This is Bloomberg Law with June Grossel from Bloomberg Radio.
I'm announcing a historic action to rescue our nation's capital from crime, bloodshed, bedlam, and squalor and worse. This is Liberation Day in DC, and we're going to take our capital back. We're taking it back.
Even as official Washington DC Police data shows violent crime reached a thirty year low last year and is down twenty six percent this year, President Trump declared a public safety emergency today and invoked a never before used power in DC's Home Rule Act to take over its police department.
They love to spit in the face of the police. As the police are standing up there in uniform. They're standing and they're screaming at him an inch away from their face, and then they start spitting in their face. And I said, you tell them you spit and we hit, and they can hit real hard.
Trump is also sending eight hundred National Guard troops onto the streets of the nation's capital. My guest is George Derrick Musgrove, a professor of history at the University of Maryland, Baltimore County. Does the president have the power to do this?
The President actually has a tremendous amount of power under the Home Rule Act, and he's going to operate within that realm. So he's going to send out National Guard troops onto the streets of DC, as well as the
smattering of federal agents from other agencies. That's all within his legal purview under the Home Rule Act in nineteen seventy three, which gives the President control of the DC National Guard and in emergency situation allows him to take over the Metropolitan Police Department for up to thirty days.
Tell us a little bit more about the Home Rule.
So the Home Rule Act, which was fass in nineteen seventy three by Congress, gives the city a local government, the mayor, a thirteen member council, and a number of other local offices. And it does that for the first time in about one hundred years. And so the eighteen seventy four Congress ended local governance in the District of Columbia and initiated one century period where the President basically
ran the city through three appointed commissioners. That became an embarrassment after World War Two, and so Congress moved to slowly but surely returned certain elements of democracy to the district. The kind of the capstone of that process was for the Home Rule Act. What the president cannot do is simply wipe that law away. It was passed by Congress.
It has to be repealed or altered by Congress. But again within the purview of the law, the president actually has a significant amount of power over law enforcement the city,
and that was done intentionally by Congress. And so aside from his control of the National Guard and his ability to essentially bring the Metropolitan Police Department under his control, he also appoints the US Attorney who is the chief law enforcement officer in the district that we don't have district attorneys here in the nation's capital, and so the US Attorney prosecutes pretty much all adult crimes, all felonies.
And how long can he take over the DC Police Department.
He can do it for a period of up to thirty days. After that, the assumption is that any emergency that the President would need to take over the police department for would have passed. But he is capable of doing that. He was talked off the ledge of doing that back in twenty twenty during the Black Lives Matter
protests outside the White House. Again claims as he's doing now, that there was an emergency in the district and that he should take pretty radical measures in order to address that emergency, and so he very closely considered over the MPD.
Then he was dissuaded from doing so by local elected officials as well as some of his advisors, and instead he just deployed the National Guard and several other federal assets in order to clear Lafayette Park, which I think many people at the time in hindsight saw it as a pretty robust violation of the First Amendment right to the people protesting.
There are there any restrictions on the president's use of the National Guard.
There's not restrictions in the law. There are, however, larger problems with using the Guard in urban policing context. I mean, the Guard is not trained for urban policing. It's not even particularly well equipped for urban policing. And the other problem that he has, which he's really not addressing in any way, shape or form, is that the National Guard regularly collaborates with the Metropolitan Police Department pretty much on
every inauguration. Back in the late nineteen eighties and early nineteen nineties, the National Guard actually helped the police with crime suppression, because at that point, the DC did have a pretty robust crime crisis. But the National Guard, understanding its limitations and MPD understanding the problem of putting uniformed soldiers on the street, made sure that the National Guard during that period pretty much only did support the work, and MPD stuck with all the law enforcement work and
interacting with the public. And that's because all of those examples that I just gave, the National Guard was cooperating with local authorities. The federal authorities were coordinating with the mayor and with the council. What's unique about the deployment in twenty twenty, and also the one that he announced today, is that the White House is not just not coordinating with local authorities, but is actively seeking to undermine through its deployment of federal assets to the city.
