Page 185 - CW E-Magazine (4-3-2025)

Special Report

partner for medicinal and pharmaceuti- on a global supply chain that is already Tariffs are seen by the Administration as
cal products, according to information stressed and in need of strengthening… a way to realize a broader policy goal of
from Eurostat, the EU’s statistical and .“Generic manufacturers simply can’t increasing US competitiveness, including
informational body. In 2023, EU absorb new costs. Our manufacturers sell in manufacturing. While in line with the
exports of medicinal and pharmaceutical at an extremely low price, sometimes at larger goal to support US-based manufac-
products to countries outside the EU a loss, and are increasingly forced to exit turing overall and specifi cally for pharma-
reached €277-bn ($290-bn), with the markets where they are underwater. The ceuticals, HAD points to the need to do
US accounting for approximately one- overall value of all generic sales in the so through investments and incentives to
third or €92-bn ($96-bn). US has gone down by $6.4-billion in fi ve boost US-based manufacturing. “HDA
years despite growth in volume and new supports strategic federal investments to
Tariffs and pharma generic launches. Tariffs would make this boost domestic manufacturing of medi-
The plan for reciprocal tariffs fol- much worse.” cal products, such as active pharmaceu-
lows recent moves in trade policy from tical ingredients, key starting materials
the US government through executive Those concerns of higher costs in and fi nished-dose medicines for greater
action. On February 3, 2025, the US a margin-constrained environment for supply-chain resilience. To this end, we
announced tariffs on US imports from generic drugs were also voiced by the encourage President Trump and his Ad-
Canada and Mexico of 25%, which was Healthcare Distribution Alliance (HAD), ministration to explore long-term stra-
later removed, but imposed a 10% tariff which represents pharmaceutical distri- tegic investments and incentives for do-
on US imports from China. butors in the US. “We are concerned that mestic manufacturing that will augment
placing tariffs on generic drug products the availability of safe and affordable
For all industries, including the produced outside the US will put addi- medicines. HDA will continue to work
pharmaceutical industry, tariffs present tional pressure on an industry that is with the Administration to help ensure
additional costs and have to be taken already experiencing fi nancial distress,” patients can obtain the medications they
in account in overall supply-chain con- said HAD in a February 2, 2025, state- need, safely and effi ciently.”
siderations. “The global supply chain ment when commenting then on the
for generic and biosimilar medicines is imposition of broad tariffs on US im- Also, HDA has recommended to exempt
critically important for US patients,” said ports from Canada, Mexico and China. pharmaceuticals from changes in tariff
John Murphy III, President and CEO of “Distributors and generic manufacturers policy as a means to maintain needed
the Association for Accessible Medi- cannot absorb the rising costs of broad supply-chain resiliency. In its February 2,
cines, which represents generic-drug and tariffs. It is worth noting that distributors statement, HDA said it “urge[s] caution
biosimilar manufacturers, in a February operate on low profi t margins – 0.3%. As on establishing tariffs that broadly
3, 2025 statement, when fi rst comment- a result, the US will likely see new and impact medical products. Accordingly,
ing on the fi rst tariff imposed on Canada worsened shortages of important medica- we ask the Trump administration to
and Mexico (which were later removed) tions and the costs will be passed down consider exempting pharmaceutical pro-
and China. “From the base ingredients to to payers and patients, including those in ducts to maintain reliable healthcare
the fi nished products, US medicines rely the Medicare and Medicaid programs.” delivery.”
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Chemical Weekly March 4, 2025 185

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