SerpApi.Org
President Donald Trump has announced plans that would mean all imported generic drugs will face a 100 percent tariff starting in 2028 and a 200 percent tariff from 2029 onward, which could have implications on the supply of drugs many Americans rely on, experts warned.
In a Truth Social post on Tuesday, Trump announced the plan, saying the policy is intended to encourage companies to build pharmaceutical plants domestically and “RESHORE Generic Pharmaceutical Production into America.” He added that the policy on patented, branded or innovative drugs will remain unchanged.
Generic drugs dominate the U.S. prescription market. According to the Food and Drug Administration (FDA), nine out of 10 prescriptions filled in America are for generic drugs. Eighty-eight percent of older Americans have at least prescription, according to the congressional intelligence platform legis1.com, and nearly all of those drugs rely on overseas manufacturing as well.
That means Americans rely heavily on drugs or active ingredients brought in from overseas, and one major concern is that two years is not enough time for domestic manufacturers to pick up that demand, Rena Conti, a professor of markets, public policy and law at Boston University, told Newsweek.
“This policy could cause generic drug shortages or aggravate existing shortages,” she said, adding that it could in turn raise costs for patients and insurers.
As Americans pay almost three times more for prescription drugs than patients in other wealthy nations, the Trump administration made tackling the cost of many popular drugs one of its focuses.
The president previously brought in a most favored nation pricing policy, to match U.S. drug prices to cheaper ones abroad, and launched his government-hosted website TrumpRx, which he said would help Americans access discounted prescription drugs.
“President Trump’s announcement provides a two-year runway for generic drugmakers to reshore production back into the United States, and the Administration’s full equipment expensing, aggressive deregulation, and other policies are aimed at making this transition as seamless as possible,” White House spokesman Kush Desai told Newsweek in an email Wednesday.
“The President’s resounding success securing firm reshoring plans from global drugmakers as part of our Most-Favored-Nations deals and Section 232 tariff program for branded drugs is proof that this Administration’s has a track record of success to get critical manufacturing back into the United States.”
How Tariffs Could Impact Americans’ Medical Bills
Trump argued in this Truth Social post that the tariffs would strengthen supply chain security by bringing production back to the United States. However, industry experts seem to be less certain.
About 50 percent of all of America’s generic drug prescriptions are filled with products manufactured in India, according to a State Department report. The country supplies the U.S. with antibiotics, cardiovascular drugs, diabetes medications, oncology generics and antiretrovirals. The U.S. also imports around 17 percent of its active pharmaceutical ingredients from China.
So America’s heavy reliance on overseas imports for generic drugs could lead to shortages as those nations seek to avoid the tariffs.
“I expect generic firms to exit the U.S. market altogether, if the costs of tariffs or reshoring are high and not offset by profits,” Conti said.
The State Department report also referred to vulnerabilities already existing in America’s domestic drug supply chain, saying that critical supply risks may not even require “foreign disruption” to materialize, pointing to how natural disasters have previously damaged U.S. facilities and resulted in shortages of essential treatments.
That could also drive Americans to use branded drugs, Conti said, as Trump has said the policy does not apply to branded drugs, which Conti said will raise costs for patients and insurers as they are more expensive.
Dr. Mariana Socal, a professor of health policy and management at Johns Hopkins University, told Newsweek that generic drug prices could rise for Americans as a result of the tariff.
“The generic drug market is characterized by low profit margins, and drug manufacturers and supply chain participants may not be able to absorb the added cost from tariffs,” Socal said.
“We depend on the global market for many essential generic drugs such as antibiotics, anesthetics, chemotherapies, and others. Intravenous solutions, which have special manufacturing requirements to be free from contamination, may be the most vulnerable. These drugs are already most vulnerable to supply disruptions due to their low cost and high manufacturing standards.”
Socal says her research shows that global drug manufacturers of generic drugs that are sold to the U.S. market also sell to the European and Japanese markets.
“Because the U.S. is paying lower prices than other countries, on average, for these drugs, it is possible that, when facing tariffs, global drug manufacturers may choose to prioritize other global markets as opposed to the US,” she said. “This could severely exacerbate the drug shortages that we already have for generics in the U.S., at least in the short run.”
Ameet Sarpatwari, a professor of population medicine at Harvard University, echoed those sentiments, telling Newsweek in an email Wednesday that tariffs may do more harm than good in the effort to make drugs more affordable for Americans.
“Although domestic onshoring of generic drug manufacturing is a laudable goal, both from a population health and national security standpoint, the Trump Administration’s proposed tariffs are a poor vehicle to accomplish it,” Sarpatwari said. “The tariffs would make a more favorable climate for would be domestic manufacturers, but the margins for generic drugs are very thin, and setting up manufacturing plants is timely and costly.
“For this reason, the tariffs may not be sufficient to spur domestic generic manufacturing. Meanwhile, because the environment is now less favorable for foreign manufacturers, if they cannot raise their prices, then they may exit the market, creating shortages. So, taking this all in, it’s likely that you may see more shortages or higher prices for generic drugs. A majority of drugs that U.S. patients use are manufactured abroad, so the reach of the policy would be vast.”
AARP, formerly known as the American Association of Retired Persons, the largest nonprofit, nonpartisan organization in the U.S., recently found that prices for the top 25 branded drugs in the U.S. have increased by an average of 81 percent since they entered the market. Increases were notably smaller in other nations.
The Association of Accessible Medicines warned that the proposed tariffs on generic medicines could have “disastrous impacts on the already-struggling U.S. market,” as they could make it “nearly impossible to continue manufacturing in the U.S. for those who already do so, and would discourage others from onshoring,” which they said ultimately “exacerbates supply chain shortages.”
Which Drugs Could Be Affected?
Drugs impacted by the announcement appear to be generic drugs that have either been manufactured overseas and imported as a finished drug or have had their active pharmaceutical ingredients imported, even if manufacturing takes place in the U.S.
Below is a list of some examples of commonly prescribed generic medicines with significant overseas manufacturing footprints, which could be affected:
- Ibuprofen: Around 95 percent of U.S. imports of this everyday anti-inflammatory come from China.
- Hydrocortisone: A staple topical steroid, with 91 percent of imports originating from China.
- Acetaminophen: China accounts for roughly 70 percent of U.S. imports for this common pain and fever reducer.
- Atorvastatin: One of the most prescribed cholesterol medications globally, heavily supplied by major Indian pharmaceutical manufacturers.
- Amlodipine: Another top-prescribed daily blood pressure management drug that relies heavily on global manufacturing, such as from China and India.
- Penicillin: A critical first-line antibiotic. China accounts for 45 percent of U.S. penicillin imports.
This list is not exhaustive, and it is not yet clear which drugs will be impacted.
Contact Newsweek editors on this story: Matthew Robinson and Dave Siminoff.
Related Articles
