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Donald Trump’s plan to introduce ‘major’ tariffs on prescription drugs is sending shockwaves through the industry.
Earlier this week, the president claimed it was unfair the US has to pay higher prices than other wealthy nations for brand name drugs.
‘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,’ he said Tuesday.
Trump claimed it was a ‘tremendous problem’ that ‘the United States can no longer produce enough antibiotics to treat our sick.’
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Like most generic drugs prescribed in the US, antibiotics are largely made in countries like China and India. Common antibiotics like amoxicillin have also fallen victim to shortages in the US.
According to the FDA, 28 percent of pharmaceutical ingredient manufacturers were in the US as of 2019, the latest data available.
In comparison, 26 percent are situated in the European Union, 19 percent in India, 13 percent in China, and the remaining 14 percent spread across other countries.
It’s unclear what size the tariffs would be or when they would be implemented.
Experts have warned that while tariffs would incentivize American manufacturing, they could also drive up over-the-counter and prescription drug costs in the short term as companies onshore their supply chains.
President Donald Trump said this week he could call for tariffs on prescription drugs to bring manufacturing back to the US
Ernie Tedeschi, director of economics at The Budget Lab at Yale, told ABC News any added costs would likely be passed on to the consumer.
He estimated, based on an assessment from The Budget Lab, ‘costs for prescription drugs would rise by an average of around $600 per year per household in the United States.’
This would tack on to the average $4,200 the average American household paid for prescription drugs in 2024.
Though he also noted much of that added cost could fall to insurance companies, it could result in higher premiums.
Dr Erin Fox, associate chief pharmacy officer at University of Utah Health who tracks drug shortages, also told ABC News tariffs could worsen already existing shortages of medications like lidocaine, an injection used to numb pain.
However, medicines people take every day in pill form are less likely to be impacted because there are several suppliers of those products.
She said: ‘An injectable product might only have two or three [suppliers] max.’
In addition to higher costs, tariffs may make it more difficult for consumers to get their medications quickly if shortages occur.
The American Hospital Association, a lobbying group, also warned of shortages of devices like syringes and blood pressure cuffs, many of which are sourced from China.
This would make it more difficult to perform lifesaving surgeries.
Experts warned tariffs on prescriptions may lead to shortages and higher costs (stock image)
Trump has also raised national security concerns about America’s dependence on overseas prescription drug production, as well as the quality and safety of foreign-made drugs.
In the weeks leading up to the tariff threats, pharmaceutical giants have moved to shift their production to American plants.
Eli Lilly and Johnson & Johnson, for example, announced plans to build new US manufacturing plants.
Sources also told Reuters drugmakers have tried lobbying Trump to phase tariffs in gradually to reduce the impact of the changes.
Some companies have also send more medications by air from Europe to the US to stockpile them ahead of tariffs.
Alex Schriver, senior vice president of public affairs of the Pharmaceutical Research and Manufacturers of America, said in a statement: ‘We share President Trump’s goal of revitalizing American manufacturing.
‘Nearly two-thirds of medicines taken by US patients are produced here, and our industry contributes $1.7 trillion annually to the US economy and supports millions of high-wage jobs.
‘As the President pointed out… our members continue to expand their US footprint, driven in part by tax policies President Trump put in place during his first term.
‘We look forward to working with the administration on ways to ensure America remains the most attractive place in the world to discover and manufacture new treatments and cures.’