Is this similar to Trump sending troops and the National Guard into Los Angeles and the legality of that is going to be decided at a trial this week.
Yes, I mean this is very similar, not just the
Los Angeles, but I would also argue New York. And so the President has pretty consistently not just during his first term and now and to his second but for much of his adult life attacks large democratic cities as crime ridden, as stilthy, and as a place that were he in charge of them, he would clean up with an iron fist, And that rhetoric has become more focused and more specific once he got into elected office, and so he's gone after those places once he got official power.
You can see this in Los Angeles with the Ice raid, where he's essentially going around the local government, creating a crisis and then sending in the National Guard to try and address that crisis. You can see this in New York, where he is really using the Justice Department in a criminal manner to get the mayor, Eric Adams in his pocket so that he can have relatively free reign in
the city. And the one place where he's already allowed to do this stuff without having to go around or budget the law is Washington, DC, because he already has a significant amount of power in the city, and so he appears to be planning to use at least a portion of that power.
So any ruling in the LA trial won't apply to DC.
Then, correct, The President has way more power in the federal District than he does pretty much anywhere else in the United States, and that's specifically enshrined in the Home Rule Act. But again, there is what's legal and there's what's right, and I think the President is towing the line at least when it comes to what's legal. He is not doing that when it comes to what's right.
This move apparently stems from a carjacking of a former Doege employee, and the President declared a public safety emergency. Is he the final word on whether they is an emergency?
Well, I mean, it wasn't even a carjacking. It was an alleged attempted carjacking that was actually stopped by an MPD officer. I mean, the whole reason we have a clear record of this is because an MPD officer saw the alleged crime taking place, intervened and probably saved mister Korustine from much horse beating and perhaps the loss of his property, which speaks to me to a relatively good
policing regime here in the city. But the answer to your question is, unfortunately no. The Home Rule Act, like most laws in this country, was written with the assumption that the person carrying them out in this case, the President, would be a gentleman and a statesman and wouldn't just lie to get their way. And so the Home Rule Act is written to say that if the President determines that there is an emergency, he is able to take
emergency control of a metropolitan police department. That leaves the determination with the president unfortunate, and so that's where we are.
Trump has also threatened that if Zoran Mandami wins the mayoral race in New York City, he's going to take over that city.
The president does, not, to my mind, have legal authority to take over an American city. DC is a unique case because it is the federal district. But that sounds like bluster and misdirections.
Me looking at history. Have any other presidents tried to do something similar in DC?
Yes, and no. There was a push primarily by Congress, not by the president, in the eighteen seventies district the district of democracy entirely, and that was successful, and so in eighteen seventy four Congress repealed all democracy in the district and then gave the power to the president to
administer it directly. There was also a pretty big push by the Nixon administration to campaign against the district in nineteen sixty eight as the quote unquote crime capital of the United States, and when he got into office, he put together a very robust anti crime package that DC residents roundly rejected. The difference between then and now, though, is that the district didn't have a home rule government in nineteen sixty nine when Nixon begins to implement these policies.
And the other is that there were liberals in Congress with power who were willing to push back against the president's initiatives. We don't have those circumstances now. If the president takes these powers, it is a violation at least of the spirit, if not the letter, of the law of home rule. And when it comes to Congress, you really don't have people in power in the Republican majority who have any intention of checking the president's whims when it comes to these situations.
But it does appear that what Trump is doing here is all legal.
Well, the only thing I'd underscore is that I think that we've become quite numb to the president many in various efforts to violate the rights of those Americans with whom he does not agree. So when he began speaking of federalizing the district, the question that many people asked was not should he do it? But can he do it? And I think it's important to not only ask can he do it, which unfortunately he can, but should he
do it? So to remind folks that this is not a violation of the law, but it is a violation of our principles, of our principles of no taxation without representation, of our principles of every citizen has a specific set of rights that other citizens shouldn't look to violate, and the President is violating those principles in a very robust and unfortunate manner.
