If you’ve been reading Just Care or the news about the Trump reconciliation bill, you already know that Americans are likely to face higher drug costs. You might not know, however, that Trump’s 15 percent EU tariff could drive up the cost of prescription drugs even higher. The tariff will go into effect after a national security investigation, reports Daniel Payne for Stat News.
The US reached a trade agreement with the EU last weekend. Under the agreement, all EU products will face a 15 percent tariff after a national security investigation. Pharmaceutical products are the largest export from Europe to the US. A national security investigation, which precedes the imposition of the tariff, is designed to understand the consequences of US reliance on critical products from abroad.
Notwithstanding President Trump’s earlier claims to the contrary, the president of the European Commission made clear the agreement includes prescription drugs and products. The administration now confirms that there will be a 15 percent tariff on prescription drugs.
Pharmaceutical companies understandably are looking into the implications of the tariff. In the past, prescription drugs have not been included in tariffs. It’s as yet unclear to what extent the tariff will affect access to medicine, but it is fair to assume that it will drive prescription drug costs up further in the US,
Pharmaceutical companies will feel the effects of the tariff differently, depending upon the extent to which they manufacture pharmaceuticals abroad and rely on pharmaceutical imports. And, president Trump still could decide to hold off imposition of the tariffs on pharmaceutical companies willing to move manufacturing of their products to the US.
Some believe that the Trump administration could use the tariff as a negotiating tool to force drug companies to lower drug prices, giving them a choice between paying the tariff or lowering drug prices voluntarily. Time will tell.
Here’s more from Just Care:
- Tariffs will likely drive drug prices higher and create drug shortages
- Medicare Part D drug costs: What to expect in 2025
- Online pharmacies can save you money
- Case study: Costco saves one couple hundreds of dollars over Medicare Part D
- GAO finds US drug prices more than four times those in France
