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By Kate Plummer
Senior US News Reporter
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Tariffs on pharmaceutical imports that President Donald Trump has said he will impose "very shortly" could cause the prices of drugs to increase, analysts have said.
Why It Matters
Since Trump became president, tariffs have been a major part of his policy offering, though he has paused many of those put in place, likely as a result of market uncertainty.
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What To Know
The U.S. imports many of its pharmaceuticals from abroad. It imported $213-billion-worth of medicines in 2024 with little to no import tax because of a 1995 World Trade Organization agreement.
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Only 28 percent of manufacturers of active pharmaceutical ingredients were in the U.S. as of August 2019, according to the U.S. Food and Drug Administration.
Speaking at a Republican fundraiser on Tuesday, Trump said he was primed to "very shortly" announce "a major tariff on pharmaceuticals."
He also told reported on Air Force One that these tariffs would come "at a level you haven't really seen before."
Trump believes tariffs will incentivize U.S. manufacturing, but if pharma tariffs are imposed, some analysts have suggested it will be difficult to set up companies in the U.S.
What People Are Saying
Robin Feldman, professor of law at UC Law San Francisco told Newsweek any price increase would fall on patients to cover**:** "Drug companies don't base prices on the cost of production. It's simply a matter of how much the market can bear. Thus, whether drug companies absorb any cost increases depends on what they think patients, health plans, and middle players will tolerate."
She added: "If there is an impact, you don't need a crystal ball to predict that the impact will fall primarily on patients, as well as on taxpayers who support the government health programs."
BMO Capital Markets analyst Evan Seigerman told Reuters: "While the details are scant, we are strongly opposed to tariffs on any pharmaceuticals—these will likely do little to shift manufacturing back to the U.S.
"Given the complexity of the pharma supply chain, we do not expect the industry to make any major changes.
"These current tariffs are being pursued under emergency powers, which at worse will last until the end of the current administration and could end sooner with an act of Congress."
Bernstein analyst Courtney Breen wrote in a note seen by Reuters that her worst-case scenario assumes tariffs could result in an extra $53 billion in costs paid for pharmaceutical imports.
Alex Schriver, senior vice president of public affairs of the Pharmaceutical Research and Manufacturers of America, said in a statement: "We share President Trump's goal of revitalizing American manufacturing. Nearly two-thirds of medicines taken by U.S. patients are produced here, and our industry contributes $1.7 trillion annually to the U.S. economy and supports millions of high-wage jobs.
"As the President pointed out… our members continue to expand their U.S. footprint, driven in part by tax policies President Trump put in place during his first term. We look forward to working with the administration on ways to ensure America remains the most attractive place in the world to discover and manufacture new treatments and cures."
What Happens Next
Trump's administration has not yet announced the details of his pharmaceutical tariff plans.
Meanwhile on Wednesday, amid days of market uncertainty, Trump announced he would pause most reciprocal tariffs he had imposed on global trading partners for 90 days and increase tariffs on China to 125 percent.
It is not known whether or not Trump will extend the 90-day pause on the other tariffs he has imposed, nor how the markets will react if so.
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