Americans are haunted by one question after President Donald Trump said he would be announcing major tariffs on the pharma sector: will medicines get costlier in the US? Trump made the remarks while addressing a fundraising gala for House Republicans on Tuesday, April 8.
President Trump said pharmaceuticals, drugs and other things are going to get better. “They are made in other countries and you pay a number. I mean, the same package in our country, compared to London and other places, is sometimes 10 times more. Something that sells for $88 in London sells for $1,300 here, made in the same factory, by the same company. And that's over. I told them all that's over,” he said.
Trump noted that other countries tend to place restrictions on prices, which the pharmaceutical companies agree to, and then sell off their drugs for cheaper in those markets. He added that once the tariffs are imposed on pharmaceutical companies, they are “going to come rushing back” into the US. “Because we're the big market, the advantage we have over everybody is that we're the big market,” he said.
Will medicines get costlier in the US?
It is unclear how pharmaceutical companies are going to respond to the tariffs, and whether tariffs would increase the prices of generic drugs in the US, according to Forbes. However, researchers from the University of Toronto, the Hertie School in Berlin and the University of Pittsburgh found in a recent analysis that $3 billion of pharmaceuticals sold in the United States rely on Canadian manufacturing. Therefore, tariffs on pharmaceuticals could add $750 million in costs.
{{/usCountry}}It is unclear how pharmaceutical companies are going to respond to the tariffs, and whether tariffs would increase the prices of generic drugs in the US, according to Forbes. However, researchers from the University of Toronto, the Hertie School in Berlin and the University of Pittsburgh found in a recent analysis that $3 billion of pharmaceuticals sold in the United States rely on Canadian manufacturing. Therefore, tariffs on pharmaceuticals could add $750 million in costs.
{{/usCountry}}The researchers noted that extending tariffs to other exporters like China, India and Europe would likely “worsen the predicted effects,” including healthcare costs and disrupt drug supplies. Diederik Stadig, a healthcare analyst at ING, found an estimate, saying tariffs on all pharmaceutical imports to the US is likely to increase the price for low-cost, generic drugs by up to $0.12 per pill, or an additional cost of about $42 per year. Prices of drugs that are costlier, including those used in cancer treatment, could rise by up to $10,000, Stadig added.
The US relies a lot on European Union countries for pharmaceutical imports. Per estimates from Stadig, 20% of imports come from Ireland, 10.7% from Germany and 8.5% from Switzerland. A portion of pharmaceutical imports is also supplied by India (6.2%), Singapore (5.6%) and Japan (3.7%).