10:03.640 --> 0:10:07.200 put together a very robust anti crime package that DC 0:10:07.400 --> 0:10:13.120 residents roundly rejected. The difference between then and now, though, 0:10:13.320 --> 0:10:16.640 is that the district didn't have a home rule government 0:10:16.720 --> 0:10:21.240 in nineteen sixty nine when Nixon begins to implement these policies. 0:10:21.520 --> 0:10:24.160 And the other is that there were liberals in Congress 0:10:24.360 --> 0:10:27.280 with power who were willing to push back against the 0:10:27.320 --> 0:10:31.640 president's initiatives. We don't have those circumstances now. If the 0:10:31.679 --> 0:10:34.520 president takes these powers, it is a violation at least 0:10:34.520 --> 0:10:37.160 of the spirit, if not the letter, of the law 0:10:37.360 --> 0:10:41.200 of home rule. And when it comes to Congress, you 0:10:41.280 --> 0:10:45.439 really don't have people in power in the Republican majority 0:10:45.480 --> 0:10:48.800 who have any intention of checking the president's whims when 0:10:48.840 --> 0:10:50.320 it comes to these situations. 0:10:50.559 --> 0:10:53.400 But it does appear that what Trump is doing here 0:10:53.960 --> 0:10:55.120 is all legal. 0:10:55.559 --> 0:10:57.840 Well, the only thing I'd underscore is that I think 0:10:57.840 --> 0:11:02.480 that we've become quite numb to the president many in 0:11:02.600 --> 0:11:05.840 various efforts to violate the rights of those Americans with 0:11:05.920 --> 0:11:09.800 whom he does not agree. So when he began speaking 0:11:09.840 --> 0:11:13.240 of federalizing the district, the question that many people asked 0:11:13.360 --> 0:11:16.719 was not should he do it? But can he do it? 0:11:17.200 --> 0:11:19.800 And I think it's important to not only ask can 0:11:19.840 --> 0:11:23.280 he do it, which unfortunately he can, but should he 0:11:23.360 --> 0:11:26.920 do it? So to remind folks that this is not 0:11:27.000 --> 0:11:29.240 a violation of the law, but it is a violation 0:11:29.360 --> 0:11:33.720 of our principles, of our principles of no taxation without representation, 0:11:33.800 --> 0:11:36.600 of our principles of every citizen has a specific set 0:11:36.640 --> 0:11:40.480 of rights that other citizens shouldn't look to violate, and 0:11:40.840 --> 0:11:44.360 the President is violating those principles in a very robust 0:11:44.360 --> 0:11:45.480 and unfortunate manner. 0:11:45.760 --> 0:11:48.440 Thanks for joining me on the show. Thanks so much 0:11:48.480 --> 0:11:51.880 for joining me on the show. That's George Derrick Musgrove, 0:11:52.240 --> 0:11:56.320 a professor of history at the University of Maryland, Baltimore County. 0:11:56.640 --> 0:11:59.760 Coming up next on the Bloomberg Law Show, Trump is 0:12:00.000 --> 0:12:02.520 threatening to impose tariffs of up to two hundred and 0:12:02.520 --> 0:12:07.760 fifty percent on pharmaceutical imports. What are the potential consequences. 0:12:08.160 --> 0:12:12.720 I'm June Grosso and you're listening to Bloomberg. President Trump 0:12:12.800 --> 0:12:15.920 is threatening to impose tariffs of up to two hundred 0:12:15.960 --> 0:12:20.120 and fifty percent on pharmaceutical imports. He said there would 0:12:20.160 --> 0:12:23.120 be an initially small tariff, and then in a year 0:12:23.320 --> 0:12:25.920 or at most a year and a half, the tariffs 0:12:25.960 --> 0:12:28.640 will go up to one hundred and fifty percent and 0:12:28.679 --> 0:12:31.600 then up from there. It's not the first time that 0:12:31.760 --> 0:12:35.840 Trump has threatened to impose steep tariffs on pharma. Here 0:12:35.880 --> 0:12:39.600 he is at the National Republican Congressional Committee President's dinner 0:12:40.040 --> 0:12:40.640 in April. 0:12:41.600 --> 0:12:44.360 We're going to tariff for our pharmaceuticals. And once we 0:12:44.440 --> 0:12:46.880 do that, they're going to come rushing back into our 0:12:46.920 --> 0:12:49.000 country because with a big market. 