But we're going to tariff our pharmaceuticals. And once we do that, they're going to come rushing back into our country because we're the big market. The advantage we have over everybody is that we're the big market. So we're going to be announcing very shortly a major tariff on pharmaceuticals. [00:00:16] And when you and when they hear that they will leave China. They will leave other places because they have to sell. Most of their product is sold here. President Donald Trump made that announcement in regard to pending tariffs [00:00:33] on pharmaceutical drugs. The night before, he announced that he would implement a 90 day pause on some of the reciprocal tariffs that he implemented against our trade partners. So, for the moment being, we're uncertain as to whether Trump is actually going to go through with tariffs on pharmaceutical imports. [00:00:52] However, while I agree with individuals who believe that it's critical for the U.S. To manufacture medicine domestically, I would like to see, you know, some strategy in place to make sure that we have manufacturing capacity set [00:01:08] and ready to go before implementing steep tariffs on pharmaceutical drugs that are imported to the US. Because Big Pharma already has a sweet little situation where they can price gouge Americans on pharmaceutical drugs. Imagine how much worse that's going to be if the Trump administration implements [00:01:27] or imposes tariffs on pharmaceutical imports without having a plan in place ahead of time to mitigate some of the high costs that would result from those tariffs. Now, initially, Trump had exempted pharmaceutical imports [00:01:43] from his reciprocal tariffs policy, but now he thinks that his tariffs will incentivize drug makers or drug companies to make drugs here domestically, though he hasn't revealed what amount he plans to tax drug imports. [00:01:58] So he just kind of made that statement off the cuff during a speech. Didn't give us any specifics. We don't have a lot to go off of. But in 2024, the US imported $213 billion worth of medicines. More than two and a half times the total a decade earlier. [00:02:16] So look, we have become increasingly dependent on drug manufacturers abroad, and I think that is a problem. I think it's important for us to produce drugs domestically. I am not against high tariffs on pharmaceutical drugs in order to, [00:02:32] you know, ramp up production domestically, but we need to have a plan in place to make sure we're ramping up production domestically. Of course, this has led to pharmaceutical companies panicking as the value of their shares declined amid the news that Trump announced yesterday. So, BMO Capital Markets Analyst Even Evan, I should say Evan Segerman, [00:02:53] rejects the notion that, pharmaceutical companies will move production here to the United States to avoid tariffs because he believes that Congress is actually going to step in. Which is interesting. I don't know if Evan lives in the United States and is at all aware [00:03:10] of how useless Congress is, but here's what he has to say. Given the complexity of the pharma supply chain, we do not expect the industry to make any major changes. These current tariffs are being pursued under emergency powers, which at worst will last until the end of the current administration and could [00:03:28] end sooner with an act of Congress. Now look, should Trump actually go through with pharmaceutical tariffs? The argument that, well, Trump's only in office for four years and after that it'll be fine is not a good argument. Obviously a lot of damage can be done, between now and then. [00:03:47] And we're not talking about items that people don't really need. We're not talking about cheap junk that's manufactured abroad and consumed by Americans because they've been conditioned to believe that consumerism is the only way to be happy. That's not what we're talking about. [00:04:02] We're talking about medicines that people need to survive, that people need to treat various conditions. So we're not playing around here. This isn't something that patients in America can just abstain from if they need [00:04:18] these drugs to remain alive and healthy. Now, despite Trump citing China in his justification for implementing tariffs on medicine, or possibly doing so in the future, it turns out that the US is actually pretty dependent on Europe, so the EU [00:04:34] medical and pharmaceutical product exports to the United States totaled about €90 billion, or $97 billion, in 2023. And that's according to the latest Eurostat data, Barclays or analysts over at Barclays said in a note last week that Europe accounted for about 80% [00:04:54] of the US trade deficit in biopharma. Now, in addition to that, Yes. We do rely on China to some extent when it comes to producing pharmaceutical drugs. However, India is also another player. India's pharma exports to the US mostly comprise generics [00:05:12] or cheaper versions of popular drugs. The US accounts for a third of India's overall pharma exports. So guys, that's huge because the profit margins on pharmaceutical drugs obviously are going to be much lower. [00:05:27] Pharmaceutical drugs or generic versions of pharmaceutical drugs are cheaper. And so the companies producing them stand to profit a lot less. If moving production to the United States is costly and will further eat [00:05:43] into the profits of these drug producers, they're not going to do it when it comes to generic drugs. So my point is, since we rely so heavily on a foreign country, India, to produce generic versions of pharmaceutical drugs that we need Implementing these tariffs does not necessarily mean [00:06:03] that those drugs, you know, will now be produced here in the United States. And the only outcome as it pertains to generic drugs is that we will end up paying higher prices for said medicines, which is a disaster. [00:06:18] So, generic drug prices will likely go up. And the companies that produce those generic drugs in India include Ipca Labs, Glenmark Pharma. And you also have Biocon. And the makers of some of those Indian made generic drugs [00:06:33] say that the profit margin again, so low they're not at all considering moving production