A report commissioned by the Pharmaceutical Research and Manufacturers of America warns that a 25% U.S. tariff on pharmaceutical imports could lead to costs increasing by nearly $51 billion annually. The analysis, conducted by Ernst & Young, shows that the United States imported $203 billion in pharmaceutical products in 2023, with 73% coming from Europe. U.S. sales of finished pharmaceuticals that year totaled $393 billion.
PhRMA argues that tariffs could hinder efforts to boost domestic manufacturing, a goal championed by President Donald Trump. The Trump administration has considered imposing a 25% tariff on pharmaceutical imports, citing national security concerns over reliance on foreign drug production. Drugmakers believe high tariffs would impede their ability to increase U.S. production and have recommended phasing in tariffs or proposing alternative solutions to the administration.
Swiss drugmaker Roche is seeking import tariff exemptions, arguing that its U.S.-made drugs and diagnostics offset the products it ships into the country. The report also highlights the potential impact of tariffs on U.S. pharmaceutical exports and the risk of higher input costs reducing the global competitiveness of domestically-made drugs. Approximately 25% of U.S. pharmaceutical output is exported, supporting thousands of jobs in the industry.
The report does not include the impact of possible retaliatory tariffs, which could significantly harm U.S. producers. Overall, the imposition of tariffs on pharmaceutical imports could result in higher drug prices for consumers, reduced global competitiveness for U.S.-made drugs, and potential job losses in the industry.
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