Donald Trump has kicked off a remarkable effort. He is proposing to apply 100% tariffs on their imported branded drugs for any company that does not commit to building new pharmaceutical manufacturing facilities in the United States by October 1. This major policy change is intended to strengthen domestic supply chains and lessen dependence on foreign imports.
Tuesday night, Trump previewed his plans on Truth Social. Specifically, he declared that his administration would institute tariffs unless companies are in the midst of building or have at least begun the process of developing new manufacturing facilities here in the U.S. The coming tariffs would only apply to branded and patented drugs. This heightens the stakes for pharmaceutical manufacturers that the administration has already been exerting pressure on to lower drug prices nationwide.
Yet that’s what Trump prescribed in his recent, half-heartedly touted Initiative. In August, he suggested that tariffs on pharmaceuticals could increase as much as 150% in the coming year and a half. The threat still looms, as there are signs these tariffs may eventually increase to 250%, devastating our pharmaceutical supply chain.
“Unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America,” Trump emphasized in his post, highlighting the administration’s commitment to domestic manufacturing.
This new effort comes at a critical time. Previous tariff threats had caused a rush in exports of pharmaceuticals and medical products from Europe to the U.S., as producers rushed to build up inventories ahead of the tariffs taking effect. Europe has always been a crucial source of supply of branded drugs and their various APIs to the United States. Over the past year, Ireland has sent an estimated $50 billion in pharmaceutical imports our way.
Through it all, the drug companies continue business as usual. She really drove that home when she said that their member companies have announced investments of well over a hundred billion dollars in new U.S. facilities.
“Drug companies continue to announce hundreds of billions in new U.S. investments,” – Alex Schriver
There is still uncertainty about the tariffs’ long-term effect on investment. One member raised the alarm on these moves, saying, “Tariffs undermine our strategy. Each dollar that goes to pay tariffs is a dollar we can’t spend on building up American manufacturing or creating innovative new treatments and cures for patients.