to the United States. What's even more insane, though, is that Americans pay little or no tax on imports of Indian medicines, compared with the duty of nearly 11% paid [00:06:51] by Indians importing American medicines. Now, look, I give you that information because that is exactly the type of trade deficit that Trump will point to as justification for implementing these insane tariffs. But this setup do you guys understand this setup? [00:07:08] Actually, it benefits Americans who are not paying. Tariffs on generic drugs that are being imported from India. And I get it right. US drug manufacturers don't make as much profit. Because the 11% tariff on US imports to India are tariffed at 11%. [00:07:30] Okay. So that is a disincentive for Indians to. Buy US produced pharmaceutical drugs. I get it. It's not so great for the drug manufacturers in the States. But this setup is not at all harming American citizens. [00:07:48] American citizens are able to get their generic drugs that are produced in India for cheaper, because there is no tariff associated with that. They're not taxed on it. So, drugs that are likely to be hit hardest by President Trump's tariffs [00:08:04] if he does go through with pharmaceutical tariffs, are made by Arjen ex UCB or Novo Nordisk, which, I don't know if you know this. They're the makers of the popular diabetes and now weight loss drug Ozempic. And in contrast, the drug companies that are more immune, due to their, like, [00:08:23] diverse global manufacturing network and capabilities to produce here in the United States, include AstraZeneca, Roche and Sanofi. But it doesn't matter, because, look, guys, once tariffs are cited as the factor [00:08:41] behind the inflationary pressures, the inflation that you see in the market, other companies that aren't even impacted by those tariffs, companies that produce the drugs domestically here in the United States are just going to use the excuse of this inflationary period [00:08:57] to up their prices as well. And if that doesn't make much sense to you, maybe the way I'm articulating it is too confusing. I think Senator Elizabeth Warren did a really good job explaining it while speaking to CNBC. Take a look. So I know you don't want to listen to me on this, [00:09:12] but listen to Jerome Powell on this. The example he gave on Friday was from the last time that Trump's tariffs went into effect, and he said there was a tariff on washing machines. No surprise, the price of washing machines went up. [00:09:27] But the shocking part is the price of dryers went up as well, even though there was no imposition of tariffs on those. You tell me what that is. Except for price gouging. I'm trying to figure that out. Unless you have a clothesline, unless you have a clothesline out back, [00:09:45] you need a dryer, though. Senator. Well, you need the dryer, but the price doesn't go up on dryers. The cost of dryers. Didn't go up. Growing up, did you? Yeah. Yeah. - Yeah. - Yeah, totally. - And I love the smell. - The way you're. I love the way you're changing the subject. - That is an example. - They told me. [00:10:02] Gouging. - They told me we had less. - For you to eat. - That. - Yeah, that's exactly right. And I mean, we experienced that post Covid pandemic when the supply chain disruptions did lead to inflation in certain sectors of the economy. [00:10:18] But that gave an excuse to other companies that were not at all impacted by supply chain issues to just raise their prices because the consumers will bear it. And they said as much during their shareholder meetings. So Senator Warren is absolutely right about that. [00:10:34] Now, again, I want to revisit the argument I made earlier about how I do think it's important to produce pharmaceutical drugs domestically. I think it's important for the security of this country, because Covid also did show us that supply chain disruptions [00:10:50] are going to impact the stock of pharmaceutical drugs in the United States. There were all sorts of drug shortages during Covid because of those supply chain disruptions. So I'm not against tariffs. In fact, I've gotten some heat from some portion of the audience [00:11:06] because of my willingness or openness to implementing strategic targeted tariffs. I think in some cases it does make sense. I just don't agree with the way that Trump is doing this, because there aren't any plans in place to mitigate the pain that Americans are going to feel, [00:11:25] especially as it pertains to things that are non-negotiable for Americans lives like pharmaceutical drugs. And, you know, look, the one other thing I'll say is, wouldn't it be far better for the Trump administration to do what Democrats failed to do, [00:11:41] which was ensure that our Medicare system can negotiate the prices of all pharmaceutical drugs? I mean, he'd be a hero if he did that. But it is interesting that he's not doing that now. Democrats made it so we can negotiate the prices of ten pharmaceutical drugs, [00:12:02] many of which, by the way, were about to run out of their copyright, or their. Yeah. So basically the generic versions were going to come out anyway and it was going to be cheap. It would have been far better. If, you know, you have a situation where Medicare wasn't being price gouged [00:12:18] by pharmaceutical companies who get to charge whatever the hell they want with absolutely no negotiation. He's not doing that. He's not focusing on that. I don't know if he's going to go through with the pharmaceutical tariffs. I don't know if he's going to go through with any of these tariffs, to be quite frank, because he goes back and forth all the time. [00:12:33] Today he announced a 90 day pause on some of the reciprocal tariffs he implemented against our trade partners. So we're just going to have to wait and see, which I hate ending any video or story with. But that's really the most honest thing I can say about what's happening right now. No one really knows what's in that man's head and what he's [00:12:50] actually going to go through with. So we're going to have to wait and see. Every time you ring the bell below. An angel gets his wings. Totally not true. 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