Thanks for joining me on the show. Thanks so much for joining me on the show. That's George Derrick Musgrove, a professor of history at the University of Maryland, Baltimore County. Coming up next on the Bloomberg Law Show, Trump is threatening to impose tariffs of up to two hundred and fifty percent on pharmaceutical imports. What are the potential consequences. I'm June Grosso and you're listening to Bloomberg. President Trump is threatening to impose tariffs of up to two hundred
and fifty percent on pharmaceutical imports. He said there would be an initially small tariff, and then in a year or at most a year and a half, the tariffs will go up to one hundred and fifty percent and then up from there. It's not the first time that Trump has threatened to impose steep tariffs on pharma. Here he is at the National Republican Congressional Committee President's dinner in April.
We're going to tariff for our pharmaceuticals. And once we do that, they're going to come rushing back into our country because with a big market.
Trump wants more farmer companies to manufacture their drugs in the United States. Joining me is healthcare attorney Harry Nelson of Leech Tishman Nelson Hardiman. Harry start by telling us about these threatened tariffs on drugs.
President Trump is threatening these tariffs up to two hundred and fifty percent on pharmaceutical tariffs. He's using this Section two point thirty two right to claim a national security interest under the theories that the shrinkage in US production of drugs is a national security risk and that these tariffs will sort of force drug companies to build infrastructure in the United States to ensure access to the drug supply and prevent disruption. So that's the theory behind this plan.
But in the short term, he's planning to, you know, essentially significantly increase the price of all imported drugs to create the incentive to make that happen.
Why do you think he's targeting pharmaceuticals in particular.
I think the pharmaceutical industry is first of all, it's just a massive part of our overall economy. But I also think this is a way to get attention. And I think we've had a history, even from President Trump's first administration, where drug prices were seen as a threat, something that upsets consumers. And I think ultimately, even though people ultimately need American consumers need medications, they're kind of an easy target to pick on from a popularity standpoint.
Trump wants more FORMA companies to manufacture their drugs in the US, but already three companies, Johnson and Johnson, Astrazenica, and Eli Lilly said they would spend fifty five billion, fifty billion, and twenty seven billion, respectively on expanding drug manufacturing here.
Yeah, say pharmaceuticals that you're mentioning, you know, which are already essentially global companies. They're all responding that they want to increase the production capacity in the United States at the same time that they're threatening that this is going to really hurt patients, urt healthcare providers access to medication,
and really hurt R and D research and development. But they are responding and trying to, you know, to give a signal that they're prepared to ramp up their US based production.
I mean, will this increase the cost of pharmaceuticals to consumers if he puts these tariffs on absolutely.
First of all, we should say, even before he does anything specific, we're already looking at, you know, a different teriffs of aning on what part of the world you're talking about. But we already have EU tariffs at fifteen percent, India twenty five percent. I think China's at ten percent, So there already is you know, a lower level tariffs that are but obviously we're talking about potentially increasing these
as much as twenty five times. So either American consumers are already paying the price increases or the drug manufacturers are containing you know these and just taking a hit on their bottom line. But this is obviously a dramatic going from ten to fifteen percent to two hundred and fifty percent. It's pretty radical.
He said, other nations make a fortune on pharmaceuticals, citing drugs imported from China and Ireland. Is that true? And don't pharmaceutical companies in the US make a fortune as well?
Yeah? Obviously, like there are a lot of US companies making a lot of money on drug It's interesting that reference to Ireland is super interesting. Ireland is, among other things, notably producing some of the GLP one weight loss drugs that are just surging in demand. You know, some of glue tides, there's eppetide, and so you know, when we talk about China and India, we're talking much more about the generics. And so the reality is like our drug
supply is fairly multinational between Europe and Asia. Yes, these countries are producing a lot of the drugs and inherently making profits that come from those drugs. But it's not like we don't have any US manufacturing. It's just a question of how much of what the alocation is today and what he wants it to be.
