Industry groups warn that President Donald Trump's steep tariffs on Canada, Mexico, and China could worsen drug shortages in the U.S., increase healthcare costs, and put financial strain on generic drugmakers.
Trump announced Saturday that his administration will impose a 25% tariff on nearly all goods from Canada and Mexico and 10% from China.
Mexican President Claudia Sheinbaum on Monday said the U.S. agreed to delay the tariffs on Mexico for one month after the country pledged to increase border security. Trump has said the tariffs will remain in place until the three countries take action to stop the flow of fentanyl and undocumented immigrants into the U.S.
The tariffs come as the U.S. faces a growing shortage of critical medications, including injectable cancer treatments and other generic drugs. Patients and hospitals have increasingly struggled with access to affordable prescriptions, and industry groups say the new trade measures will worsen the situation.
The U.S. depends heavily on foreign drug imports, with generic drugs accounting for 90% of prescriptions.
China is a key supplier of active pharmaceutical ingredients used in generic and brand-name medications. Some generic drugs are manufactured entirely overseas.
John Murphy, CEO of the Association for Accessible Medicines, said Sunday that the tariffs could "increase already problematic drug shortages" by pushing generic manufacturers out of the market due to thin profit margins.
"Generic manufacturers simply can't absorb new costs," Murphy said. "Our manufacturers sell at an extremely low price, sometimes at a loss, and are increasingly forced to exit markets where they are underwater."
Murphy urged the Trump administration to exempt generic pharmaceutical products from the tariffs, citing a $6.4 billion decline in the total value of generic drug sales over the past five years despite increased demand and product launches.
The Healthcare Distribution Alliance, representing 40 drug distributors, also called on the administration to reconsider its decision. The group warned Sunday that tariffs would put added financial pressure on the industry, leading to higher consumer costs and a worsening drug supply crisis.
"The U.S. will likely see 'new and worsened shortages of important medications,' and those costs will be 'passed down to payers and patients, including those in the Medicare and Medicaid programs,'" the Healthcare Distribution Alliance said.
A report from The Budget Lab at Yale University estimates that long-term pharmaceutical prices in the U.S. will rise 1.1% due to shifts in the supply chain caused by the tariffs.
Pharmaceutical Research and Manufacturers of America, an industry lobbying group, said it supports strengthening U.S. biopharmaceutical manufacturing but urges trade measures that focus on "addressing unfair practices abroad and safeguarding our intellectual property."
Medical device manufacturers, such as Intuitive Surgical, are also raising concerns. Many key components and finished products, including surgical instruments and imaging equipment, are sourced from countries such as China, Mexico, and India.
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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