A report commissioned by the Pharmaceutical Research and Manufacturers of America shows that a 25% U.S. tariff on pharmaceutical imports would increase U.S. drug costs by nearly $51 billion annually, potentially raising prices by as much as 12.9%. The United States imported $203 billion in pharmaceutical products in 2023, with 73% coming from Europe, mainly Ireland, Germany, and Switzerland. Total U.S. sales of finished pharmaceuticals that year were $393 billion.
The pharmaceutical lobby argues that tariffs would undermine efforts to boost domestic manufacturing, which is a goal of President Donald Trump. The administration has announced probes into pharmaceutical imports, citing national security concerns over reliance on foreign drug production. Drugmakers fear that high tariffs would hinder their ability to ramp up U.S. production and have lobbied Trump to phase in tariffs on imported products. Swiss drugmaker Roche is petitioning for import tariff exemptions, highlighting the offset of its U.S. exports with its imports.
The report also mentions that tariffs on imported pharmaceuticals could raise domestic production costs by 4.1% and reduce the global competitiveness of U.S.-made drugs. Additionally, around 25% of U.S. pharmaceutical output is exported, totaling $101 billion in 2023. The report does not include the potential impact of retaliatory tariffs, which could have a significant economic impact on U.S. producers.
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