A report commissioned by the U.S. pharmaceutical industry’s trade group, Pharmaceutical Research and Manufacturers of America (PhRMA), found that a 25% tariff on pharmaceutical imports could increase U.S. drug costs by nearly $51 billion annually. This tariff could raise U.S. drug prices by up to 12.9%, impacting the $393 billion in total U.S. sales of pharmaceuticals in 2023.
The report, conducted by Ernst & Young, showed that the U.S. imported $203 billion in pharmaceutical products in 2023, with 73% coming from Europe, particularly Ireland, Germany, and Switzerland. The main pharmaceutical companies in the U.S., including Amgen, Bristol Myers Squibb, Eli Lilly, and Pfizer, are part of PhRMA.
President Donald Trump has threatened a 25% tariff on pharmaceutical imports, citing national security concerns over reliance on foreign drug production. The pharmaceutical industry is concerned that high tariffs would hinder their efforts to increase U.S. production and have proposed alternatives to the government.
In addition to potentially raising domestic production costs and reducing global competitiveness of U.S.-made drugs, the report also highlighted that tariffs could lead to job losses in the industry. Approximately 25% of U.S. pharmaceutical output is exported, totaling $101 billion in 2023. The report did not take into account the potential impact of retaliatory tariffs, which could further harm U.S. producers.
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