When U.S. President Donald Trump threatened hefty tariffs on imported pharmaceuticals, he pitched it as a move to lower drug prices and strengthen America’s supply security. But just days after the announcement, healthcare stocks dipped across the country, signaling industry concern.
On July 31, Trump challenged the CEOs of 17 top pharma firms to slash prices within 60 days or face consequences, with tariffs potentially reaching 200 percent. The bold ultimatum aimed to reshape a market plagued by high costs and perceived overreliance on foreign suppliers.
In response, major players unveiled plans to pour at least $250 billion into U.S. manufacturing and R&D. Johnson & Johnson committed $55 billion, Eli Lilly pledged $27 billion to build four new plants, and AstraZeneca earmarked $50 billion for expanded drug production on U.S. soil.
Yet experts warn that global supply chains and soaring domestic expenses could undercut these investments. Erin Fox, associate chief pharmacy researcher at the University of Utah Health, tells China Media Group that many raw materials and finished drugs come from worldwide sources, and no single executive order can instantly reroute a complex network.
High construction and operating costs for new U.S. plants, Fox adds, make long-term investment a risky bet—which is only amplified by tariff uncertainty. Building a modern facility can take several years and may never recoup astronomical upfront expenses.
Stephen Farrelly, head of Global Healthcare at ING and cited by CNN, points to labor, energy and transport costs that far exceed those abroad. He predicts that under steep import duties, generic makers with razor-thin profit margins are likelier to exit the U.S. market than to relocate factories back home.
As the 60-day deadline approaches, questions remain: Will domestic buildup ease price pressures? Or will American patients and producers bear the brunt of higher costs? The world is watching.
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Experts doubt Trump's drug tariffs will lower prices or boost security
cgtn.com
