Alex Brill- Trying To Understand Trump’s Tariffs on Drugs

·16 min·1 clip

Why would the Trump administration propose a 100% tariff on imported drugs to lower prices?

The episode begins with host Kevin Price introducing guest Alex Brill, an economist from the American Enterprise Institute, and praising AEI's fact-based approach. Price raises the topic of a Washington Post article describing the Trump administration's proposal for tariffs on imported drugs as a bizarre solution to high drug prices. Brill details the tariff plan, noting it is complicated and varies by drug type, manufacturer, and country, with exemptions for those investing in U.S. production. He points out that many drugs, like generics, won't be affected, but the policy is deal-oriented and may not achieve its goals. The discussion critiques the administration's static analysis, which assumes no behavioral changes, contrasting it with conservative thinking that considers dynamic responses like firms shifting production to avoid tariffs. Price and Brill compare this to progressive fairytale policymaking, noting both parties now embrace such approaches. They reference economic concepts like praxeology and Ludwig von Mises's work to underscore the importance of human action in policy outcomes. The conversation shifts to broader issues, with Brill arguing that tariffs distort trade and don't necessarily bring jobs to America, as firms seek efficiency elsewhere. They discuss the need for balance in drug innovation and competition, highlighting how brand manufacturers use tactics like product hopping to extend patents. Brill emphasizes that promoting generic competition through patent reform and FDA barrier reduction is key to lowering prices, not tariffs. Price expresses confusion over Trump's political strategy given low approval ratings, and Brill concludes that tariffs restrict trade and harm citizen welfare, advocating for more competition instead.

As heard by us

A tariff meant to bring drug production home may instead move it from one foreign country to another.

The episode looks at the Trump administration's interest in tariffs on imported drugs, including a discussed 100 percent rate, by following the incentives such a policy would create.

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Want to know whether a 100 percent drug tariff would bring pharmaceutical production home, or just send it looking for the next country?

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