February 3, 2025
NBC News recently published an article featuring Rena Conti, Associate Professor of Markets, Public Policy, and Law, discussing how President Trump’s 10% tariff on Chinese imports is expected to increase the cost of generic drugs in the U.S. and worsen drug shortages.
About half of generic drugs, including cancer medications and antibiotics, are made overseas, with 80% of active ingredients coming from China and India. Tariffs can disrupt supply chains, leading to shortages and price hikes, which may take months to materialize due to existing contracts. Some drugmakers can’t absorb the added costs, prompting stockpiling by hospitals and pharmacies, which could worsen disparities. While protections like anti-price gouging laws and taxes on rapid price increases exist, experts warn that tariffs are unlikely to boost domestic generic production.
“So if any manufacturer wants to go ahead and increase their prices, they’re going to pay a different tax on the other end if they do so,” Conti adds.
Overall, drug prices are expected to increase over time, with U.S. reliance on foreign suppliers remaining a challenge.