0:12:49.200 --> 0:12:52.920 Trump wants more farmer companies to manufacture their drugs in 0:12:52.960 --> 0:12:56.840 the United States. Joining me is healthcare attorney Harry Nelson 0:12:56.960 --> 0:13:00.920 of Leech Tishman Nelson Hardiman. Harry start by telling us 0:13:00.920 --> 0:13:03.440 about these threatened tariffs on drugs. 0:13:04.440 --> 0:13:07.880 President Trump is threatening these tariffs up to two hundred 0:13:08.360 --> 0:13:12.560 and fifty percent on pharmaceutical tariffs. He's using this Section 0:13:12.760 --> 0:13:16.640 two point thirty two right to claim a national security 0:13:16.679 --> 0:13:22.920 interest under the theories that the shrinkage in US production 0:13:23.120 --> 0:13:27.000 of drugs is a national security risk and that these 0:13:27.040 --> 0:13:31.359 tariffs will sort of force drug companies to build infrastructure 0:13:31.400 --> 0:13:33.680 in the United States to ensure access to the drug 0:13:33.720 --> 0:13:37.480 supply and prevent disruption. So that's the theory behind this plan. 0:13:37.840 --> 0:13:40.760 But in the short term, he's planning to, you know, 0:13:41.040 --> 0:13:45.560 essentially significantly increase the price of all imported drugs to 0:13:45.600 --> 0:13:47.400 create the incentive to make that happen. 0:13:48.040 --> 0:13:51.040 Why do you think he's targeting pharmaceuticals in particular. 0:13:51.559 --> 0:13:54.040 I think the pharmaceutical industry is first of all, it's 0:13:54.080 --> 0:13:57.719 just a massive part of our overall economy. But I 0:13:57.800 --> 0:14:00.440 also think this is a way to get attention. And 0:14:00.480 --> 0:14:03.600 I think we've had a history, even from President Trump's 0:14:03.600 --> 0:14:08.600 first administration, where drug prices were seen as a threat, 0:14:08.679 --> 0:14:11.600 something that upsets consumers. And I think ultimately, even though 0:14:11.720 --> 0:14:15.800 people ultimately need American consumers need medications, they're kind of 0:14:15.840 --> 0:14:19.720 an easy target to pick on from a popularity standpoint. 0:14:19.960 --> 0:14:24.600 Trump wants more FORMA companies to manufacture their drugs in 0:14:24.640 --> 0:14:30.880 the US, but already three companies, Johnson and Johnson, Astrazenica, 0:14:31.120 --> 0:14:35.360 and Eli Lilly said they would spend fifty five billion, 0:14:35.480 --> 0:14:40.440 fifty billion, and twenty seven billion, respectively on expanding drug 0:14:40.520 --> 0:14:41.840 manufacturing here. 0:14:42.720 --> 0:14:45.560 Yeah, say pharmaceuticals that you're mentioning, you know, which are 0:14:45.600 --> 0:14:49.200 already essentially global companies. They're all responding that they want 0:14:49.240 --> 0:14:52.600 to increase the production capacity in the United States at 0:14:52.640 --> 0:14:54.800 the same time that they're threatening that this is going 0:14:54.880 --> 0:14:59.680 to really hurt patients, urt healthcare providers access to medication, 0:14:59.800 --> 0:15:02.800 and really hurt R and D research and development. But 0:15:02.880 --> 0:15:05.880 they are responding and trying to, you know, to give 0:15:05.880 --> 0:15:08.920 a signal that they're prepared to ramp up their US 0:15:08.960 --> 0:15:09.600 based production. 0:15:10.720 --> 0:15:14.440 I mean, will this increase the cost of pharmaceuticals to 0:15:14.560 --> 0:15:17.800 consumers if he puts these tariffs on absolutely. 