CNN
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President Donald Trump said the “major” tariffs on pharmaceutical income are coming soon. President Donald Trump has mourned that other countries will pay much lower prices for the same medicine, helping to return drug manufacturing to the United States.
Instead, patient advocates and drug supply chain experts warn that tariffs will increase drug prices and worsen the lack of dangerous drugs. Whether they affect the manufacturer to make more drugs in the United States are the source of discussion, and the output remains for more than a few years.
Trump said on Tuesday that “we will soon announce the main tariffs on the drug.”
The drug was exempted from the president’s “Liberation Day” tariff on April 2, causing the industry to take a sigh of relief for a while. The president also exempted the industry from tariffs imposed on his first term.
In his tariff speech last week, Trump said, “The United States can no longer produce antibiotics that are enough to cure our sick.”
Experts warned that the problem could worsen when the tariff began, and that the problem was a problem. The impact of tariffs can be the largest for generic pharmaceuticals, accounting for about 90%of the drugs prescribed in the United States, dependent on ingredients made in China and India.
Regardless of antibiotics, diabetes drugs, or statins to lower cholesterol, generic drugs are selling “coins per dose”, according to the government relations vice president of the American Health Systems Association. Increasing the cost of the ingredients that go into them, “Selling the drug in the United States can no longer be profitable.”
Lack of antibiotics is already a major problem in the United States. Antibacterial agents are one of the most common drugs that lack supply, and in the United States, there are 40 lack of activity. As of the end of 2024 data At the American Society for Health Systems. Currently, it is included in the lack of antibiotics AmoksiIt is important for treating syphilis infections.
In particular, unstable medicines include sterile injection drugs used in hospitals. This can be as simple as IV saline or injectable glucose used in emergency environments, as well as cancer chemotherapy drugs. They should be manufactured under clean conditions and have been lacking for many years due to low prices and market turmoil.
Erin Fox, an expert at the Utah Health University, said, “The costs that are already added to a product with small margins can be a tip for the company to stop production.” If the company stops making essential products, I’m worried about seeing a less flexible supply chain. ”
RENA Conti, associate professor of Questrom School of Business, said that there are only one supplier who made ingredients for about 40%of the general drugs.
Conti said, “This is a very easy supply.” If one of the manufacturers end, we are a little missing a pickle.
And when a manufacturer is the only supplier of medicines, prices often rise. It can be astronomical for general medicines, such as Martin SHKreli, known as Pharma Bro, raised the price of medicines used by people with HIV from $ 13.50 to $ 750. Public and political pressure has made such a less common movement, but it still occurs.
However, many generic drugs, especially sterile injections, may be difficult for manufacturers to pass the price increase, according to Dr. Marta Wosińska, senior researcher at Brookings Center on Health Policy.
Wosińska said, “Immediate reason -Group purchasing organization (GPO) contract. article Potential impact analysis of tariffs. “All hospitals use GPO to sign a sterile injection generic used in the inpatient environment, and the contract is low but not quantity.”
The contract has generally lasted for 1-3 years and pointed out that “the price increase can be limited.”
In addition, David Maris, a management partner of Phalanx Investment Partners, said, “There is a way to raise prices faster than inflation than inflation,” said David Maris, a management partner of Phalanx Investment Partners, who spent years as a financial analyst according to the pharmaceutical industry. I’m not sure how they can pass the increase. ”
Maris still has a patent protection and a cheaper general copycat competition, which can be a different story, Maris said. In countries, including Ireland, which has a favorable tax environment, there will be a huge amount of tariffs in Europe with a huge amount of pharmaceutical manufacturing.
The ingredients of brand drugs can account for only 10% of the total cost of producing products, Maris estimates that “if 10% increase 35%, the overall impact on the production cost is relatively low.”
Unlike general medicines, branded pharmaceutical manufacturers have more cushions to absorb prices, Maris said. But he doesn’t think they will do so.
“These costs will be delivered and the price of medicines will increase,” he said. “For consumers with insurance, this can mean a high -cost and potentially higher self -pay couple.”
Already the United States has paid the highest price in the world, Trump has been aimed at the past, and is one of some problems that matches lawmakers such as Senator Bernie Sanders.
Merith Basey, managing director of advocacy groups on cheap drugs, said, “Targets will worsen the problem.
Political and public investigations could prevent pharmaceutical companies from raising prices, and Wall Street analysts wore the industry in research notes to avoid delivering tariffs in the form of higher pharmaceutical prices.
Umer Raffat, an analyst at financial firm EVERCORE ISI, was told on March 28 that customers could “convey some of the influence due to price hikes.”
Raffat said, “Many drugs between the United States have already already been priced.“ The price hike in the United States will cause more fire in this burning problem, and by potentially accelerating Washington’s dialogue, Trump’s first administration is to rebuild plans to tie up with other similar countries known as the “preferred country” policy. In a way, it can be counterproductive.
And even if the drug shortages worsen and prices rise during the nearest period, experts are skeptical that tariffs will achieve major goals to return drug manufacturing to the United States.
Evan seigerman, a pharmaceutical analyst of BMO Capital Markets, said, “The global supply chain is the most complicated.
SEIGERMAN predicted that most large pharmaceutical companies said, “In order to consider more permanent manufacturing decisions, we will look at the tariffs imposed on a ‘lack of clocks’ waiting until Trump’s position.
Nevertheless, some major pharmaceutical companies in the United States have recently invested in domestic manufacturing. ELI Lilly said it will invest more $ 27 billion to build four manufacturing plants in the United States in February. The company expects plants to make medicines in five years.
David Ricks, CEO of Lilly, told CNN at the time, “We are trying to do this quickly because we think that there will be a constraint of everything from building materials supply chain to energy, and Ricks also told that plans to build many new domestic factories depend on the renewal of certain advantage of taxes on the industry.
Nevertheless, it can take several years in the process of building a new factory or establishing a new manufacturing site. Many experts agree that it is important to reduce the dependence on other countries on important drugs that are important to CNN, but I wondered if tariffs achieve this.
John Murphy of the Pharmaceutical Pharmaceutical Association, which represents the general pharmaceutical manufacturer, said, “We think that this is an important thing to explore with the administration for the next few years.” This is a long -term proposal. We can’t build the infrastructure overnight, but if you are not careful, you can lose access to many drugs overnight. ”
The industry is waiting for the US Department of Commerce to investigate the so -called section 232 of pharmaceutical income, which allows Trump to impose tariffs under the name of national security. MURPHY will provide a chance for pharmaceutical producers to discuss with the administration for strengthening domestic manufacturing, such as repayment of Medicare and Medicaid, Murphy said.
“Targets will not be the catalyst because there is no investment in a system that can put new facilities in the United States,” he said.
