President Trump implemented a raft of tariffs this week. All imports are subject to a 10% import duty. Those from China are subject to a 145% tariff.

Pharmaceuticals appear to be exempt from the tariffs — for now. Drug manufacturers expect to get hit with tariffs at some point; they're just not sure when. "We'll be announcing pharmaceuticals at some point in the not too distant [future]," Trump said in late March.

It's hard to see how tariffs on drugs will benefit Americans. Tariffs are just another name for taxes, after all. When government taxes something, the economy gets less of it.

In the case of pharmaceuticals, aggressive import duties will end up restricting the supply of life-saving medicines, raising prices for consumers, and discouraging future medical innovation.

To understand how, consider the degree to which our pharmaceutical supply chain depends on medicines and ingredients sourced from abroad — particularly from the European Union. In a recent industry survey, almost 90% of biotech firms said that they use imported components in at least half of their federally approved products.

If the prices of those components increase by 25% or more, then manufacturing costs for a wide range of state-of-the-art medicines will soar.

Drugmakers will pass these costs on to patients and insurers in the form of higher prices. At the margin, increasing numbers of Americans will stop taking their medications as prescribed. And that could put their health at risk.

This is no minor problem. By one estimate, non-adherence to prescription drug regimens is behind 100,000 preventable deaths each year and costs $100 billion.

Those numbers will almost certainly grow if pharmaceutical tariffs take effect.

In some cases, drug manufacturers might decide to make less of a particular medicine than they otherwise would in order to keep costs down. This, in turn, could lead to widespread prescription drug shortages — at a time when the number of drug shortages is already near record highs throughout the country.

Over the long term, Americans can expect to see a dramatic slowdown in medical innovation as a result of the tariffs.

By increasing the cost of manufacturing medicines, the tariffs will take money away that could have been spent on research and development. Already, it takes an average of $2.6 billion to create and secure regulatory approval for a new drug. Tariffs will redirect money that could have gone toward the next therapy, cure, or vaccine to the federal treasury.

The tariffs will also create new logistical and regulatory impediments to innovation. That same industry survey found that half of biotech firms would need to "rework or potentially delay" regulatory filings for new medicines in response to the tariffs.

The end result of all of this will be fewer breakthrough treatments.

The Trump administration may not intend to undermine the health of American patients with tariffs. Their chief purpose is to pressure drug companies to manufacture their wares here in the United States.

And there's certainly merit to reducing our reliance on potentially hostile nations for the inputs needed to make key goods like drugs.

But that kind of massive transition to domestic pharmaceutical manufacturing can't be achieved overnight. In fact, 80% of biotech firms believe it will take at least a year to replace their European supplier. More than 4 in 10 predict it will take two or more years.

It can take 15 years to build new production facilities stateside, as former Congressional Budget Office director Doug Holtz-Eakin has pointed out. Permitting is a lengthy process. And the United States does not currently have enough workers with the skills needed to engage in high-tech pharmaceutical manufacturing.

Pharmaceutical tariffs will raise drug prices, unleash shortages, and drive down investment in research and development overnight. Ramping up America's pharmaceutical manufacturing capacity is a worthy public policy goal. There are far less disruptive ways than tariffs to achieve that goal.

Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The World's Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It (Encounter 2025). Follow her on X @sallypipes. Read Sally Pipes' Reports — More Here.