0:15:17.840 --> 0:15:20.160 First of all, we should say, even before he does 0:15:20.160 --> 0:15:24.000 anything specific, we're already looking at, you know, a different 0:15:24.080 --> 0:15:25.760 teriffs of aning on what part of the world you're 0:15:25.880 --> 0:15:29.760 talking about. But we already have EU tariffs at fifteen percent, 0:15:29.920 --> 0:15:33.240 India twenty five percent. I think China's at ten percent, 0:15:33.280 --> 0:15:36.920 So there already is you know, a lower level tariffs 0:15:36.920 --> 0:15:39.840 that are but obviously we're talking about potentially increasing these 0:15:39.840 --> 0:15:43.280 as much as twenty five times. So either American consumers 0:15:43.360 --> 0:15:47.600 are already paying the price increases or the drug manufacturers 0:15:47.640 --> 0:15:50.600 are containing you know these and just taking a hit 0:15:50.680 --> 0:15:53.080 on their bottom line. But this is obviously a dramatic 0:15:53.160 --> 0:15:56.080 going from ten to fifteen percent to two hundred and 0:15:56.080 --> 0:15:57.840 fifty percent. It's pretty radical. 0:15:58.360 --> 0:16:02.720 He said, other nations make a fortune on pharmaceuticals, citing 0:16:02.840 --> 0:16:06.560 drugs imported from China and Ireland. Is that true? And 0:16:06.920 --> 0:16:11.440 don't pharmaceutical companies in the US make a fortune as well? 0:16:11.600 --> 0:16:13.880 Yeah? Obviously, like there are a lot of US companies 0:16:13.920 --> 0:16:15.760 making a lot of money on drug It's interesting that 0:16:15.800 --> 0:16:20.080 reference to Ireland is super interesting. Ireland is, among other things, 0:16:20.120 --> 0:16:24.040 notably producing some of the GLP one weight loss drugs 0:16:24.080 --> 0:16:27.280 that are just surging in demand. You know, some of 0:16:27.320 --> 0:16:30.360 glue tides, there's eppetide, and so you know, when we 0:16:30.360 --> 0:16:33.840 talk about China and India, we're talking much more about 0:16:33.880 --> 0:16:37.320 the generics. And so the reality is like our drug 0:16:37.360 --> 0:16:42.200 supply is fairly multinational between Europe and Asia. Yes, these 0:16:42.200 --> 0:16:45.119 countries are producing a lot of the drugs and inherently 0:16:45.160 --> 0:16:48.520 making profits that come from those drugs. But it's not 0:16:48.560 --> 0:16:51.920 like we don't have any US manufacturing. It's just a 0:16:52.040 --> 0:16:54.880 question of how much of what the alocation is today 0:16:54.880 --> 0:16:56.000 and what he wants it to be. 0:16:56.480 --> 0:16:58.240 Has he said what he wants it to be, It 0:16:58.240 --> 0:16:58.800 sounds like he. 0:16:58.800 --> 0:17:01.000 Wants it to be something like one hundred percent of 0:17:01.040 --> 0:17:04.359 the US or ninety ten. But it's interesting question. I 0:17:04.359 --> 0:17:07.560 haven't seen exact data, but I think it's spared to 0:17:07.560 --> 0:17:12.040 say that the majority of drugs that Americans are consuming 0:17:12.119 --> 0:17:15.320 are imported. Depending on how you measure, you know, whether 0:17:15.320 --> 0:17:18.840 you're measuring revenue or actual production, the percentage is going 0:17:18.880 --> 0:17:20.480 to be different. But it definitely is the case that 0:17:20.520 --> 0:17:23.480 we have more foreign sources. He's certainly trying to reverse 0:17:23.520 --> 0:17:26.000 that and make make sure that the overwhelming majority of 0:17:26.080 --> 0:17:27.760 drugs are coming from US production. 0:17:28.480 --> 0:17:32.040 On July thirty first, he sent letters to seventeen drug 0:17:32.119 --> 0:17:36.400 companies urging them to lower drug prices. US drug prices 0:17:36.440 --> 0:17:40.359 by September twenty ninth to most favored nation amounts paid 0:17:40.400 --> 0:17:42.520 by other nations. What does that mean? 0:17:42.920 --> 0:17:46.360 Most favored nation is just a reference to essentially, whatever 0:17:46.520 --> 0:17:51.600 the best pricing that a particular company is offering in 0:17:51.640 --> 0:17:55.240 the marketplace it has to offer to the United States. 