U.S. drugmakers raise alarm over Trump pharma tariffs, warning of rising costs, supply chain issues, and threats to access, R&D, and affordable generics.
The Trump administration has renewed its push to impose tariffs on pharmaceutical imports, a move that has triggered serious concerns across the U.S. biotech and pharma industries. At a recent cabinet meeting, former President Donald Trump reiterated his intent to roll out 25% or higher tariffs on pharmaceutical products, citing the need to strengthen domestic manufacturing and reduce dependency on foreign suppliers.
While the goal may be to boost U.S. production, industry leaders believe that these proposed Trump pharma tariffs could have unintended consequences—ranging from higher manufacturing costs to reduced access to affordable medicines, especially generic drugs. The tariff threat comes at a time when the U.S. imports over $210 billion worth of medicines annually, with major dependencies on China, India, the EU, and Canada.
Industry Reacts: A Growing Wave of Concern
The pharmaceutical industry isn’t sitting quietly. A recent survey conducted by the Biotechnology Innovation Organization (BIO) in February reveals the extent of concern regarding Trump pharma tariffs. The survey covered a broad range of drugmakers, from early-stage biotech startups to large, established companies generating over $1 billion in annual revenue.
According to the survey, nearly 90% of U.S.-based biotech firms rely on imported raw materials and components for at least half of their FDA-approved products. This includes ingredients, chemical intermediates, packaging materials, and specialized equipment—all of which are now potentially subject to additional tariffs.
The numbers speak volumes. Around 94% of companies said tariffs on European imports would significantly increase their manufacturing costs. Tariffs on Canada were expected to hurt 82% of respondents, while 70% raised concerns about rising costs from China-related duties. Even India, which is one of the largest suppliers of generic medicines and active pharmaceutical ingredients (APIs), was flagged as a concern, with 56% of companies expecting cost increases from India-specific tariffs.
What Worries Pharma the Most
The survey didn’t just reflect cost-related concerns. A large number of companies highlighted how Trump pharma tariffs could disrupt nearly every stage of drug development and delivery.
Half the respondents said European tariffs would force them to rethink or even replace existing R&D and manufacturing partnerships. Many noted that these changes could delay or complicate regulatory filings in overseas markets. There was also a clear fear that tariffs would introduce new layers of red tape when dealing with Contract Research Organizations (CROs) and Contract Development and Manufacturing Organizations (CDMOs), both of which are vital for outsourced pharma operations.
Another key insight from the survey was the timeline required to make meaningful changes to supply chains. Nearly 44% of companies believed that shifting away from international suppliers—if needed—would take more than two years. Another 36% said it could take one to two years, while only 21% felt they could manage such a transition within a year. In an industry where speed to market and stability are critical, these numbers indicate significant operational strain ahead.
Who Pays for It? For Now, Not the Patients
One might expect that a 25% tariff on imported pharmaceutical products would lead to immediate price increases for patients. However, the reality is more nuanced. In the short term, most of the burden is expected to be absorbed by pharmaceutical companies, not consumers. That’s because drug prices in the U.S. are often locked in through contracts with insurers and government programs, and most patients only pay co-pays or a portion of the negotiated rate.
That said, these Trump pharma tariffs costs are not insignificant. Industry analysts estimate that if imposed, tariffs could add nearly $46 billion in costs to the U.S. pharmaceutical sector. While large companies may be able to absorb the initial impact without passing it on to patients, the longer-term effects could include delayed investments, cost-cutting, and potentially higher prices down the line—especially in lower-margin drug categories.
Generic Drugs Face the Real Squeeze
While branded drugs often have higher price buffers and broader margins, the story is different for generics. These are often produced in India and China, where lower manufacturing costs have made affordable access to medicine possible in the U.S. Generics account for over 90% of all prescriptions in the U.S. but make up only about 17% of total spending on medicines.
The problem is that generics already operate on razor-thin margins. A 25% tariff could push many producers into losses, making it unfeasible for them to supply at existing prices. This could result in shortages, fewer generic options, or price increases—hurting the very patients who rely on low-cost drugs the most.
R&D and Innovation Could Take a Hit
The BIO survey and industry analysts both point to a worrying outcome—research and development may be one of the first areas to suffer if Trump pharma tariffs costs rise. Since many companies can’t raise drug prices due to contractual constraints, the next logical step could be internal cost-cutting.
That could mean fewer clinical trials, slower progress on pipeline drugs, and even staff reductions in R&D departments. Smaller biotech firms that rely heavily on external funding and operate on lean budgets are particularly vulnerable. Even large companies like Eli Lilly and Johnson & Johnson, despite committing to increase U.S. manufacturing, have acknowledged that such expansions will take years to complete.
A Long Road to Domestic Manufacturing
It’s true that some companies are responding by increasing their U.S. manufacturing footprint. Eli Lilly recently announced a $27 billion investment to construct four new manufacturing “mega-sites” in the U.S., while Johnson & Johnson has pledged $55 billion over four years to expand its domestic operations.
But such projects are long-term in nature. The industry widely agrees that boosting U.S. manufacturing is a worthy goal, but replacing global supply chains is not something that can happen overnight. Many components, including APIs and sterile injectables, require specialized facilities that are not currently available at scale within the U.S.
Final Thoughts: A Delicate Balancing Act
The administration’s push for Trump pharma tariffs is rooted in a desire to bring jobs and manufacturing back to American soil. However, the pharma industry’s concerns suggest that such a shift needs to be managed carefully, with clear timelines, phased implementation, and stakeholder consultation.
The danger isn’t just higher costs—it’s the risk of disrupting access to essential medicines, delaying drug approvals, and slowing down the pace of innovation. As the world’s largest pharmaceutical market, the U.S. has a lot to gain from stronger domestic production. But if tariffs are introduced hastily, the costs could ripple across the global healthcare ecosystem, affecting patients, providers, and innovators alike.
Trump Pharma Tariffs
Trump Pharma Tariffs
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