Trump promised to slash Americans’ drug prices by 1,500%, but his latest move could raise them higher than ever. Trump recently threatened 200% tariffs on imported drugs — a massive shift for an industry that has long operated with little to no import duties.
“A tariff would hurt consumers most of all, as they would feel the inflationary effect … directly when paying for prescriptions at the pharmacy and indirectly through higher insurance premiums,’’ wrote Diederik Stadig, a health care economist with ING [1].
Trump says his goal is to bring pharmaceutical factories back to the U.S., noting that U.S.-made drugs wouldn’t face the steep tariffs. But the reality is more complicated.
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How could it impact the pharmaceutical industry?
Americans already pay more for prescription drugs than people in most other countries — nearly three times as much, according to a RAND study [2]. Tariffs of this size could drive prices even higher, especially once stockpiles of imported medicine run low.
Trump has said the tariffs won’t take effect until late 2026, giving companies time to prepare. Analysts believe the actual rate could be negotiated down, but even a 25% tariff could gradually raise U.S. drug prices by 10% to 14% as supplies dwindle [1]. Many drugmakers are already stockpiling and increasing imports to buy time.
The timing is interesting, since many drug makers are already investing in U.S. production. Johnson & Johnson announced in March of this year that it plans to invest more than $55 billion in the U.S., including building four new manufacturing plants [3]. In April, Roche, a Swiss drug maker said that it would invest $50 billion in expanding its U.S. operations over the next five years [4].
Still, building pharmaceutical plants in the U.S. can take years, and many drugs still rely on foreign-made ingredients. Jacob Jensen, trade policy analyst at American Action Forum, notes that “97% of antibiotics, 92% of antivirals and 83% of the most popular generic drugs contain at least one active ingredient that is manufactured abroad.’’ [1]
That reliance means tariffs could hit generic manufacturers especially hard. Unlike brand-name companies with large profit margins, generic drugmakers may not be able to absorb the extra costs. Some could exit the U.S. market altogether — a major concern, since generics account for 92% of U.S. prescriptions.
And some experts say that for this to work, the entire system will need to be revamped.
“In an ideal world, we would be making everything that’s important only in the U.S. But it costs a lot of money … We have offshored so much of our supply chains because we want to have inexpensive drugs. If we want to reverse this, we would really have to redesign our system.” says Marta Wosiska, a health policy analyst at the Brookings Institution [1].
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How to save on prescription drugs
While the true tariff rate is yet to be seen, this news is unsettling for many Americans who rely on medication to treat medical conditions and, in some cases, simply stay alive. Fortunately, even if drug prices rise, Americans still have ways to manage costs:
Choose generic when possible
Generic drugs generally contain the same active ingredients as brand-name medications, but they typically cost 80% to 85% less [5]. Even if tariffs squeeze supply, choosing generics over brand-name drugs can help keep costs down. If your doctor prescribes a brand-name drug, ask if a generic or lower-cost therapeutic alternative could work just as well.
Use discount programs
Prescription discount cards and apps, such as GoodRx, SingleCare, or manufacturer savings programs, can help you compare prices across pharmacies and find lower costs — even if you have insurance. Some pharmacies also offer membership programs that provide additional savings on common prescriptions.
Consider mail-order pharmacies
Mail-order services, often through your insurance plan, allow you to order a 90-day supply at once, often at a lower per-pill cost than monthly refills. This option is especially helpful for managing long-term conditions like high blood pressure, diabetes, or asthma, where consistent medication is needed.
Check insurance options
Insurance coverage can make a big difference in out-of-pocket costs. Private insurance, Medicare, and Medicaid all have different formularies (lists of covered drugs). During open enrollment, compare plans to see which covers your prescriptions at the best rate. If your current plan has high copays, switching could save hundreds a year.
Finally, don’t be afraid to talk to your doctor or pharmacist. If tariffs are imposed, they can be the first line of defense in keeping your medication affordable. They may be able to prescribe a lower-cost alternative or connect you with assistance programs offered by drug manufacturers.
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[1]. 6ABC Action News. “Trump plans a hefty tax on imported drugs, risking higher prices and shortages”
[2]. RAND. “Prescription drug prices in the U.S. are 2.78 times those in other countries”
[3]. AP News. “Johnson & Johnson plans $55 billion in US investments over the next four years”
[4]. AP News. “Swiss pharmaceuticals company Roche announces $50B investment in US over next 5 years”
[5]. John Hopkins University. “Generic vs. brand name and the cost of bad news”
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