The pharmaceutical industry is bracing for chaos if President Trump follows through on his threat to impose “a major tariff” on prescription drug imports. \u00a0<\/p>\n
Tariffs would disrupt international supply chains<\/a>, force companies to decide whether to pass increased costs on to patients and exacerbate existing drug shortages.\u00a0<\/p>\n The administration wants more drug companies to onshore their manufacturing, but experts said such a process would take years, while the pain from tariffs could be much more immediate.\u00a0 \u00a0<\/p>\n \u201cWe\u2019re going to be announcing very shortly a major tariff on pharmaceuticals,\u201d Trump said Tuesday<\/a>, without elaborating on details. \u00a0<\/p>\n He said it is a \u201ctremendous problem\u201d that \u201cthe United States can no longer produce enough antibiotics to treat our sick.\u201d\u00a0<\/p>\n Trump on Wednesday announced a 90-day pause on most of his country-specific \u201creciprocal\u201d tariffs, but Treasury Secretary Scott Bessent said that would not apply to sector-specific tariffs such as pharmaceuticals. \u00a0<\/p>\n The administration is also keeping in place escalating tariffs on imports from China, which were raised to 145 percent on Wednesday. \u00a0<\/p>\n Trump indicated the pharmaceutical tariffs could range anywhere from 50 percent to 200 percent. \u00a0<\/p>\n Administration officials have indicated the mechanism for tariffs on pharmaceuticals would be different than the global and country-specific tariffs so far unveiled and then largely paused. \u00a0<\/p>\n For industry-specific tariffs, stakeholders and Wall Street analysts think the administration will simultaneously announce tariffs and launch an investigation into whether importing certain products presents a threat to national security.\u00a0<\/p>\n Experts and industry stakeholders have said if Trump follows through, the impact would be felt hardest on generics, which make up about 90 percent of the medicines prescribed in the country and many of which rely on ingredients made in China and India.\u00a0<\/p>\n \u201cOur concern is actually less about price increases because [of] the tariffs and more about generic manufacturers dropping out of the market,\u201d which would exacerbate existing shortages, said Tom Kraus, vice president of government relations for the American Society of Health-System Pharmacists (ASHP).\u00a0<\/p>\n Kraus said manufacturers of brand-name drugs have already started moving production back to the U.S. and are much better situated than generic makers to absorb the cost of tariffs because of their higher profit margins. \u00a0<\/p>\n \u201cIf [generic] costs go way up, they just don’t have a lot of flexibility to increase price,\u201d Kraus said. \u201cWhile that impacts the profitability of a branded drug, for a generic drug, if it pushes them over the line to no longer being profitable, they may just drop out of the market, and then we have a shortage.\u201d\u00a0<\/p>\n Drug shortages already pose significant problems in the country, and they have become more frequent and disruptive in recent years. Antimicrobials and sterile injectable drugs are among the most common shortfalls, according to ASHP data. \u00a0<\/p>\n For instance, sterile IV fluid used in hospitals has been in shortage for years, and it was made worse after Hurricane Helene flooded a manufacturing plant that makes about 60 percent of the IV fluid in the country. \u00a0<\/p>\n Patients will likely be hit hard no matter which drugs they take. \u00a0<\/p>\n \u201cWe use generics and spend on brands,\u201d Marta Wosi\u0144ska, a senior fellow at the Brookings Institution, wrote<\/a> in a paper last month. \u00a0<\/p>\n While brand-name drugs are not at the same risk of shortage, tariffs will likely set off a fight about whether to eat the cost increase or pass it on to patients. Rather than China, it would be tariffs from Europe that could hit branded drugs hardest.\u00a0<\/p>\n Executives of major pharmaceutical companies are calling on the administration not to move forward.\u00a0<\/p>\n \u201cWe still strongly believe that medicines should be exempted from any kind of tariffs because at the end it is just harming patients\u2019 health systems and restricting health equity,\u201d AstraZeneca chairman Michel Demar\u00e9 said during the company\u2019s annual shareholder meeting on Friday. \u00a0<\/p>\n