President Donald Trump's proposed 100% tariffs on foreign pharmaceuticals will ultimately be paid by American patients and insurers, not foreign drug companies, according to economist Justin Wolfers.

He argues the administration’s theory that tariffs will force price cuts is flawed, especially for patented, brand-name drugs where there is no competition and demand is inelastic.

Economist Warns Of Higher Drug Costs For Consumers

Wolfers explained that for these unique medications, the economic leverage lies entirely with the manufacturer. “The administration’s theory of the case has always been American consumers have options, and they can go elsewhere,” he stated.

“You know, there’s exactly one class of goods where we don’t have options. It’s a drug that’s patented.” Because there are no alternatives, foreign companies can simply pass the full cost of the tariff onto the U.S. market.

“That’s the textbook case where buyers—American patients and insurers—eat the cost,” Wolfers noted in a social media post.

The Administration's theory: Foreign drug companies will cut prices if Americans can buy elsewhere.The flaw: For patented drugs, there's no competition and demand is inelastic. That's the textbook case where buyers—American ...