A new report commissioned by the pharmaceutical industry suggests that a 25% tariff on imported pharmaceuticals could increase US drug costs by nearly $51 billion annually, boosting prices by up to 12.9%. The analysis, conducted by Ernst & Young, found that the US imports $203 billion worth of pharmaceutical products each year, with 73% coming from Europe.
The report was commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA), which has argued that tariffs would undermine efforts to boost domestic manufacturing. However, President Trump has repeatedly threatened a 25% tariff on pharmaceutical imports, citing national security concerns over reliance on foreign drug production.
If implemented, the tariffs could have significant economic implications for US companies and consumers. The report estimates that wholesale distributors paying the tariff could pass higher prices through to consumers, leading to a 12.9% increase in US drug prices.
The industry is also concerned about the potential impact of tariffs on exports. Approximately 30% of pharmaceutical imports are ingredients used in US manufacturing, which could raise domestic production costs by 4.1%. The report warned that this could weaken foreign demand for US medicines and put jobs at risk.
The Trump administration has already launched an investigation into pharmaceutical imports, with a 21-day public comment period set to expire soon. Industry experts say the probe offers a chance for companies to show the administration that high tariffs would hinder their efforts to ramp up domestic production.
Source: https://www.nbcnews.com/business/business-news/pharma-tariffs-raise-us-drug-costs-51-billion-annually-report-finds-rcna202988