This is the list of generic drugs used by many people that may be affected in the U.S. due to new tariffs
Trump wants to bring manufacturing back to the US including pharmaceuticals by imposing tariffs. However, that tool could have adverse consequences.
Trump told reporters on Monday that in the “not too distant future” tariffs could hit pharmaceutical products coming into the country. Earlier in the day, his Department of Commerce filed a federal notice that it was beginning an investigation to determine if imports of medicines and ingredients threaten national security.
While the agency has 270 days to complete the probe, Secretary Howard Lutnick said the previous day that new levies would be announced in a month or two. Trump intends for more production of pharmaceuticals to move back to the United States, but tariffs may have the opposite effect for generic drugs, and at the same time increasing shortages and costs for consumers.
Tariffs could stall drug manufacturing in the US, increase reliance on China
Reliance on China for medicines and ingredients has been a concern for both Democratic and Republican lawmakers for some time. At least one stage of the manufacturing process for a majority of drugs takes place in China. That includes those made in India, the largest supplier of low-cost generics to the US, which typically relies on raw materials from facilities in China.
Evan Seigerman, a pharmaceuticals analyst with BMO Capital Markets, wrote in a recent research note that “given the complexity of the Pharma supply chain, we do not expect the industry to make any major changes,” reports CNN. In a statement, US spokesperson for the Indian Pharmaceutical Alliance Kathleen Jaeger said heavy tariffs could cause Indian companies to pause their investments in the US. She also warned that “they will trigger substantially more drug shortages, cause greater US dependence on China for life-saving medications.”
There are concerns from industry insiders that generic drug manufacturers won’t be able to recovered the added cost of importing the raw ingredients, causing them not to stop bring the products into the US. “And that could amplify the drug shortages concerns we have here in the United States,” said John Murphy III, CEO of the Association for Accessible Medicines, the trade group for generic and biosimilar medicine.
If multiple manufacturers pull their product out of the market, not only would pharmacies and hospitals have a challenge securing the necessary drugs, but prices could increase as well. This would be felt by a large swath of the US public.
Currently, over 90% of US drug prescriptions are dispensed as generic drugs according to a study. Over half the US population has at least two prescription drugs that they are taking and 70% on at least one.
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