For many months, the prospect of President Trump imposing significant tariffs on imported medications has caused considerable apprehension. Patients across America worried about potential increases in drug prices and possible shortages of crucial medicines.
While the full details of the drug tariffs President Trump unveiled on Thursday night are still emerging, here’s a breakdown of what we understand right now.
Will Your Medications Be Affected by These New Tariffs?
Good news for most: the vast majority of prescription drugs used by Americans will not be subject to these new tariffs.
In fact, a Trump administration official confirmed on Friday that older, more affordable generic drugs, which make up roughly 90 percent of all prescriptions in the U.S., will remain tariff-free.
What if You Rely on a Brand-Name Medication?
If your brand-name prescription drug is manufactured in the European Union – a common source for many popular medications – it might soon see a tariff of up to 15 percent. The exact implementation date for this particular tariff is still unknown, but it could impact several widely used brand-name drugs.
For brand-name drugs manufactured right here in the United States, which is the second-largest hub for such production, these tariffs are not expected to have any impact.
However, if your drug is produced in specific other countries, it faces the possibility of a substantial 100 percent tariff. Nations like Switzerland, Britain, Singapore, India, China, Canada, and Mexico are among those where vulnerable drug manufacturing might occur. It’s worth noting, though, that these countries contribute a relatively small portion of the brand-name drugs consumed by Americans.
Even if your medication originates from one of these regions, it doesn’t automatically mean a tariff will apply. Pharmaceutical companies might be able to circumvent these tariffs for products still manufactured abroad by demonstrating to the Trump administration their intent to relocate a portion of that production to new facilities being established in the United States.
To illustrate, imagine a company currently producing your heart medication in Ireland. If they are simultaneously constructing a new manufacturing plant in North Carolina to produce the same drug, then that specific medication might be exempt from the new tariffs.
Could Your Drug’s Price Increase?
These tariffs could lead to moderate price hikes for some brand-name drugs. Industry experts express greater concern about price increases for specialized ‘niche’ products from smaller pharmaceutical firms, rather than significant jumps for the industry’s top-selling blockbuster drugs.
For certain Americans, this could translate to higher out-of-pocket expenses, particularly for patients whose insurance plans involve deductibles or require them to pay a percentage of their medication’s cost.
Nonetheless, in many instances, existing contractual obligations and the risk of substantial financial penalties might prevent manufacturers affected by these tariffs from drastically increasing prices.
Will Access to Your Medications Be Affected?
Experts highlight a potential for supply chain disruptions, especially for specialized brand-name products from smaller pharmaceutical companies. These smaller firms might not have the resources to shift production to the U.S. If a small company is suddenly faced with a 100 percent tariff, they could opt to withdraw from the U.S. market or sell off that product line. For patent-protected brand-name drugs, this can be particularly problematic as there are no immediate generic alternatives from competitors.
However, there is less concern about shortages of widely used, popular brand-name drugs. Even if their manufacturers temporarily incur high tariffs, these companies often have substantial profit margins, providing a strong incentive to ensure their essential products remain available to patients.
How Can You Determine Your Drug’s Origin?
The packaging of your medication might indicate where a crucial step of its manufacturing process occurred. The federal government provides a convenient online search tool that can help you find this information.
However, this packaging information can sometimes be incomplete. It might only list the location of a company’s corporate offices, or simply state ‘Made in India’ without specifying which particular stage of manufacturing took place there. Crucially, the label typically does not disclose the origin of the raw materials used in the drug’s production.
For more detailed insights, you can consult Food and Drug Administration documents available online. These records often specify the facilities involved in a drug’s production, particularly during its approval stages. Be aware, however, that these files can be complex and challenging to navigate.