Has he said what he wants it to be, It sounds like he.
Wants it to be something like one hundred percent of the US or ninety ten. But it's interesting question. I haven't seen exact data, but I think it's spared to say that the majority of drugs that Americans are consuming are imported. Depending on how you measure, you know, whether you're measuring revenue or actual production, the percentage is going to be different. But it definitely is the case that
we have more foreign sources. He's certainly trying to reverse that and make make sure that the overwhelming majority of drugs are coming from US production.
On July thirty first, he sent letters to seventeen drug companies urging them to lower drug prices. US drug prices by September twenty ninth to most favored nation amounts paid by other nations. What does that mean?
Most favored nation is just a reference to essentially, whatever the best pricing that a particular company is offering in the marketplace it has to offer to the United States. So this has been a particular Again, this is a theme that went back to the first Trump administration, which is that America essentially props up the pharmaceuticals by paying higher prices for drugs. We know that Medicare, for example, has limitations that prohibit the Medicare program, the US government
from negotiating with drug manufacturers over certain prices. We saw legislation and the Biden administration to begin to allow negotiations on some drugs. But the point here is that most favorite nation and status would mean that the US would not be subsidizing drug costs drug development costs for the rest of the world and allowing them to take much cheaper costs while Americans and insurance companies absorbed all those additional expenses.
Will you explain a little more detail how the US is subsidizing the development costs for other countries.
Right what's happening, essentially is that because we have certain government programs, most notably in Medicare, that are locked into paying certain very high costs for drug companies and not being able to negotiate. And if you think about their purchasing power, you know, the Medicare program is without question
the single largest purchaser of drugs. So I think since the data is that you know, in many cases, particularly on brand name prescription drugs, the US and the Medicare program is paying two and a half to three times higher than other advanced industrialized countries, and so in many cases, basically two hundred and fifty percent over foreign drug prices. It might be that that two hundred and fifty percent tariff that President Trump is referencing was based on that
data point alone. And you know, the argument that the drug companies make is that are paying these higher prices here in America helps sustain their innovation, their drug development, helping you know, patients around the world who can't afford it. But the reality is, when you look at other advanced industrialized countries, including you know, the European Union for example,
there's no explanation why we should be bearing that higher burden. Essentially, you know, the argument is that when we pay for drugs with public funded research in the US as well, that we're essentially paying the burden once you know, in terms of our tax level, and then another time at the pharmacy. It's an effort to rebalance. I think the.
Real solution would be to change the medicare laws.
That would be one huge piece of the puzzle, allowing
the government to negotiate for fair pricing. I think another just another data point here is that supposedly, I think the number is seventy five percent of global drug company profits come from their US sales, so you can imagine there's a lot of room to negotiate pricing downward where the drug companies can still do just find and make a reasonable return on their investments from the Medicare program without us having to carry, you know, their entire profitability
and worry about their shareholders. So it seems like a rational move to allow the Medicare program and other large governmental programs to negotiate like anybody else in the marketplace over what the fair price is. But you know, the drug companies have lobbied to prevent that from happening for a long time now.
So I was going to ask you why they can't negotiate, and I guess it was the lobbying by the drug companies that stops that.
Yeah, the drug companies are certainly one of the most
powerful groups. They've had bipartisan support, and you know, they've used the amazing advances that we've made in pharmaceutical research and innovation and particularly getting cutting edge drugs, life saving, really game changing drugs on many medications into the market to fund massive amounts of hundreds of millions of dollars of lobbying Congress to support them, and we have not yet seen a real turn, you know, on the part of Congress, And one of the really interesting questions will
be how far you know President Trump may be able to change that.
Drug companies have said that tariffs might disrupt international supply chains. Is there a possibility that if tariffs are imposed, people will not be able to get the drugs that they need.
