Customers could face more expensive generic drugs or other healthcare services if China and the U.S. trade tensions continue to escalate, experts and advocates warn.
Included in the list of products that the Trump administration proposes hitting with $50 billion worth of tariffs are raw ingredients for drugs and vaccines, MRIs, and other healthcare products.
The generic drug industry is especially worried it could be hit hard by the tariffs. Most drugs prescribed in the U.S. are generic, which are cheaper copies of brand name products.
“We are concerned that the proposed tariffs may lead to increased costs of manufacturing for generics and biosimilars and thus higher prescription drug prices for patients in the U.S.,” said Jeffrey K. Francer, senior vice president for the generic drug lobby Association for Accessible Medicines.
Unlike a brand name drug, a generic drug does not have research or development costs. Much of the cost in making a generic drug is in the manufacturing process, and more than 80 percent of the raw ingredients used in the drugs come from India or China.
“Patients who use generic drugs may see a bump in price as drug makers pass along their increased costs due to the tariffs,” according to an analysis from the website The Street.
The advocacy group Patients for Affordable Drugs criticized the proposed move by Trump, who has promised to tackle high drug prices.
“For an administration that wants to lower drug prices, this would do the exact opposite,” said executive director Ben Wakana. “We are eager to read the comprehensive set of recommendations the administration promised to release in the next few weeks, but the tariffs announced yesterday would be a step in the wrong direction. It’s a tax that would raise prices on prescription drugs.”
The Trump administration says the tariffs are being imposed in retaliation for intellectual property theft in the country. The administration also charges that China engages in a practice that forces industries to transfer their technology to China.
In response, China announced a new series of proposed tariffs valued at roughly $50 billion on Wednesday.
Last month, the Trump administration imposed steel and aluminum tariffs on all countries with seven exceptions. China has retaliated to that move with tariffs on $3 billion worth of U.S. goods.
