Trump’s proposed 200-250% tariff on pharma imports to lead to drug shortages and higher prices, says GlobalData

The pharmaceutical industry is on high alert as US President Donald Trump proposes a 200-250% tariff on drug imports, which could significantly increase prices and reduce profit margins. While the tariffs are set to be announced soon, a grace period of 12 to 18 months has been indicated before they take effect. Even with this delay, production costs are likely to rise, potentially leading to drug shortages and higher consumer prices, says GlobalData, a leading data and analytics company. 

Kathryn Kinch, Senior Pharma Product Manager at GlobalData, comments: “Historically exempt from tariffs due to their essential nature, pharmaceuticals are now under scrutiny for perceived unfair pricing, prompting major firms like Novartis and Eli Lilly to invest in US operations.”

According to credit rating agency Morningstar DBRS, while US-based contract development manufacturing organizations (CDMOs) may benefit in the short term, persistent tariffs could hinder their ability to meet domestic demand. 

GlobalData’s Bio/Pharmaceutical Outsourcing Report reveals more news related to pharmaceutical manufacturing, including that Staska Pharmaceuticals received a warning letter from the FDA following a facility inspection that revealed serious issues, including the use of unregistered bulk drug substances and unsanitary conditions, leading to a voluntary recall of contaminated ascorbic acid solution.

Meanwhile, several companies are expanding their manufacturing capabilities: Axplora Group is investing €35 million to enhance its Farmabios site in Italy, Nippon Shokubai is set to tenfold its nucleic acid drug API production in Japan, and Vetter Pharma-Fertigung is constructing a new clinical manufacturing site in Chicago.

The Bio/Pharmaceutical Outsourcing Report is a monthly analysis of news and trends affecting pharmaceutical contract manufacturing organizations. The report lists the latest contract manufacturing agreements, opportunities and threats for CDMOs, M&A and financing of CDMOs, and emerging regulatory news.