Impact of Trump’s Tariffs on Prescription Drug Costs and Global Pharma Trade

• President Donald Trump’s announcement of 100% tariffs on imports of branded and patented medicines, effective October 1, will increase medical bills for Americans, who spend about 10% of household medical care on prescription drugs.

• A 15% tariff cap on imports from the EU and Japan mitigates some impact, as these regions represent nearly three-fourths of pharmaceutical imports, including key drugs like Wegovy and Ozempic.

• Patients requiring specialized treatments for cancer or rare diseases may face severe consequences due to rising drug prices.

• The health insurance sector could experience greater costs as insurers may pass the increased prices of specialty medicines onto policyholders.

• An Ernst & Young study predicts that a 25% tariff could elevate annual drug costs by approximately $51 billion.

• Countries outside the exemption zone, including the U.K., Switzerland, and Singapore, face significant price increases due to the high tariff burden, while India’s generics industry remains currently unaffected.

• Generics constitute 90% of U.S. prescriptions but only 13% of spending; however, future tariff extension to generics could harm India’s pharmaceutical export sector, projected at over $10.5 billion in FY25.

• There is uncertainty regarding whether Active Pharmaceutical Ingredients (APIs) will be included in the tariffs, with India and China being key suppliers globally.

• The impact on the price competitiveness of U.S. medicine exports in light of new tariffs remains unclear.

• Trump’s tariff decision contradicted warnings from PhRMA, which stated that it would increase costs for patients without resolving supply chain issues.

• This move signifies a shift in global supply chains established post-World War II, urging nations reliant on U.S. demand, including India, to seek alternative trade alliances and diversify markets.

Trump Drug Tariffs is important topic for Civil service exam (WBCS).

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