Latest news with #AssociationforAccessibleMedicines
Irish Times
21-04-2025
- Business
- Irish Times
US tariffs on pharmaceuticals risk shortages of lower-cost generic drugs
The generic drug industry has warned that US tariffs on pharmaceuticals risk causing shortages of medicines including cancer treatments, and that manufacturers might stop making products that become unprofitable as a result. Generic medicines, which are cheaper versions of drugs that no longer have patent protection, make up about 90 per cent of US drug supply. The majority are manufactured outside the US, in lower-cost countries such as India. The active ingredients used in the products often come from China. So far, pharmaceuticals have avoided the wide-ranging new US tariffs. But president Donald Trump has repeatedly said he plans to apply them to the sector, and the US commerce department this week has said it is investigating the national security implications of pharmaceutical imports. The department has up to nine months to publish its conclusions but commerce secretary Howard Lutnick said tariffs could happen sooner, in the 'next month or two'. READ MORE John Murphy, chief executive of the Association for Accessible Medicines, a US lobby group, said tariffs would not benefit patients or improve the security of the healthcare system. He said older injectables, such as chemotherapy for cancer, were 'particularly vulnerable'. 'For those generics already sold at a very narrow margin, you could see a situation where it becomes financially infeasible for certain products to be brought to market if they are going to lose money,' he said. Mr Murphy said he was lobbying the White House for the industry to be treated differently, arguing that there were other ways to encourage more onshoring of production, and that imposing costs on an industry that was already struggling with capital investment would not work. 'Where does the capital come from to shift production if we're already at barely the cost of goods? . . . And potentially underwater in the short term because of tariffs,' he added. The US healthcare system already struggles with supplies for some particularly low-margin products: the number of active drug shortages hit an all-time high of 323 in the first quarter of last year, according to the American Society of Health-System Pharmacists, the largest association of pharmacy professionals in the US. Mark Samuels, chief executive of the British Generic Manufacturers Association, said the costs of tariffs would be difficult to absorb because fierce competition meant prices were already 'significantly constrained' and so there would be 'potential for more shortages'. India would be particularly badly hit by pharmaceutical tariffs. It has a 20 per cent share of the global export of generic drugs and a 60 per cent share in the supply of low-cost vaccines, according to the Indian Pharmaceutical Alliance. Some in the industry say US tariffs could drive some Indian manufacturers out of business. 'Indian pharma products will become more expensive in the US market which may result in substantial loss in market share for our Indian pharma companies,' B Partha Saradhi Reddy, chair of generic company Hetero and an MP in India's upper house, said in March. This could reduce the profit margins for low-cost generic medicines, making them uncompetitive and 'not viable' for the companies making them, he said. Premier, a group purchasing organisation that buys drugs for more than 4,000 US hospitals, said there could be an increase in shortages. But it said its three-year contracts meant generic manufacturers were locked into prices, adding they often include provisions that drugmakers who fail to supply have to cover the cost of buying alternatives. Tariffs are also likely to drive up prices for consumers. Dutch bank ING estimates that a 24-week prescription for a generic cancer drug could cost $8,000 to $10,000 more if 25 per cent tariffs are imposed. Stephen Farrelly, global head of pharma and healthcare at ING, said the people who would be 'hardest hit' were those without insurance, who paid for their own drugs, though people with health insurance could face higher premiums down the line. Prashant Reddy, co-author of The Truth Pill, a book about India's pharma industry, said the US often had little choice but to buy from India. 'A lot of these drugs are not made anywhere else. They are shooting themselves in the foot because it's just going to raise prices in the US,' he said. – Copyright The Financial Times Limited 2025
CNN
16-04-2025
- Business
- CNN
Trump's tariffs could make it harder to get certain generic drugs
President Donald Trump's promise to impose tariffs on pharmaceutical imports is raising red flags among generic drugmakers and industry experts, who warn that such a move could lead to increased drug shortages and higher prices. Generic drug manufacturers have had to contend with increasing competition and tight profit margins in recent years. Slapping extra costs through tariffs could undermine their ability to do business with the US, especially since it could be tougher for them to recoup the added expense than manufacturers of brand-name drugs, experts say. 'You're going to have companies … (for which) the financial outlook is so dire, they may not be able to bring the product into the United States,' John Murphy III, CEO of the Association for Accessible Medicines, the trade group for generic and biosimilar medicine, told CNN. 'And that could amplify the drug shortages concerns we have here in the United States.' Currently, there are 270 active drug shortages in the US, down from an all-time high of 323 in early 2024, according to data from the American Society of Health-System Pharmacists. Shortages of antibiotics are a particular problem. Some 40% of generic drugs have only one or two companies making their ingredients, so it's a 'pretty fragile supply,' Rena Conti, an associate professor at the Boston University Questrom School of Business, told CNN. If one manufacturer exits, it could be harder to get the drugs — potentially posing a challenge for pharmacies and hospitals. If multiple manufacturers stop production, prices could rise. As a result, patients could have trouble finding a pharmacy that can immediately fill their prescription, Conti said, though it may not happen for several months since pharmacies typically lock in their supplies well in advance. These supply contracts may delay the impact of any changes sparked by the tariffs, but ultimately many Americans could be affected because generic drugs make up about 90% of the medicines prescribed in the US. 