Tariffs expected to raise imported drug costs: 4 notes – Becker’s Hospital Review | Healthcare News

A trade deal between the U.S. and the European Union will impose a 15% tariff on imported medications from Europe, setting the stage for potential cost increases for pharmaceuticals, The New York Times reported July 29. 

Here are four notes:  

1. The tariff amount is lower than the 200% levy previously threatened by President Donald Trump. However, it still marks a significant cost burden on pharmaceutical imports. The 15% tariff rate is set to be applied to both finished drug products and active ingredients imported from Europe.
2. Europe manufactures 43% of the active ingredients used in brand-name drugs consumed in the U.S. While the drugs often come with patent protection — making them less vulnerable to drug shortages — the drugs are more susceptible to price shifts. 

   Some generic drugs made in Europe will be exempt from the tariff, Ursula von der Leyen, president of the European Commission, said July 27. However, experts warned even limited tariffs on generic drugs could worsen supply shortages because Europe produces 18% of active ingredients used in U.S. generics.

3. While the 15% tariff spares European pharmaceuticals from national security related duties under Section 232, other suppliers, such as India and China, may still be targeted in the next wave. Some of the nation’s most widely used and profitable medications are produced in Europe, including Botox, Keytruda and Ozempic, which may see a price increase as a result of the new levy.
4. The added expenses for drugmakers are expected to cost billions and many are expected to pass costs onto employers, Medicare and other payers. As a result, patients could see higher out-of-pocket costs and increased health insurance premiums, especially for those with deductibles or coinsurance. Insurers in New York, Oregon and Maryland have already cited tariffs in requests for premiums for 2026.