Pharmaceutical Tariffs and Their Impact

As tariffs go into effect, the push for bringing pharmaceutical manufacturers to the U.S. grows stronger- but this movement is sitting on a bed of sand.

Unilateral executive orders (EO) initiated by the sitting president can be reversed by the next in line once they take office. It can take many years and billions of dollars to build drug manufacturing facilities, source raw material, and obtain regulatory approval. Drug companies may just gamble on waiting for the next administration to overturn the EO.

Over 80% of U.S. generic APIs are sourced from China and India. We are now more dependent than ever on other countries for our drugs. (1)

“You should tariff everything from every country forever, because if companies know it’s forever, they’ll build their factories here. Otherwise they’ll wait.”

Ever since the pandemic, the US has become more dependent on China for sourcing APIs. Politics aside, how will tariffs affect your access to lifesaving drugs?

Even though drugs are exempt from the tariffs- for now- the domino effect of active pharmaceutical ingredients (APIs) threatening the generic market supply will have devastating consequences.

Generic drugs, operating at an already small profit margin (0.3%) will be the first to feel the economic and supply chain disruption. (2)

The administration is considering a 25% tariff on APIs and finished drugs, in addition to the 10% tariff placed on China in February of this year on Chinese imports. (3)

Drugs Affected by Tariffs

The Near Future - 0-6 Months

• Antidepressants: Bupropion, and other antidepressants could see price increases and even shortages.
• Antibiotics: China produces over 80% of key antibiotic APIs, including doxycycline, azithromycin, and amoxicillin. (4)
• Cancer drugs: Imatinib (leukemia) and paclitaxel (chemotherapy), require specialized manufacturing processes concentrated in India and Europe.

Mid-Term Effects (6-12 Months)

• GLP-1 Agonists (e.g., Ozempic, Wegovy): Despite current exemptions, Novo Nordisk’s European production sites supply 65% of U.S. demand. A 20% tariff could elevate annual costs by $1,200 per patient. (5)
• Monoclonal Antibodies (e.g., Keytruda, Humira): EU-made biologics account for $22 billion in annual imports. (6) Tariffs may force manufacturers to absorb costs or reduce rebates, indirectly inflating list prices.
• Chronic Disease Medications: Drugs for hypertension (amlodipine), asthma (albuterol), and diabetes (empagliflozin) face compounded risks. India is the primary supplier of these drugs. Retaliatory tariffs could disrupt 40% of the U.S. generic market, worsening existing shortages. (7)

We are all going to be in for a bumpy ride- and it isn’t going away anytime soon. Now is the time to take stock of your medicine cabinet. Between drug shortages and supply chain issues, the burden lands on you to make sure you and your family ride out the storm- the storm that has already hit our shores.

Citations

1. PharmaVoice. (2025, April 8). Trump tariffs could put more pressure on U.S. to produce generic drugs. Are we ready? Retrieved from https://www.pharmavoice.com/news/trump-tariffs-china-generic-drug-manufacturing-reshore/734785/
2. LGM Pharma. (2025, April 8). Tariffs and geopolitics: API supply chain resilience in 2025. Retrieved from https://lgmpharma.com/blog/tariffs-api-supply-chain-resilience-in-2025/
3. BioPharma Dive. (2025, April 8). Tariffs raise concern among generic drugmakers, as advocacy groups seek exemptions. Retrieved from https://www.biopharmadive.com/news/tariffs-china-trump-generic-drugs-pharma/739645/
4. Drug Patent Watch. (2025, March 25). The role of China in the global generic drug API market. Retrieved from https://www.drugpatentwatch.com/blog/the-role-of-china-in-the-global-generic-drug-api-market
5. Reuters. (2025, March 18). Big pharma fears best-selling drugs in crosshairs of US-EU tariff spat. Retrieved from https://www.reuters.com/business/healthcare-pharmaceuticals/big-pharma-fears-best-selling-drugs-crosshairs-us-eu-tariff-spat-2025-03-18/
6. European Federation of Pharmaceutical Industries and Associations (EFPIA). (2022). The pharmaceutical industry in figures: Key data 2022. Retrieved from https://www.efpia.eu/media/637143/the-pharmaceutical-industry-in-figures-2022.p
7. USA Today. (2025, March 15). How Trump's tariffs could affect prescription drug costs, supplies. Retrieved from https://www.usatoday.com/story/money/2025/03/15/trump-tariffs-prescription-drug-shortages/81804811007/

Written by: Brooke Lounsbury