- President Donald Trump said he will move forward with plans to impose tariffs on pharmaceuticals. While he hasn’t officially announced the exact plan, experts said the decision could lead to higher prices and shortages, especially for generic drugs.
- Drugmaker stocks dropped following Trump’s announcement, with pharmaceutical companies in the U.S. and Europe potentially facing significant financial impact.
- Experts warned that tariffs could increase the costs of generic and brand-name drugs, particularly those produced in countries like India and Europe.
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Are prescription drugs about to get more expensive? That’s the question Americans are asking after President Donald Trump doubled down on his plan for tariffs on pharmaceuticals.
“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,” Trump said Tuesday, April 8, at a House Republican fundraising gala. “So, we’re going to be announcing very shortly a major tariff on pharmaceuticals.”
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While the president did not say how high the tariff would be, earlier this year, Trump mentioned he would impose at least a 25% levy on pharmaceutical drugs.
What has happened so far?
On Wednesday, April 2, Trump introduced a sweeping 10% tariff on all imports into the U.S. His new reciprocal tariffs impose a 104% duty on goods arriving from China.
So far, Trump has spared the pharmaceutical industry from tariffs. However, drugmaker stocks worldwide fell on Wednesday, April 9, after Trump’s remarks.
According to premarket trading data reported by NBC News, shares of major U.S. drugmakers, including Pfizer, Merck and Eli Lilly, fell between 2% and 4%.
In Europe, several healthcare stocks fell by 5%, marking their lowest point since October 2022.
Currently, China, India and Europe produce a significant portion of drugs for the U.S. and are major contributors to the supply chain.
Will tariffs impact drug costs?
Experts have warned that tariffs on pharmaceuticals could result in shortages and higher prices for some drugs.
A Forbes report suggested that generic drug manufacturers may face the largest impact, as they represent approximately 90% of all prescriptions in the U.S.
India produces approximately 47% of all generic medications prescribed in the U.S., which currently face a 26% tariff.
Forbes reported that common heart medications cost less than $1 per pill, and if subjected to a tariff, manufacturers may reconsider their production value, ultimately harming consumers who depend on these low-cost alternatives.
Mark Cuban, co-founder of Cost Plus Drug Company, which manufactures and sells generic medications, told Forbes that patients would feel the impact of increased costs from tariffs.
“With only a 15% markup, we can’t absorb any additional costs,” Cuban said.
The tariffs would likely impact name-brand medications, particularly cancer immunotherapy drug Keytruda and weight loss medication Wegovy. Europe manufactures both drugs and currently faces a 20% tariff. For instance, if a patient’s insurance does not cover Wegovy, they might incur an additional $100 monthly if the manufacturer passes on the entire tariff cost.
Have pharmaceuticals ever been subjected to tariffs?
Tariffs on pharmaceuticals would violate a 1995 duty-free agreement that the U.S. signed with the World Trade Organization.
For years, most countries, including the U.S., imposed little to no tariffs on drugs to keep drug costs affordable.
