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Pharma Dodges The Tariff Bullet – But For How Long?
In recent years, the pharmaceutical industry has been under pressure to increase its domestic manufacturing capabilities in response to increasing global demand and concerns over supply chain reliability. However, with the current administration’s proposal to impose tariffs on non-US pharmaceuticals, the sector is facing a significant threat that could have far-reaching consequences.
Imposing tariffs on pharmaceuticals would put American companies at a disadvantage in the market, making it more difficult for them to compete globally. As a result, they may be forced to increase prices or reduce their production levels, leading to a shortage of essential medications and medical devices.
The cost of these tariffs could also have devastating effects on patients who rely on these medications for survival. For instance, chemotherapy drugs, antibiotics, and other critical medications are already in short supply, with some patients having to pay exorbitant prices or resorting to black markets to get the medicines they need.
Moreover, the impact of these tariffs would not be limited to the United States alone. It could also have significant repercussions for the global pharmaceutical market, as well as the broader economy.
In this context, it is crucial to remember that close to 40% of generic drugs consumed in the US are imported from India and nearly 70% of basic drug ingredients used by US firms come from China. Any disruption in these supply chains could have catastrophic consequences for patients worldwide.
So, while pharma dodges the tariff bullet at this moment, it is essential that we recognize the long-term implications of such a move.
Source: https://www.forbes.com/sites/stephenbrozak/2025/04/03/pharma-dodges-the-tariff-bulletbut-for-how-long/
