Pharmaceutical Tariffs Could Threaten Global Drug Supply Chains
How pharmaceutical tariffs could reshape drug pricing, supply chains and domestic production in the United States, according to Eric Tichy, Pharm.D., M.B.A., vice chair of pharmacy formulary at the Mayo Clinic Health System.
In early 2025, President Donald Trump threatened to impose tariffs of up to 25% on imported pharmaceuticals, which the administration argues will increase domestic drug production.
The tariffs could impact generic drug production, many of which are made in India and China. However, the real concern is shortages of more essential medications, according to Eric Tichy, Pharm.D., M.B.A., vice chair of pharmacy formulary at the Mayo Clinic Health System. Tichy recently published a study on projected U.S. drug expenditures for 2025.
“Generic drugs only make up about 10% to 12% of our drug expenditures,” Tichy said in an interview with Managed Healthcare Executive. “Even if they went up 10% or 20%, they’re still one-tenth of our drug expenditures.”
Eric Tichy, Pharm.D., M.B.A.
If the tariffs do go into place, Tichy said that there may be a delay in production because of the shift in supply chains.
“I think a lot of these things are going to be more of a long-term factor,” Tichy said. “Even with the Inflation Reduction Act, which was passed several years ago, we don't expect to start seeing a big impact from that until 2026, when the pricing with that goes into effect.”
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