'The pain will ultimately be borne by the consumer, by the patient,' said Arthur Wong, managing director for US health care practice at S&P Global. The Trump administration has not revealed details about the tariffs it intends to impose on pharmaceutical imports, which were exempt from the tariffs he levied in his first term. But now, the president says he feels that he must take action to spur more drug manufacturing in the US, which is also his reasoning for imposing tariffs on other industries. 'We're going to have our drugs made in the United States, so that in case of war, in case of whatever, we're not relying on China and various other countries, which is not a good idea,' Trump told reporters on Sunday. And he is moving forward with that effort. The administration has launched an investigation into pharmaceutical imports to set the stage to impose tariffs on national security grounds, according to a notice posted to the Federal Register on Monday. The probe must be completed within 270 days, though the results could be released sooner. Meanwhile, Commerce Secretary Howard Lutnick said Sunday on ABC News that the tariffs would be announced in the next month or two. Tariffs on pharmaceutical imports from India and China will be especially consequential for the US, since manufacturers in those countries produce a large share of the ingredients for generic drugs, experts say. What's more, the tariffs will not push drugmakers to shift more operations to the US, some contend. 'Given the complexity of the Pharma supply chain, we do not expect the industry to make any major changes,' wrote Evan Seigerman, a pharmaceuticals analyst with BMO Capital Markets, in a recent research note. Tariffs could actually have the opposite effect of stalling more drug manufacturing in the US, one industry official said. 'If large tariffs are imposed, they will trigger substantially more drug shortages, cause greater US dependence on China for life-saving medications, and delay Indian companies' investments in America,' Kathleen Jaeger, US spokesperson for the Indian Pharmaceutical Alliance, said in a statement.
CNN
16-04-2025
- Business
- CNN
Trump's tariffs could make it harder to get certain generic drugs
President Donald Trump's promise to impose tariffs on pharmaceutical imports is raising red flags among generic drugmakers and industry experts, who warn that such a move could lead to increased drug shortages and higher prices. Generic drug manufacturers have had to contend with increasing competition and tight profit margins in recent years. Slapping extra costs through tariffs could undermine their ability to do business with the US, especially since it could be tougher for them to recoup the added expense than manufacturers of brand-name drugs, experts say. 'You're going to have companies … (for which) the financial outlook is so dire, they may not be able to bring the product into the United States,' John Murphy III, CEO of the Association for Accessible Medicines, the trade group for generic and biosimilar medicine, told CNN. 'And that could amplify the drug shortages concerns we have here in the United States.' Currently, there are 270 active drug shortages in the US, down from an all-time high of 323 in early 2024, according to data from the American Society of Health-System Pharmacists. Shortages of antibiotics are a particular problem. Some 40% of generic drugs have only one or two companies making their ingredients, so it's a 'pretty fragile supply,' Rena Conti, an associate professor at the Boston University Questrom School of Business, told CNN. If one manufacturer exits, it could be harder to get the drugs — potentially posing a challenge for pharmacies and hospitals. If multiple manufacturers stop production, prices could rise. As a result, patients could have trouble finding a pharmacy that can immediately fill their prescription, Conti said, though it may not happen for several months since pharmacies typically lock in their supplies well in advance. These supply contracts may delay the impact of any changes sparked by the tariffs, but ultimately many Americans could be affected because generic drugs make up about 90% of the medicines prescribed in the US. 'The pain will ultimately be borne by the consumer, by the patient,' said Arthur Wong, managing director for US health care practice at S&P Global. The Trump administration has not revealed details about the tariffs it intends to impose on pharmaceutical imports, which were exempt from the tariffs he levied in his first term. But now, the president says he feels that he must take action to spur more drug manufacturing in the US, which is also his reasoning for imposing tariffs on other industries. 'We're going to have our drugs made in the United States, so that in case of war, in case of whatever, we're not relying on China and various other countries, which is not a good idea,' Trump told reporters on Sunday. And he is moving forward with that effort. The administration has launched an investigation into pharmaceutical imports to set the stage to impose tariffs on national security grounds, according to a notice posted to the Federal Register on Monday. The probe must be completed within 270 days, though the results could be released sooner. Meanwhile, Commerce Secretary Howard Lutnick said Sunday on ABC News that the tariffs would be announced in the next month or two. Tariffs on pharmaceutical imports from India and China will be especially consequential for the US, since manufacturers in those countries produce a large share of the ingredients for generic drugs, experts say. What's more, the tariffs will not push drugmakers to shift more operations to the US, some contend. 'Given the complexity of the Pharma supply chain, we do not expect the industry to make any major changes,' wrote Evan Seigerman, a pharmaceuticals analyst with BMO Capital Markets, in a recent research note. Tariffs could actually have the opposite effect of stalling more drug manufacturing in the US, one industry official said. 'If large tariffs are imposed, they will trigger substantially more drug shortages, cause greater US dependence on China for life-saving medications, and delay Indian companies' investments in America,' Kathleen Jaeger, US spokesperson for the Indian Pharmaceutical Alliance, said in a statement.
