Tariffs Threaten to Upend Americans’ Access to Medicine

Policymakers in Washington are once again contemplating new tariffs—this time on pharmaceuticals and their ingredients. As the Department of Commerce works to complete its examination of the use of tariff power, proponents argue that import taxes are necessary to protect domestic manufacturing and ensure national security. The truth is that taxing medicines will raise costs for patients, shrink supply, and undermine the very security they claim to defend.

Tariffs are taxes. If the federal government imposes steep tariffs on imported medicines and active pharmaceutical ingredients (APIs), Americans will pay the price. For example, a 25 percent tariff would add more than $51 billion per year to the cost of pharmaceuticals, while tacking an additional $15 billion onto the costs of domestic production. That means higher out-of-pocket costs for patients and less money available for innovation and investment.

At a time when healthcare access and affordability are already major concerns for families, adding another layer of taxation is terrible for Americans’ budgets and health.

While robust supply chains are certainly important for national security, the United States already produces 64 percent of the finished pharmaceutical products consumed domestically, representing $251 billion worth of output. More than half of the APIs used in American medicines are sourced domestically, and nearly a quarter of U.S. pharmaceutical production is exported abroad. Far from being dependent, the U.S. is a global leader in pharmaceutical production.

Of the medicines imported by the U.S., nearly three-quarters come from trusted allies, including the European Union, the United Kingdom, and Switzerland. Only about 3 percent originate in China. These supply chains allow companies to adapt quickly when problems arise in one country by sourcing elsewhere. The 2022 baby formula crisis illustrated this point. With 98 percent of the supply produced domestically, a single disruption led to widespread shortages, which were resolved only after the government turned to international trade.

Tariffs create ripple effects throughout the economy. Higher input costs make U.S. companies less competitive, slow productivity, and reduce output. Jobs are lost while consumers pay more and face the consequences of supply shocks. History is filled with examples of tariffs that were supposed to protect industries but ended up harming the broader economy instead.

The legal foundation for such tariffs is shaky, at best. Section 232 of the Trade Expansion Act of 1962 allows the President to impose tariffs only when there is a genuine national security threat. It is not a tool for general economic policymaking. The Constitution makes clear that taxing authority resides with Congress, and courts have consistently struck down attempts by the executive branch to stretch its powers beyond what Congress intended. Using Section 232 to set broad economic policies is not a sustainable approach to implementing the Trump Administration’s healthcare agenda.

Free-market policies, by contrast, make medicines more affordable, supply chains more resilient, and American producers more competitive. Patients gain better access to therapies, businesses are able to innovate, and the healthcare system benefits in the long run.

Policymakers must consider the risks of any policy that would make our supply chains more brittle and susceptible to disruption. Punitive pharmaceutical tariffs would do just that and unnecessarily risk America’s economy, security, and health.