Well, I mean, I think the question is going to be who's going to bear the burden of these if prices increase when we say two hundred and fifty percent, we're basically seeing increasing prices twenty five times. So obviously, if you're a hospital, for example, and you need to buy injectable drugs to have the inventory for when patients need particular drugs or cancer drugs, you know, the question
is who's going to pick up that cost? If an injectable drug went from costing twenty dollars today to all of a sudden five hundred dollars proper single file or whatever, you know, just patient, that's a dramatic problem. And you can imagine that budgets from hospital reimbursement from insurance companies are going to limit uptake and it's going to take time to build new facilities in the US not subjects
to the shriffs. That might take years, and so in the meantime, you can imagine that there's going to be a point where certain drugs just won't be available certain hospitals and in certain parts of the US.
I mean, we should point out that the White House previously pledged to impose steep tariffs on pharmaceuticals and later backed off, so this could just be floating this look.
I think certainly President Trump got everyone's attention in terms, you know, and that's been the pattern. We hear extreme numbers as part of a negotiating position, and then ultimately negotiated settlements for lower numbers when there's outcry from the industry from voters. And I do expect that we will see some smaller tariff, probably more in the zone of ten to twenty twenty five percent, applied to select products, and I think probably some exemptions for drug with critical
shortages in terms of supplies. I don't think the administration is looking to trigger shortages and lawsuits and to antagonize seniors, particularly because so many medications for chronic conditions are really an issue for seniors, which is why Medicare is such a big so I do think we're going to end up with something much narrower. But this is a very effective way to put pressure and get attention on this issue, even if it's creating a little bit of anxiety for many of us along the way.
Harry, just how concerning do you find these threats of potential tariffs on drugs?
Whether you're a patient or on the provider's side. It should be paying close attention to this issue. But there's still I think a lot of game left to be played on it. I mean, I think the question is going to be who's going to bear the burden of these if prices increase. When we say two hundred and fifty percent, we're basically saying increasing prices twenty five times.
So obviously, if you're a hospital, for example, and you need to buy injectable drugs to have the inventory for when patients need particular drugs or cancer drugs, you know, the question is who's going to pick up that cost? If an injectable drug went from costing twenty dollars today to all of a sudden five hundred dollars, that's a
dramatic problem. And you can imagine that budge it from hospital reimbursement from insurance companies are going to limit uptake, and it's going to take time to build new facilities in the US not subjects to the sheriffs. That might take years, and so in the meantime, you can imagine that there's gonna be a point where certain drugs just won't be available at certain hospitals and in certain parts of the US.
You're going to stay with me, Harry. Coming up next on the Bloomberg Law Show, I'll continue this conversation with healthcare attorney Harry Nelson. Will turn to Health and Human Services Secretary Robert F. Kennedy Junior and the latest in his anti vaccine campaign. I'm June Grosso and you're listening to Bloomberg. Let's turn now to Robert F. Kennedy Junior, the Secretary of Health and Human Services.
For years, wherepublicans and Democrats have been talking about how to reorganize the healthcare system, whether it should be private insurance but a single payer, or a public private hybrid. All of those ideas are like moving deck chairs around on the Titanic. The ship is going down.
That was Kennedy talking to a bipartisan group of governors in Colorado springs at the end of last month. Last week, Kennedy said that HHS was going to pull nearly five hundred million dollars worth of contracts with universities, drug companies, and other labs working on new mRNA vaccines. Kennedy said the funds would be shifted toward quote safer, broader vaccine platforms. I've been talking to healthcare attorney Harry Nelson of Leech Tishman Nelson Hardiman. What's the impact of this.
Yeah, that activity on vaccines is on the targeting by this administration is potentially very disruptive. A lot of it will depend on what we see in terms of any future you know, spread of viruses. You know, I think this is the is really potentially limiting supply on some of the seasonal drugs. You know. The real question is
like what's going to happen with the latest variance. You know, COVID is still continuing to what's called mutate every season along with all the influenza vaccines, and so I do think this is a kind of a high risk move and there could be significant backlash if there is some kind of an outbreak or a particularly harsh season, But you know, until that happens, it doesn't seem like there's public outcry quite yet, and I think it will sort of depend on how things actually develop on a public
health lovel He.
