Trump eyes steep pharma tariffs, threatening higher drug costs and shortages

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President Donald Trump has signaled plans to impose new tariffs on pharmaceuticals imported from the European Union (EU), possibly increasing to 200% after a gradual ramp-up phase targeting a transition to domestic manufacturing.

“Probably at the end of the month, and we’re going to start off with a low tariff and give the pharmaceutical companies a year or so to build, and then we’re going to make it a very high tariff,” Trump told reporters.

President Donald J. Trump
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The tariffs, part of the administration’s broader efforts to pressure foreign governments and manufacturers to move production to U.S. soil, are expected to disproportionately affect drugs manufactured in Ireland, Germany, Belgium and Italy — among the largest sources of prescription drug medications for U.S. patients.

Essential drugs on the line

More than half of the brand-name drugs prescribed in the U.S. are imported, and over 80% of generic prescriptions rely on ingredients or manufacturing capacity abroad, primarily in Europe, India and China. That leaves many of the most commonly prescribed therapies — from antibiotics to blood pressure medications — vulnerable to price hikes or disappearing altogether.

Physicians already grappling with the intermittent shortages of widely used generics may soon see more frequent disruptions. According to a Health Affairs article by Aaron Kesselheim, M.D., a professor at Harvard Medical School, tariffs that raise production costs could shrink profit margins on generics to the point that some manufacturers exit the market, worsening supply challenges.

The burden at the counter

Higher drug prices would likely hit patients directly — especially seniors and those managing chronic conditions. Nearly one in four Americans already report skipping doses or not filling prescriptions due to cost, according to the Kaiser Family Foundation (KFF).

Even so, the ripple effects don’t stop there. Public payers like Medicare and Medicaid cover nearly half of all U.S. drug spending, meaning that tariff-driven increases would add pressure to government health budgets.

Private practices could also feel the impact as patients defer care, stretch medications or turn to physicians to navigate insurance coverage denials.

And while the administration has argued that the tariffs would incentivize domestic drug manufacturing, reducing dependency on foreign sources, rebuilding a full pharmaceutical supply chain in the U.S. would take years.

Trump has paired the tariff push with a revived proposal for a “most favored nation” drug pricing model, which would peg U.S. prices to those paid by the lowest-paying wealthy country. But similar efforts during his first term failed to gain traction, and the new executive order lacks clear enforcement mechanisms.

What’s next?

The President has not yet finalized the EU-specific tariff, but he has signaled that action could come as early as August 1, following a pause in his broader “reciprocal tariff” program. He has also floated import taxes on pharmaceuticals from other regions, including India and China.

For physicians, the consequences could be immediate and close to home. Rising costs, strained formularies and new gaps in drug availability may land squarely in the exam room, where physicians are already tasked with finding affordable and effective treatments. Physicians may find themselves on the front lines of yet another policy-driven disruption to the prescription drug pipeline.