Trump's Drug Tariffs May Boost Costs and Cause Shortages, WarnExperts

During a political fundraiser dinner on Tuesday evening, President Donald Trump stated his intention to unveil tariffs on medications shortly.

"Once we impose tariffs on our pharmaceutical products, they will return to our country because we represent the large market," Trump stated during the National Republican Congressional Committee dinner in Washington, D.C.

"When people learn about this, they will exit China and other locations since...the majority of their products are sold here, and they plan to expand their factories across our nation — we'll soon be making that announcement," he went on to say.

Even though Trump recently introduced a 90-day halt on certain tariff measures He stated on Wednesday that he remains committed to imposing tariffs on pharmaceutical products to encourage domestic drug production in the U.S. “We’re going to impose tariffs on these pharmaceutical companies, and then they’ll all want to return,” Trump remarked while addressing reporters at the Oval Office.

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Most of the basic components of nearly all medicines come from abroad, despite many drugs being produced domestically in the U.S., which implies that tariffs might increase the prices of various medications such as non-prescription analgesics along with antibiotics, cardiac therapies, and respiratory treatments.

Experts in pharmacy and economics stated that these tariffs might result in drug shortages and could possibly impede research and development efforts as well.

Added costs

Specialists indicate that all additional expenses would ultimately be borne by the customer.

Ernie Tedeschi, who leads economic analysis at The Budget Lab at Yale—a nonpartisan policy research institute—told ABC News that U.S. households paid approximately $4,200 per year for prescription medications in 2024. This total encompasses both direct payments from individuals and expenses managed through insurance coverage.

Tedeschi mentioned that according to The Budget Lab’s analysis, a tariff of 25%, for instance, would lead to an average increase in drug prices by approximately 15%.

According to his statement, "Our evaluation indicates that annual expenses for prescription medications could increase by approximately $600 per household in the U.S. On this amount, not every family might have to pay the entire $600 directly; however, the remainder would likely be covered by their insurance provider."

He continued, "Even if families aren't aware of any cost increases they're directly facing, they could still wind up with increased insurance premiums and higher copayments because of this."

FURTHER: Experts caution that a drug shortage could endanger patients' lives.

Drug shortages

Tariffs might also affect generic drug manufacturers with narrow profit margins, says Dr. Erin Fox, the associate chief pharmacy officer at University of Utah Health, who monitors drug shortages.

Fox expressed her concerns to ABC News regarding medications that frequently face shortages, particularly injectable drugs such as lidocaine, which is commonly used for numbing pain.

She mentioned that medications which individuals consume daily, typically in tablet form, are unlikely to be significantly affected in the short term due to the presence of numerous suppliers for these items.

"AInjectable products could have at most two or three suppliers," she stated.

Fox mentioned that many generic firms typically maintain a stockpile of their active pharmaceutical ingredients ranging from six to twelve months, and several businesses might have acquired additional supplies in preparation for these new tariffs.

"What we might not witness immediately is the impact of this situation. However, once the company needs to purchase additional raw materials, they may face higher tariffs. The question then becomes whether the business can manage these increased costs," explained Fox.

Less research and development

Dr. William Padula, who serves as an assistant professor of health policy and economics at the University of Southern California and holds a position as a researcher at the USC Schaeffer Center, stated that he does not think the tariffs will significantly affect consumers; however, they might influence the research and development sectors within pharmaceutical firms.

He mentioned that pharmaceutical firms not only produce medications but also develop various tools like vaccines, biomedical items, and even non-prescription goods, for instance, bandages.

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Padula mentioned that these firms allocate their earnings through various means such as funding research and development initiatives.

“If due to lower R&D funding, as fewer individuals purchase medications that have become more expensive because of tariffs, they might eventually need to cut back on their investments in research and development. This reduction could diminish innovation over time,” he explained to ABC News.

Consequently, we might find ourselves in a scenario where fewer innovative new therapies become available for patients suffering from various ailments, he noted.

Sony Salzman from ABC News contributed to this report.