Data shows turmoil over drug tariffs

An analysis from the Center for Infectious Disease Research and Policy looked at how a 25% tariff on Canadian-manufactured pharmaceuticals could raise US drug costs by as much as $750 million and place serious strain on supply chains. About 400 medications are imported to the US from Canada, and it is the only available source for nearly 30 of them.  

Tariffs ultimately could make it harder for American patients to access medications they need, experts said. Researcher Mina Tadrous of the University of Toronto said the tariffs could affect a variety of important drugs, from antibiotics to mental health therapies. “Our work highlights that perhaps the US should consider removing medications from its list of imports, in line with previous tariffs, to avoid disruptions to supply chains and potential shortages that may affect US patients,” Tadrous said in a statement. 

President Trump has said tariffs on imported medications likely would start at about 25% and could go even higher. Trump has stated that the tariffs are intended to drive drugmakers to move more of their operations to the US. 

There have been reports in May about some independent pharmacies stockpiling commonly dispensed drugs in an attempt to weather possible tariff-influenced cost fluctuations. If reimbursements don’t rise to counteract higher prices, some independent pharmacy owners have said they could find the financial losses too serious to overcome. 

President Trump recently signed an executive order instructing federal agencies to redouble efforts to significantly reduce prescription drug prices by linking them to prices paid by other developed nations.  

A Harvard Business Review report offers big-picture information on the effects of tariffs on the nation’s prescription drug market.