A report commissioned by the Pharmaceutical Research and Manufacturers of America reveals that a 25% U.S. tariff on pharmaceutical imports could increase U.S. drug costs by nearly $51 billion annually, leading to price hikes of up to 12.9%. The United States imported $203 billion in pharmaceutical products in 2023, with the majority coming from Europe. The report highlights concerns that tariffs would hinder efforts to boost domestic manufacturing, a goal of President Donald Trump. The Trump administration has initiated probes into pharmaceutical imports, citing national security concerns over reliance on foreign drug production. Drug manufacturers see this as an opportunity to demonstrate that high tariffs would hinder efforts to increase U.S. production and have lobbied for phased-in tariffs as an alternative.
The report also points out that tariffs could impact the competitiveness of U.S.-made drugs globally. Approximately 30% of pharmaceutical imports are ingredients used in U.S. manufacturing, and tariffs on these could raise domestic production costs by 4.1%. The report estimates that a portion of the 490,000 export-related jobs in the industry could be at risk if higher input costs weaken foreign demand for U.S. medicines. The report does not include the potential impact of retaliatory tariffs, which could have a more significant economic impact on U.S. producers. Ultimately, the report highlights the complex and wide-ranging implications of imposing tariffs on pharmaceutical imports.
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