What Pharmaceutical Tariffs Would Mean for Americans
The potential impacts include higher prices and drug shortages, experts say.
For decades, pharmaceuticals entering the U.S. have been largely tariff-free. In April, to change that with 25% or higher tariffs on imported drugs.
The stated rationale is that tariffs would incentivize drugmakers to set up shop in the U.S., create more jobs, and improve national security by reducing reliance on countries who might halt trade in the event of war or other emergency.
It's unclear whether tariffs would achieve these goals. But if they did take effect, public health experts say they would likely mean higher drug prices and more drug shortages.
U.S. Reliance on Imported Drugs
In the past decade, U.S. pharmaceutical imports have more than doubled in value, from $73 billion in 2014 to over $215 billion in 2024, .
The U.S. once had substantial drug manufacturing operations in several states. But in the past two decades, pharmaceutical manufacturers have and , taking advantage of favorable tax policies in Switzerland, Ireland, and Germany.
For generic drugs, the U.S. relies on lower-cost manufacturing in India and China.
The potential impact of imposing pharmaceutical tariffs is quite different for generic and branded drugs.
The High Price of Branded Drugs
For branded, patent-protected drugs, drugmakers effectively have a monopoly on production, and a major concern is how tariffs would impact cost. Branded drugs already account for 15% of U.S. prescriptions, but nearly 90% of drug spending.
The U.S. pays on average three to four times more than other developed countries for the same branded drugs—leaving about a quarter of Americans unable to afford the branded drugs they need, said Mariana Socal, MD, PhD ’17, an associate professor in Health Policy and Management, in a .
“One of the most immediate consequences [of tariffs] could be price increases” on drugs the U.S. already pays more for than other countries do, Socal said.
But how this plays out for patients would depend on how individual drugmakers respond to tariffs.
To preserve their market share, high-profit drugmakers could choose to absorb the cost of the tariffs rather than pass higher prices on to the consumer. They also could opt to relocate to the U.S. and avoid tariffs, but may choose in that case to “incorporate some of the costs of relocation into the price of their product,” Socal said in the of .
Either way, the price hikes will be passed on to insurance companies, who may in turn change their policies and raise their premiums. Higher prices would also be “passed through to the Medicare program” and result in higher prices for Medicare Part D premiums, Jeromie M. Ballreich, PhD, MHS, an associate research professor in Health Policy and Management, said in the media briefing.
Quality Concerns for Generic Drugs
For generic drugs—such as ibuprofen, aspirin, and antibiotics—the U.S. relies on producers in India and China, where labor costs are cheaper and drugmakers' profit margins are lower.
Unlike branded drugs, the U.S. pays the same or even a bit less than other countries for generics.
“We get these at lower cost, but we do have manufacturing problems like … the possibility of contamination, prompting the U.S. to inspect plants, and supply can be disrupted,” Socal said.
Generic drugmakers in India and China likely can't afford to relocate to the U.S. to avoid tariffs and may seek other ways to absorb the cost, said Socal.
“Tariffs may mean that manufacturers start cutting corners, sending cheaper, lower-quality products that raise more issues and disrupt our supply” and exacerbate the already serious problem with generic shortages.
“Every day hospitals report problems with generic supply,” said Socal. In the first three months of 2024, —and 70% of drug shortages are related to generics, Socal noted.
Shortages of generic drugs—such as —can force patients to rely on more expensive branded drugs that are second-line treatments and not necessarily ideal for their condition, Socal said.
Some drug companies are already stockpiling supplies in anticipation of possible tariffs.
For example, drug imports from Ireland—the single largest exporter of branded pharmaceuticals to the U.S.—in March 2025 were five times higher than in March 2024, said Ballreich.
National Security Questions
One rationale for the proposed drug tariffs is shoring up national security by maintaining a sustainable supply of prescription drugs on U.S. soil, said Socal.
But this raises big questions about which drugs to produce.
“Should we produce every single drug? Which drugs are more strategic for us to produce domestically? We need more information to create incentives to target the drugs that we need the most,” said Socal. A better remedy, she said, is policies that resolve supply issues in the first place.
And it's unlikely that tariffs will spur U.S. manufacturing, said Ballreich. The labs needed to produce complex branded drugs, like injection drugs and more complicated oral medicines, take years to set up. For example, Novo Nordisk, which makes Wegovy and Ozempic, announced in 2024—but the plant will not be operational until 2029.
While the U.S. has some manufacturing capacity that could be expanded, “the short answer is, I do not think we're going to see a significant surge in U.S. manufacturing of branded pharmaceuticals in the near future,” said Ballreich.
Tariffs are a “very blunt instrument” to incentivize manufacturing of branded drugs in the U.S., he said. If that is the goal, there are other important strategies to consider than simply building chemical plants—such as tax policy and subsidies, building a well-trained pharmaceutical workforce, and considering , which was designed to lure microchip manufacturers to the U.S.
