The pharmaceutical industry’s fear of being hit with extremely high levies related to national security was soothed by President Donald Trump’s trade deal with the European Union, according to reports.
The trade agreement will impose a 15% tariff on imported medicines from Europe. That’s much lower than the taxes of up to 200% Trump had threatened, The New York Times reported.
Despite the lower percentage, the tariffs are expected to add billions of dollars in expenses for the drug industry, which may pass on charges to customers for some medicines, the Times added. That could mean higher out-of-pocket costs and higher health insurance premiums.
Newsmax reached out to the White House for comment on the reported possibility of higher drug prices as a result of the trade deal with the EU.
Europe is among the biggest sources of branded drugs and their ingredients for the U.S., which saw about $50 billion of U.S. pharma imports from Ireland alone last year, Axios reported.
Botox, the cancer medication Keytruda, and popular weight-loss drugs like Ozempic are among drugs manufactured in Europe.
Wall Street analysts said the tariff deal could cost the pharmaceutical industry between $13 billion and $19 billion.
“I don’t see anyone doing anything until we see that these deals are worth the paper that eventually they’re going to be written on,” Marc Busch, a Georgetown University authority on international trade policy, told Axios.
Even at the 15% range, the tariffs will significantly affect European firms and the bloc’s broader economy, CNBC reported.
“The questions around pharma tariffs are highly material, given the volume of imports from the EU,” Wolfe Research analysts wrote in a note Monday.
One industry professional, Ryan Maizel, senior director of advisory services at Model N, suggested that pharmacy benefit managers (PBMs), third-party administrators of prescription drug benefits for health insurers, will start “to have conversations with manufacturers about increasing those prices.”
Trump earlier this month said a tariff announcement on pharmaceutical imports into the U.S. would come “very soon” and could run as high as 200%. The announcement came after the administration launched a so-called Section 232 investigation into the sector, which explores the impact of pharma imports on national security, with the outcome due by August, CNBC reported.
Reuters contributed to this story.
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