Donald Trump's Tariffs Probably Won't Worsen the Addiction Crisis
But some of his other policies probably will
Humility is an underrated virtue these days. Looking at the careers of people like Donald Trump, who is admired despite, and perhaps because, he basically never admits fault in spite of his many, many personal and professional failings, it's tempting to think that admitting to being wrong about something is for suckers. And while it may be a good public relations strategy to refuse to say you were wrong even when it's obvious that you were, it's not exactly a recipe for good decision making. The self-awareness needed to look at a view that one had, ask what drove that conclusion, and re-assess the priors that lead to that line of thinking is a much better indicator of a well-developed mind than steadfastly holding to a view while ignoring or outright denying facts to the contrary.
It is in this spirit of humility that this article comes to you. The original spark of inspiration for this article came from fellow New Liberal Ke'aun Charles's post We Can't Do YIMBY Without Free Trade. Charles presents a good case for why free trade and abundant housing go hand in hand, and thus why Donald Trump's swingeing global tariffs on imports, including ones vital to construction such as steel, lumber, and drywall, could reduce construction and increase housing costs for ordinary Americans. The argument was compelling, and as with any argument one finds persuasive, it is appealing to try to apply the same logical framework in other related places.
Having just come off writing about drug addiction and the merits of medication assisted addiction treatment in the context of San Francisco's addiction crisis, it seemed logical to apply Charles's thesis in this realm as well. On the surface, it seems like a slam dunk argument. The US imports a lot of pharmaceuticals, as well as a lot of the ingredients needed to make pharmaceuticals. It stands to reason that higher tariffs on everything, including precursor chemicals and finished products like the various formulations of methadone and buprenorphine, would lead to increases in the cost of medication assisted addiction treatment, which in turn would lead to a downturn in utilization and an uptick in relapses as well as overdoses.
But in researching the production and pricing of medications for the treatment of opioid addiction, it became clear that the Trump tariffs would probably increase the cost of addiction treatment medications by fairly negligible amounts. That is not to say that there are no Trump policies that are likely to reduce participation in addiction treatment programs, but they will be found in areas besides trade policy.
How do you make drugs anyway?
To understand the contributors to addiction treatment costs, it helps to know how exactly many of our advanced pharmaceuticals are produced in the first place. With some exceptions like alcohol, tobacco, cannabis, and morphine, most drugs today aren't naturally occurring in useful quantities. You have to synthesize them from naturally occurring precursor chemicals. To say that buprenorphine or fentanyl are "synthetic opioids" is to say that you have to take some naturally occurring chemical and manipulate it via chemical reactions in order to change its structure into a form that has the properties you desire.
In the case of buprenorphine, you start with a chemical called thebaine, which is extracted from poppies, though not the same poppies that opium comes from. Thebaine is mainly produced in Australia, France, Spain, and Turkey. But thebaine on its own doesn't really do anything useful. In order to turn it into a useful chemical like Buprenorphine, you need to take it through an 8-step process that involves having it interact with methyl vinyl ketone, t-butylmagnesium chloride, cyanogen bromide, and at this point your eyes have probably glazed over if you didn't major in chemistry. Suffice to say that it's an involved procedure that requires a lot of often exotic inputs that are sourced from all over the world to turn poppy extract into buprenorphine.
But the production process doesn't end once you've got a batch of pure buprenorphine. Buprenorphine on its own is just an active ingredient. But wouldn't just ingest pure buprenorphine anymore than you would drink a pure vial of the Coca Cola secret formula. Just as you need to mix the chemical that gives Coke its flavor with sweeteners and carbonated water, the Buprenorphine active pharmaceutical ingredient needs to be combined with stabilizers and other active ingredients, like Naloxone, to create a finished product. This product isn't even necessarily going to be an injectable solution or a pill. Belbuca, a buprenorphine formulation used for pain as opposed to addiction, is administered via an oral patch that dissolves into the lining of the cheek. As with the production of the active ingredient, the manufacturing process of packaged medications intended for patients is also a globalized one, with production facilities in places like India and Ireland.
Tariffs probably won't make treatment much more expensive
So if the making of addiction treatment medications like buprenorphine is heavily globalized, why the assertion that Trump's tariffs are unlikely to meaningfully alter the costs of medication assisted treatment?
Simply put, it's because manufacturing is not where the cost of most of these medications comes from. If you take a look at the costs of the buprenorphine active pharmaceutical ingredient, the pure chemical before it's been packaged into a final product, it comes out to a cost of somewhere around $6,000-10,000 per kilo. That may seem like a lot until you consider that said kilo of buprenorphine can be used to make 125,000 tablets containing an 8 mg dose, meaning each pill contains less than 10 cents of buprenorphine.
This is the key differentiator between something like medication and homes, in the context of the impact of tariffs. In construction, materials compose somewhere between 30-40% of the total cost of a project, meaning tariff induced increases can meaningfully impact the overall cost of a project and hence its viability. By contrast, for most pharmaceuticals, the cost of the actual medicine part of a medication is essentially a rounding error. Rather, the main contributors to the costs of medications is all the research and testing required to take a new drug from idea on a whiteboard to FDA approved medication. These costs can range from hundreds of millions to billions of dollars, meaning if you wanted to recoup the research costs of developing some new buprenorphine medication by selling a kilo worth of 8mg pills, you'd need to charge $8,000 a pill (obviously the real price of these pills is far less because drug companies typically sell more than 125,000 pills, but it maybe be higher than one would expect based purely on research costs for that specific drug because that approved medication may also be paying for losses incurred from other failed projects).
But beyond research costs for the treatment medications themselves, there's also the costs of administering addiction treatment. Looking at Medicare payment rates for addiction treatment, the cost of the drugs themselves, the cost of medications are often eclipsed by the non-drug components, i.e. labor and administrative costs associated with treating addiction.
These are the places where Trump administration policies actually have the potential to worsen the addiction crisis by making treatment more expensive or scarcer. While about 14% of people living in the US are immigrants, for doctors, that number is closer to 20%. And in California, 35% of registered nurses are immigrants. So if the administration's crackdown on immigration and arbitrary deportation regime ends up forcing large numbers of foreign-born health care professionals out of the country while discouraging others from coming to America in the first place, there could be a full blown staffing crisis for addiction treatment programs.
Beyond staffing, there are also major threats to funding. Around 20% of addiction treatment spending comes from Medicaid, which the current Republican budget proposal is likely to cut to the bone, imperiling treatment for massive numbers of people.
It is often far too easy to let one's first impressions and preconceived notions guide one toward a conclusion. It would have been the simplest thing in the world to fire off a take about how Donald Trump's tariffs are threatening addiction recovery programs, a temptation made especially potent by the dramatic irony that a policy supposedly justified by concerns regarding smuggling of addictive drugs could worsen the addiction crisis. But it is important to actually make the effort to do the research and make sure one's thoughts are actually backed by evidence. It can sometimes feel like busywork when doing so feels like a box-checking exercise built around digging up sources. But there will be times, such as here, where the act of doing so overturns one's initial thesis, while also offering the potential for fruitful discoveries on how drug manufacturing works and where the costs.