Pharma tariffs would raise U.S. drug costs by $51 billion annually, report finds

A 25% U.S. tariff on pharmaceutical imports would increase U.S. drug costs by nearly $51 billion annually, boosting U.S. prices by as much as 12.9% if passed on, a report commissioned by the industry’s U.S. trade group and reviewed by Reuters shows.

A 25% U.S. tariff on pharmaceutical imports would increase U.S. drug costs by nearly $51 billion annually, boosting U.S. prices by as much as 12.9% if passed on, a report commissioned by the industry’s U.S. trade group and reviewed by Reuters shows.

The analysis, conducted by Ernst & Young, found the United States imported $203 billion in pharmaceutical products in 2023, with 73% coming from Europe -- primarily Ireland, Germany and Switzerland. Total U.S. sales of finished pharmaceuticals that year were $393 billion.

The report, dated April 22 and not made public, was commissioned by the main U.S. pharmaceutical lobby, the Pharmaceutical Research and Manufacturers of America, whose members include Amgen AMGN.O, Bristol Myers Squibb, Eli Lilly LLY.N, and Pfizer PFE.N, among others.

PhRMA did not immediately respond to a request for comment. The group has argued tariffs would undermine efforts to boost domestic manufacturing, a goal of U.S. President Donald Trump.

Pharmaceutical products have long been spared from trade wars due to the potential harms, but he has repeatedly threatened a 25% tariff on pharmaceutical imports.