Trump’s new executive order threatens drug pricing in other countries: A spokesman says the problem isn’t going to go away
Drug companies would be forced to match the lower prices paid in other countries under an executive order from President Donald Trump.
On May 12, Trump signed an executive order asking drugmakers to bring down the prices Americans pay for prescriptions, to put them in line with prices in other countries.
Meanwhile, pharmacists predict even the 10% tariffs Trump has demanded will hurt: Jolley said a potential increase of up to 30 cents a vial is not a king’s ransom, but it adds up when you’re a small pharmacy that fills 50,000 prescriptions a year.
There are multiple parts to the new executive order. It directs the U.S. Trade Representative and Department of Commerce to take action against “unreasonable and discriminatory policies” that lower drug prices abroad, though it’s not clear what authority the White House has in this regard. It also directs Health and Human Services Secretary Robert F. Kennedy Jr. to facilitate direct–to-consumer sales that bypass health insurance at lower prices.
“We’ve been going to subsidize other countries throughout the world because we’re paying higher prices,” Trump said at the White House Monday.
In addition to getting cheaper knockoff drugs faster, European countries also pay far less than the United States for brand-name products. Paradoxically, Murphy said, those same countries pay more for generics.
In the basement of a pharmacy in Salt Lake City, there are rows of pill bottles, each lined with one man’s defensive wall.
Jolley bought six months’ worth of the most expensive large bottles, hoping to shield his business from the 10% across-the-board tariffs on imported goods that President Trump announced April 2. Jolley fears that the prices of the medications that are in those bottles will increase with the threats of additional tariffs.
Narrowly focused tariffs might work in some cases, said Marta Wosińska, a senior fellow at the Brookings Institution’s Center on Health Policy. For example, while drug manufacturing plants can cost $1 billion and take three to five years to set up, it would be relatively cheap to build a syringe factory — a business American manufacturers abandoned during the COVID-19 pandemic because China was dumping its products here, Wosińska said.
He said that it’s not going to be like they’ll go back and say, well, here’s your 10% increase due to the 10% tariffs. “Costs are gonna go up and then the sluggish responses from the PBMs — they’re going to lead us to lose more money at a faster rate than we already are.”
Independent pharmacists such as Jolley find themselves on the frontline of a tariff storm because they are squeezed by insurers and middlemen. Drugmakers, doctors, wholesalers, and sidles oppose most tariffs.
“Big ships don’t change course overnight,” said Robin Feldman, a UC Law San Francisco professor who writes about prescription drug issues. It will take some time to get manufacturing up and running. The key is to not cause any damage to the industry or consumers.
“They will leave China when they hear that,” he said. In the year of 2024, the US imported $213 billion worth of medicines from China, India, Europe and other countries.
Scott Pace, a pharmacy co-owner in Little Rock, said that the word “uncertainty” is the only word that would describe tariffs at the moment.
Pharmaceutical Stockpile Most Common Drugs on Chance of Targeted Trump Tariffs: “Why I Cannot Go to Mar-a-Lago to Talk to the President on My Own”
“I’ve identified the top 200 generics in my store, and I have basically put 90 days’ worth of those on the shelf just as a starting point,” he said. “Those are the diabetes drugs, the blood pressure medicines, the antibiotics — those things that I know folks will be sicker without.”
Unlike other retailers, pharmacies can’t pass along such costs to patients. Health insurers and pharmacy benefit managers mostly owned by insurance conglomerates act as middleman between drug makers and buyers.
“You’ve got real estate in North Texas that’s cheaper than real estate in Shenzhen,” he said at an economic conference April 25 in Washington, referring to a major Chinese chemical manufacturing center.
Many of the active ingredients in American drugs are imported. Fresenius Kabi, a German company with facilities in eight U.S. states to produce or distribute sterile injectables — vital hospital drugs for cancer and other conditions — complained in a letter to U.S. Trade Representative Jamieson Greer that tariffs on these raw materials could paradoxically lead some companies to move finished product manufacturing overseas.
He hopes word gets through, and his group has tried to explain the complexity to Trump officials. “We’re not PhRMA,” Murphy said, referring to the powerful trade group primarily representing makers of brand-name drugs. “I am not able to go to Mar-a-Lago to talk to the president on my own.”
Source: Pharmacists stockpile most common drugs on chance of targeted Trump tariffs
How do European governments cope with the emotional roller coaster? – John Barkett, the Biden administration’s domestic policy council member, tells KFF Health News
Fresenius Kabi also makes biosimilars, the generic forms of expensive biologic drugs such as Humira and Stelara. The last developed country where biosimilars can be found, is the US, because of laws that are more generous to the original patent holders.
John Barkett, a member of the Biden administration’s Domestic Policy Council, says that European governments tend to have more stable contracts with makers of generics than the United States.
“How do I solve the problem of caring for my community,” he said, “but not being subject to the emotional roller coaster that is dispensing hundreds of prescriptions a day and watching every single one of them be a loss or 12 cents profit?”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling and journalism.