Trump’s planned pharmaceutical tariffs would raise costs by $51bn annually, report finds

Donald Trump’s threat of placing 25 percent tariffs on all foreign pharmaceutical imports would increase U.S. drug costs by nearly $51 billion, a new report has found.

Prices of medication and other costs could increase by as much as 12.9 percent if the tariffs, which have not yet been implemented, are put in place.

The findings come from a report commissioned by the pharmaceutical industry's U.S. trade group, conducted by Ernst & Young, and reviewed by Reuters.

The analysis found that in 2023, the U.S. imported $203 billion in pharmaceutical products, 73 percent of which came from Europe – primarily from Ireland, Switzerland and Germany.

Total U.S. sales of finished pharmaceuticals that year were $393 billion.

Dated April 22, the report was commissioned by the main U.S. pharmaceutical lobby, the Pharmaceutical Research and Manufacturers of America, whose members include Amgen, Bristol Myers Squibb, Eli Lilly, and Pfizer, among others.

It was not made public.

The report was commissioned after the Trump administration announced it would investigate pharmaceutical imports, citing national security concerns over reliance on foreign drug production.

A 21-day public comment period, during which individuals, organizations, and other interested parties can provide input to help shape the final form of a proposed policy or regulation, is now underway.

So far, pharmaceutical products have been spared from the president’s sweeping global tariffs on foreign products coming into the U.S., though he has threatened to impose the 25 percent levy multiple times.

PhMRA has argued tariffs would undermine efforts to boost domestic manufacturing of drugs and other pharmaceuticals, contrary to the president’s aims.

Foreign drugmakers have also lobbied Trump, in case tariffs are imposed, to phase in levies on imported pharmaceutical products in hopes of reducing the impact of the charges.

It is unclear to what extent tariffs on imported intermediate inputs or imported finished products would be passed on to consumers, the report said.

In addition, roughly 25 percent of U.S. pharmaceutical products are exported. The total export costs totalled $101 billion in 2023, according to EY.

The consultancy firm added that a portion of the 490,000 export-related jobs in the industry could also be at risk if higher input costs weaken foreign demand for U.S. medicines.

The PhRMA report did not include the impact of possible retaliatory tariffs. The economic impact on those for U.S. producers would be much more significant, Reuters reports.

Reuters contributed to this report.