Said the vaccines quote failed to protect effectively against upper respiratory infections like COVID and flu. What is he basing that on? Is that true?
I mean, I think there is still some divide among researchers about how effective the mRNA vaccines are. I'm not quite sure. I think it's clear that he's putting his thumb on the scale, you know, on an issue where there is some divide among public health experts and then the infectious to these community and the time is going to bear out whether we have the level of preparedness that we need, you know, for the next major problem
on this front. But it's a little bit scary to see just sort of the political choices that seem to be, you know, driving us rather than any scientific evidence based decision making.
Correct me if I'm wrong with the mrn A vaccine was the reason why they were able to fight COVID so fast, right, the operation warp speed.
Yeah, absolutely, the mRNA vaccines that we were able to develop really allowed for a massive acceleration so that we had vaccines in the marketplace by early twenty twenty one already, you know, basically less than a year after the global spread of COVID nineteen. And I think that it's clearly is the fastest adaptable platform for new viral threats. So scrapping that investment is not putting us in a good
position for preparedness. It's certainly not giving us, the United States, a lead on being able to respond to the next threat that we face. And I think we're gonna see how it plays out. You know, hopefully we won't see some kind of tragic disaster that where we're caught flat footed by this rollback.
But I time will tell you know, he's a vaccine denier or a vaccine skeptic. What else has he done to inhibit vaccinations.
There's also been a lot of policy shifting on, for example, moving away from vaccine recommendations for children, for pregnant women. There has been a kind of a halt to other kinds of god government preparation. So it's there's been quite a bit of other activity by RFK and by his team, obviously internally massive restructuring, so a lot of the personnel who were responsible for public health emergency response on this
front are no longer in their jobs. We've seen it appears that some of the messaging and the public marketing campaigns for people to get vaccinated are being cut. He eliminated public comment on policy, and so it's a lot of like internal administrative things happening within the Department of Health and Human Services that are really you know, sort of silencing in many ways the vaccine advocacy coming from within the federal government.
And has he also ended other kinds of grants for research projects.
Yeah, absolutely, that's been well, not only Kennedy, but some of it is happening, you know, within for example, National Institutes of Health. But we've seen just massive cuts affecting most large research universities. The Health and Human Services grant cuts are I haven't seen the latest target, but I have heard from multiple researchers at large academic medical centers
this is it's hitting every center. Grants canceled, you know, labs shuttered, and just a whole range of cuts that are likely to have some significant impact on public health research and on all kinds of drug related projects and.
I understand that there was a commission, a bipartisan commission that Warren Congress in April that China has already pulled ahead of the US and some key life sciences area. I mean, is talent starting to leave the US because the funding isn't here anymore.
There's been a lot of talk about whether, you know, we are taking a backseat to China. I haven't seen data about most US researchers heading to China, so but there is there's no question that we are essentially seeding
a lot of leadership here to to China. And you know, just whether it's it's researchers actually migrating, which I'm skeptical how much you know researchers will be excited to move to China, or just you know, the relative significant funding that's continuing in China with broadcuts here having more of an impact.
Kennedy also going to target the Federal Vaccine Court, which I think most people have never heard of.
Yeah, I mean that that's on his list. I don't think there's a single part of the vaccine infrastructures that he's not directly targeting in one way or another as part of his Make America Healthy Again campaign.
So he did promise not to during his confirmation hearings. Thanks so much, Harry. That's healthcare attorney Harry Nelson of Leach Toishman Nelson Hardiman. And that's it for this edition of The Bloomberg Law Show. Remember you can always get the latest legal news on our Bloomberg Law podcasts. You can find them on Apple Podcasts, Spotify, and at www dot Bloomberg dot com slash podcast Slash Law, And remember to tune into The Bloomberg Law Show every weeknight at
ten pm Wall Street Time. I'm June Grosso and you're listening to Bloomberg