Potential Tariffs Could Skyrocket U.S. Drug Prices by 12.9%

A 25% tariff on pharmaceutical imports may increase U.S. drug costs by $51 billion annually, raising prices by 12.9%. The U.S. imported $203 billion in pharmaceuticals in 2023, mainly from Europe. The industry warns tariffs could hinder domestic production and jeopardize export-related jobs.

A proposed 25% tariff on pharmaceutical imports into the United States could lead to a significant increase in drug prices by nearly 12.9%, resulting in a $51 billion annual surge, according to a report commissioned by the industry's trade group and reviewed by Reuters.

The analysis, conducted by Ernst & Young, revealed the U.S. imported $203 billion in pharmaceutical products in 2023, predominantly from Europe. The report, commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA), highlights potential stumbling blocks to boosting domestic production if tariffs are enforced, undercutting efforts championed by the Trump administration.

Pharmaceuticals have been largely spared in trade disputes due to the sector's vital role, but recent probes by the administration cite national security concerns. This exploration has opened a 21-day public comment period. Industry experts argue that tariffs would impede swift domestic manufacturing growth and suggest alternatives as companies lobby for phased-in tariffs or exemptions.

(With inputs from agencies.)