Axios
15-04-2025
- Business
- Axios
Pharma tariffs could be a generics problem
The looming prospect of American tariffs on pharmaceuticals would likely hit generic drugmakers the hardest, Johnson & Johnson's CFO told Bloomberg today. Why it matters: 90% of prescriptions are generic drugs or biosimilars, according to the Association for Accessible Medicines, which represents generic drugmakers. Catch up quick: The Trump administration on Monday announced an investigation into drug imports in a likely precursor to tariffs, which the president has promised as a way to boost American production. But J&J CFO Joe Wolk said the probe — which is centered on impacts to U.S. national security — would likely show that most U.S. drug imports are generics, not the type of complex brand-name treatments made by J&J. By the numbers: About 80% of generics are finished in foreign countries, with even more getting their active pharmaceutical ingredient from outside the U.S., according to Stephen W. Schondelmeyer, co-principal investigator of the Resilient Drug Supply Project at the University of Minnesota's Center for Infectious Disease Research and Policy. 32 of the top 100 brand-name drugs are finished in the U.S. Zoom in: J&J management downplaying the impact of tariffs is "an important positive development for perception about the threat to JNJ and the branded biopharma industry at large," Leerink Partners analyst David Risinger writes today in a research note. Yes, but: J&J CEO Joaquin Duato warned on an earnings call Tuesday that " tariffs can create disruptions in the supply chain leading to shortages." He called for tax policy changes to bolster American drug manufacturing instead of tariffs. Carrots vs sticks Alex Schriver, senior VP of public affairs at PhRMA, the pharmaceutical industry's trade group, said this week in a statement that "we share President Trump's goal of revitalizing American manufacturing, and our members continue to expand their U.S. footprint, driven in part by tax policies President Trump put in place during his first term." He added that "medicines have historically been excluded from tariffs because they can lead to higher costs and shortages of life-saving medicines." J&J itself has cited the U.S. tax policy changes in 2017 as a driver for $55 billion in planned investments in the U.S. over the next four years, in part to bolster manufacturing. The Association for Accessible Medicines did not respond to a request for comment.
Yahoo
09-02-2025
- Business
- Yahoo
China makes some of Americans' most common medicines. They won't be spared from Trump's tariffs
President Donald Trump's broad 10 percent tariff on China could drive up the cost, or cause shortages, of popular generic medicines such as antibiotics or cancer treatment drugs for consumers in the United States, experts have warned. Ordinary painkillers, psychoactive medications, blood thinners, heart medications, antihistamines, antibiotics and diuretics are just some of the essential medications that the U.S. relies on China to manufacture. In 2023, the U.S. spent more than $2.02 billion on these kinds of imports from China alone, according to the U.S. Trade Commission. Trump's additional 10 percent tax on Chinese imports, without an exemption for this, could disrupt the pharmaceutical and medical supply chain, which could lead to shortages or force companies to increase the cost of generic drugs to consumers. In a letter to Trump, the American Hospital Association pleaded with the president to exempt medical equipment and pharmaceuticals from his tariffs, saying the possibility of shortages could put patients 'at significant risk of harm, including death.' 'Tariffs, as well as any reaction of the countries on whom such tariffs are imposed, could reduce the availability of these life-saving medications and supplies in the U.S,' the group wrote. 'For example, U.S. providers import many cancer and cardiovascular medications, immunosuppressives, antibiotics and combination antibiotics from China.' 'Generic manufacturers simply can't absorb new costs,' John Murphy III, the president and CEO of the Association for Accessible Medicines said in a statement. 'Our manufacturers sell at an extremely low price, sometimes at a loss, and are increasingly forced to exit markets where they are underwater. The overall value of all generic sales in the U.S. has gone down by $6.4 billion in five years despite growth in volume and new generic launches. Tariffs would make this much worse,' Murphy said. China supplies the U.S. with approximately 30 percent of its active pharmaceutical ingredients, the raw ingredients found in medicines that make them function, according to the American Hospital Association. China also is one of the U.S.'s main source of medical equipment and devices such as single-use blood pressure cuffs, stethoscope covers, anesthesia instruments and more. Nearly one-third of disposable face masks and almost all plastic gloves come from China. 'For many patients, even a temporary disruption in their access to these needed medications could put them at significant risk of harm, including death. Carefully planned chemotherapy treatments and antibiotic schedules are essential to giving patients the best chance of overcoming their disease. Similarly, the provision of necessary cardiovascular medications must be continuous to preserve their cardiovascular health,' the American Hospital Association said. For the last 10 years, the U.S. has become increasingly reliant on foreign countries for pharmaceuticals or medical equipment because it is less expensive to manufacture overseas. Though tariffs may incentivize the U.S. to begin manufacturing its own drugs, it will not happen overnight and as a result, shortages can occur. But the long-term effects of the tariffs – whether that's shortages or increased drug costs – will not be tangible for several months, Dr. Aaron Kesselheim, a professor of medicine at Harvard Medical School whose research focuses on prescription drugs, told NBC News.
