Trump provides for a strong tax on imported drugs, risking higher prices and shortages

But he hasn’t finished yet.

Trump has promised to impose heavy taxes on importing on pharmaceuticals, a category of products which he has largely spared in his trade war. For decades, in fact, imported medicine has mainly been authorized to enter the United States in the franchise of rights.

It starts to change. American and European leaders have recently detailed a trade agreement which includes a rate of 15% on certain European products brought to the United States, including pharmaceutical products. Trump threatens 200% more tasks on drugs made elsewhere.

“Shock and fear” is how Maytee Pereira of the Trump tax and advice cabinet for drug manufacturers. “It is an industry that goes from zero (prices) to the potential of 200%.”

Trump promised Americans that he would lower their drugs. But the imposing rigid pharmaceutical rate risks in the opposite and could disrupt complex supply chains, drive generic drugs abroad cheap out of the American market and create shortages.

“A price would mainly harm consumers, because they would feel the inflationary effect … directly when paying the pharmacy orders and indirectly thanks to higher insurance premiums,” wrote the last stadig, adding that households with lower and darkest income would have the greatest impact.

The threat comes as Trump also puts pressure on drug manufacturers to reduce prices in the United States. He recently sent letters to several companies telling them to develop a plan to start offering here that the so-called the most favored prices.

But Trump said that he would delay the prices for a year or a year and a half, giving companies a chance to store medication and transferring manufacturing in the United States – something that some have already started to do.

Leerink Partners analyst David Risinger, said in a note of July 29 that most drug manufacturers have already increased imports of drug products and can transport between six and 18 months of inventory to the United States

Jefferies analyst David Windley said in a recent research note that prices that are not triggered before half of 2026 would not be felt in 2027 or 2028 due to storage.

In addition, many analysts suspect that Trump will be satisfied with a price much less than 200%. They also wait to see if a pricing policy includes an exemption for certain products such as generic drugs with low margin.

However, says Stadig, even a 25% direct debit would gradually increase the prices of American medicines from 10% to 14% as stocks decrease.

In recent decades, drug manufacturers have moved numerous operations abroad – to take advantage of lower costs in China and India and tax reductions in Ireland and Switzerland. As a result, the American trade deficit in medicinal and pharmaceutical products is important – nearly $ 150 billion last year.

The COVVI -19 experience – When the countries were desperate to hang on to their own medicines and medical supplies – have stressed the dangers of relying on foreign countries in crisis, especially when a key supplier is American geopolitical China.

In April, the administration began to study how the importation of drugs and pharmaceutical ingredients affects national security. Article 232 of the 1962 ACT Trade Act allows the president to command national security rates.

Marta Wosińska, analyst of health policies at Brookings Institution, says that there is a role for prices in securing American medical supplies. Biden administration, she noted, has managed to tax foreign syringes when cheap imports threatened to chase the American producers of the company.

Trump has bigger ideas: he wants to bring back pharmaceutical factories to the United States, noting that drugs made in the United States will not face his prices.

Drug manufacturers are already investing in the United States.

The manufacturer of Swiss drugs Roche said in April that it would invest $ 50 billion in the expansion of its American operations. Johnson & Johnson will spend $ 55 billion in the United States over the next four years. CEO Joaquin Duato recently said that the company was aimed at providing drugs for the American market entirely from sites there.

But the construction of a pharmaceutical factory in the United States from zero is expensive and can take several years.

And construction in the United States would not necessarily protect a manufacturer of Trump’s tariffs, not if the taxes applied to the imported ingredients used in the medication. Jacob Jensen, trade policies analyst at the right -wing American action forum, notes that “97% of antibiotics, 92% of antivirals and 83% of the most popular generic drugs contain at least one active ingredient made abroad.”

“The only way to really protect yourself from prices would be to build the supply chain from start to finish in the United States,” said Pereira.

Brand pharmaceutical companies have fat -benefiting margins that offer flexibility to make investments and absorb costs at the start of Trump’s prices. Generic drug manufacturers do not do so.

Some may decide to leave the American market rather than paying prices. This could prove disruptive: generics represent 92% of the prescriptions for retail and mail order sales pharmacy.

A production break in a factory in India a few years ago led to a shortage of chemotherapy that disrupted care against cancer. “These are not very resilient markets,” said Wosińska de BrooKings. “If there is a shock, it is difficult for them to recover.”

She maintains that rates alone can persuade generic drug manufacturers to build American factories: they would likely need government funding.

“In an ideal world, we would do everything that is important only in the United States,” said Wosińska. “But it costs a lot of money … we have committed our supply chains so much because we want to have cheap medicines. If we want to reverse this, we really have to rethink our system … How much are we ready to spend? »»

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Murphy reported Indianapolis. The writer AD Health Matthew Perrone contributed to this report.