Over the past several years, the U.S. government has used tariffs to strengthen its pharmaceutical industry. These steps were meant to secure the supply at home and protect national interests. Still, people are now debating how they may influence drug availability, increase costs and influence the international pharma market.
Understanding the Tariff Landscape
All goods brought into the U.S. now face a 10% tariff, while Chinese APIs face up to 245% tariffs, and Canada and Mexico’s medical device imports are hit with a 25% tariff. Their purpose is to increase home production and decrease reliance on foreign supplies.
The complex process of setting up pharmaceutical manufacturing sites in the U.S. usually takes over a year. The wait causes people to be concerned about running out of medicines and facing temporarily expensive prices.
Potential Impacts on Drug Availability and Costs
Experts fear the tariffs might raise drug prices and contribute to existing shortages. Because they earn little, generic drug manufacturers might not be able to cover the extra costs and may end up pulling out of the market, shrinking the competition.
Erin Fox, PharmD, from the University of Utah Health, pointed out that many injectable medications come from a few suppliers. Setbacks in their supply chains might seriously influence how patients are cared for.
Ernst & Young projected that tariffs on drug ingredients might raise the cost of U.S. manufacturing by 4.1%, which could lead to $51 billion more in annual drug costs.
The Complexity of Domestic Manufacturing
Although the idea of an all-American pharma market is lofty, specialists say it might not be practical or advantageous. Paying attention to diversity in the supply chain helps deal with issues related to manufacturing, natural disasters, or geopolitical problems.
An American Society of Health-System Pharmacists representative pointed out that just producing things inside the United States doesn’t guarantee the chain will stay safe. The President asked for a broader policy, saying the U.S. has already faced drug shortages made in the country.
Conclusion
Even though tariffs try to support domestic drug production, they might cause short-term problems, affecting patients’ ability to get affordable medicines. Using a mix of in-house production and multiple foreign producers might help us avoid medication shortages.
