Pharmaceutical Industry Responds to Proposed Trump Administration Tariffs

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Saying the combined issues of drugs—namely fentanyl—and illegal immigration constituted an “extraordinary threat” and national emergency in the United States, the Trump Administration announced on Feb. 1, 2025 an implementation of 25% additional tariffs on imports from Canada and Mexico, and a 10% additional tariff on imports from China (1).

But some of those enactments were delayed after President Donald Trump, on February 3, agreed to a 30-day pause with respect to Canada and Mexico when both countries said they would negotiate with the United States about how best to combat the problems Trump is prioritizing, according to the Associated Press (AP) (2). The AP also reported that China’s response was not as conciliatory, with that country announcing retaliatory tariffs against the US as well as an antitrust investigation into Google (3).

Whatever the eventual outcome, the administration’s fact sheet on the proposed tariffs listed the overcrowding of hospitals as a residual effect of illegal immigration, and holds both Mexico and Canada responsible for funneling international narcotics distribution through the US (1). Those justifications, however, have not kept the pharmaceutical industry from speculating on the possible consequences of the penalties.

The Brookings Institution, a Washington, D.C.-based nonprofit research firm, predicts that if the 25% tariffs on Canada and Mexico wind up being imposed by the US, pharmaceutical exports from Mexico could fall by 61% (4). Should Canada and Mexico enact retaliatory tariffs, as China has done, Brookings estimates the dropoff to climb to 72%. And the Council on Foreign Relations calculated that US exports of vaccines, blood antisera, toxins, and cultures could collectively be one of the top five export categories most affected by the tariff “war,” to the tune of $5 billion in exports to China, $2 billion to Canada, $994 million to Mexico, and $41 billion to the rest of the world (5).

“We are concerned about the unintended, adverse consequences [the tariffs] may have on the cost of medicines in the US,” Susan A. Cantrell, CEO of the Academy of Managed Care Pharmacy, said on February 3 (6). “Many critical medications and raw materials are sourced internationally, and imposing tariffs risks driving up prices, creating supply disruptions, and impeding patient access to essential treatments.”

John Murphy III, president and CEO of the Association for Accessible Medicines, said drug shortages are already problematic, and that that challenge could continue to grow (7).

“Generic[-drug] manufacturers simply can’t absorb new costs. Our manufacturers sell at an extremely low price, sometimes at a loss, and are increasingly forced to exit markets where they are underwater,” Murphy said. “The overall value of all generic sales in the US has gone down by $6.4 billion in five years despite growth in volume and new generic launches. Tariffs would make this much worse.”

“We respectfully urge caution on instituting tariffs on sectors that will impact medical products,” the Healthcare Distribution Alliance said in a statement (8). “Accordingly, we ask the administration to consider establishing exemptions for pharmaceutical products and long implementation timelines.”

Meanwhile, the 13 Democratic members of the US Senate Finance Committee sent a letter on Jan. 30, 2025 to Department of Health and Human Services Secretary nominee Robert F. Kennedy Jr., asking him not to pause Medicare drug price negotiations, as leading pharmaceutical CEOs have requested (9).

“Medicare drug price negotiation is a powerful tool available right now to President Trump to make good on his long-standing promise to stand up to Big Pharma,” the senators wrote. “On behalf of the tens of millions of Americans who count on Medicare, Democrats on the Senate Finance Committee want to know whether the Trump Administration will follow through.”

References

1. The White House. Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China. WhiteHouse.gov, Feb. 1, 2025 (accessed Feb. 4, 2025).
2. Boak, J.; Sánchez, F.; and Gillies, R. Trump Agrees to Pause Tariffs on Canada and Mexico After They Pledge to Boost Border Enforcement. APNews.com, Feb. 3, 2025 (accessed Feb. 4, 2025).
3. Moritsugu, K. and Wu, H. China Counters with Tariffs on US Products. It Will Also Investigate Google. APNews.com, Feb. 4, 2025.
4. Meltzer, J. P. Trump’s 25% Tariffs on Canada and Mexico Will Be a Blow to All Three Economies. Brookings.edu, Feb. 3, 2025 (accessed Feb. 4, 2025).
5. O’Neil, S. K. and Huesa, J. What Trump’s Trade War Would Mean, in Nine Charts. CFR.org, Feb. 1, 2025 (accessed Feb. 4, 2025).
6. Academy of Managed Care Pharmacy. Statement from AMCP CEO Susan A. Cantrell on President Trump’s New Tariffs. Press Release. Feb. 3, 2025.
7. Association for Accessible Medicines. Association for Accessible Medicines Comments on New Tariffs. Press Release. Feb. 2, 2025.
8. Healthcare Distribution Alliance. HDA Statement on Proposed Tariffs of Pharmaceutical Products. Press Release. Feb. 2, 2025.
9. United States Senate Committee on Finance. Wyden, Finance Democrats Press RFK Jr. to Reject Big Pharma Pause on Medicare Negotiation. Press Release. Jan. 30, 2025.