0:17:55.440 --> 0:17:58.439 So this has been a particular Again, this is a 0:17:58.480 --> 0:18:01.520 theme that went back to the first Trump administration, which 0:18:01.560 --> 0:18:06.160 is that America essentially props up the pharmaceuticals by paying 0:18:06.200 --> 0:18:09.920 higher prices for drugs. We know that Medicare, for example, 0:18:10.080 --> 0:18:14.240 has limitations that prohibit the Medicare program, the US government 0:18:14.560 --> 0:18:18.280 from negotiating with drug manufacturers over certain prices. We saw 0:18:18.800 --> 0:18:23.240 legislation and the Biden administration to begin to allow negotiations 0:18:23.280 --> 0:18:26.080 on some drugs. But the point here is that most 0:18:26.119 --> 0:18:28.320 favorite nation and status would mean that the US would 0:18:28.320 --> 0:18:31.960 not be subsidizing drug costs drug development costs for the 0:18:32.000 --> 0:18:34.840 rest of the world and allowing them to take much 0:18:34.920 --> 0:18:38.840 cheaper costs while Americans and insurance companies absorbed all those 0:18:38.840 --> 0:18:39.760 additional expenses. 0:18:39.920 --> 0:18:43.000 Will you explain a little more detail how the US 0:18:43.119 --> 0:18:47.239 is subsidizing the development costs for other countries. 0:18:47.440 --> 0:18:50.080 Right what's happening, essentially is that because we have certain 0:18:50.119 --> 0:18:53.919 government programs, most notably in Medicare, that are locked into 0:18:54.440 --> 0:18:57.639 paying certain very high costs for drug companies and not 0:18:57.720 --> 0:19:00.240 being able to negotiate. And if you think about their 0:19:00.240 --> 0:19:03.800 purchasing power, you know, the Medicare program is without question 0:19:04.320 --> 0:19:07.600 the single largest purchaser of drugs. So I think since 0:19:07.680 --> 0:19:10.720 the data is that you know, in many cases, particularly 0:19:10.720 --> 0:19:13.680 on brand name prescription drugs, the US and the Medicare 0:19:13.720 --> 0:19:16.879 program is paying two and a half to three times 0:19:17.200 --> 0:19:22.280 higher than other advanced industrialized countries, and so in many cases, 0:19:22.400 --> 0:19:26.119 basically two hundred and fifty percent over foreign drug prices. 0:19:26.160 --> 0:19:28.119 It might be that that two hundred and fifty percent 0:19:28.200 --> 0:19:31.760 tariff that President Trump is referencing was based on that 0:19:31.840 --> 0:19:34.600 data point alone. And you know, the argument that the 0:19:34.640 --> 0:19:38.119 drug companies make is that are paying these higher prices 0:19:38.160 --> 0:19:42.360 here in America helps sustain their innovation, their drug development, 0:19:42.760 --> 0:19:45.119 helping you know, patients around the world who can't afford it. 0:19:45.400 --> 0:19:47.159 But the reality is, when you look at other advanced 0:19:47.200 --> 0:19:50.680 industrialized countries, including you know, the European Union for example, 0:19:50.920 --> 0:19:54.680 there's no explanation why we should be bearing that higher burden. Essentially, 0:19:54.760 --> 0:19:56.919 you know, the argument is that when we pay for 0:19:57.040 --> 0:20:00.119 drugs with public funded research in the US as well, 0:20:00.480 --> 0:20:02.760 that we're essentially paying the burden once you know, in 0:20:02.800 --> 0:20:05.159 terms of our tax level, and then another time at 0:20:05.160 --> 0:20:08.720 the pharmacy. It's an effort to rebalance. I think the. 0:20:08.600 --> 0:20:12.240 Real solution would be to change the medicare laws. 0:20:13.080 --> 0:20:15.760 That would be one huge piece of the puzzle, allowing 0:20:15.760 --> 0:20:19.399 the government to negotiate for fair pricing. I think another 0:20:19.520 --> 0:20:22.480 just another data point here is that supposedly, I think 0:20:22.480 --> 0:20:26.280 the number is seventy five percent of global drug company 0:20:26.320 --> 0:20:30.280 profits come from their US sales, so you can imagine 0:20:30.280 --> 0:20:33.560 there's a lot of room to negotiate pricing downward where 0:20:33.600 --> 0:20:36.520 the drug companies can still do just find and make 0:20:36.520 --> 0:20:40.440 a reasonable return on their investments from the Medicare program 0:20:40.640 --> 0:20:44.199 without us having to carry, you know, their entire profitability 0:20:44.520 --> 0:20:47.399 and worry about their shareholders. So it seems like a 0:20:47.520 --> 0:20:52.680 rational move to allow the Medicare program and other large 0:20:52.760 --> 0:20:57.080 governmental programs to negotiate like anybody else in the marketplace 0:20:57.160 --> 0:20:59.280 over what the fair price is. But you know, the 0:20:59.359 --> 0:21:01.879 drug companies have lobbied to prevent that from happening for 0:21:01.920 --> 0:21:02.560 a long time now. 0:21:02.840 --> 0:21:06.040 So I was going to ask you why they can't negotiate, 0:21:06.200 --> 0:21:08.160 and I guess it was the lobbying by the drug 0:21:08.200 --> 0:21:09.480 companies that stops that. 0:21:10.400 --> 0:21:13.480 Yeah, the drug companies are certainly one of the most 0:21:13.480 --> 0:21:17.440 powerful groups. They've had bipartisan support, and you know, they've 0:21:17.560 --> 0:21:21.720 used the amazing advances that we've made in pharmaceutical research 0:21:21.760 --> 0:21:26.080 and innovation and particularly getting cutting edge drugs, life saving, 0:21:26.200 --> 0:21:29.879 really game changing drugs on many medications into the market 0:21:30.240 --> 0:21:33.960 to fund massive amounts of hundreds of millions of dollars 0:21:33.960 --> 0:21:38.480 of lobbying Congress to support them, and we have not 0:21:38.640 --> 0:21:41.600 yet seen a real turn, you know, on the part 0:21:41.640 --> 0:21:44.680 of Congress, And one of the really interesting questions will 0:21:44.680 --> 0:21:48.000 be how far you know President Trump may be able 0:21:48.080 --> 0:21:49.119 to change that. 0:21:50.119 --> 0:21:55.959 Drug companies have said that tariffs might disrupt international supply chains. 0:21:56.320 --> 0:21:59.560 Is there a possibility that if tariffs are imposed, people 0:21:59.600 --> 0:22:02.960 will not be able to get the drugs that they need. 0:22:03.600 --> 0:22:05.280 Well, I mean, I think the question is going to 0:22:05.320 --> 0:22:08.560 be who's going to bear the burden of these if 0:22:08.600 --> 0:22:10.600 prices increase when we say two hundred and fifty percent, 0:22:10.600 --> 0:22:15.560 we're basically seeing increasing prices twenty five times. So obviously, 0:22:15.840 --> 0:22:18.359 if you're a hospital, for example, and you need to 0:22:18.359 --> 0:22:23.120 buy injectable drugs to have the inventory for when patients 0:22:23.200 --> 0:22:27.359 need particular drugs or cancer drugs, you know, the question 0:22:27.480 --> 0:22:29.320 is who's going to pick up that cost? If an 0:22:29.359 --> 0:22:33.679 injectable drug went from costing twenty dollars today to all 0:22:33.680 --> 0:22:37.560 of a sudden five hundred dollars proper single file or whatever, 0:22:37.760 --> 0:22:40.720 you know, just patient, that's a dramatic problem. And you 0:22:40.720 --> 0:22:45.360 can imagine that budgets from hospital reimbursement from insurance companies 0:22:45.400 --> 0:22:48.040 are going to limit uptake and it's going to take 0:22:48.080 --> 0:22:51.600 time to build new facilities in the US not subjects 0:22:51.600 --> 0:22:54.080 to the shriffs. That might take years, and so in 0:22:54.160 --> 0:22:56.800 the meantime, you can imagine that there's going to be 0:22:57.000 --> 0:23:00.399 a point where certain drugs just won't be available certain 0:23:00.400 --> 0:23:02.280 hospitals and in certain parts of the US. 0:23:02.440 --> 0:23:04.640 I mean, we should point out that the White House 0:23:04.680 --> 0:23:09.879 previously pledged to impose steep tariffs on pharmaceuticals and later 0:23:10.000 --> 0:23:15.080 backed off, so this could just be floating this look. 0:23:15.119 --> 0:23:19.960