On May 5, 2025, President Donald Trump announced plans to impose new tariffs on pharmaceutical imports within two weeks, aiming to reduce the United States’ reliance on foreign drug manufacturing. Simultaneously, he signed an executive order to expedite domestic pharmaceutical production.
Executive Order Highlights:
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FDA and EPA Directives: The Food and Drug Administration (FDA) is instructed to streamline the approval process for new pharmaceutical manufacturing facilities, while the Environmental Protection Agency (EPA) is directed to accelerate the construction of such facilities.
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Enhanced Oversight: The FDA will increase oversight of foreign active pharmaceutical ingredient producers and may publicly disclose non-compliant facilities.
These measures are part of a broader strategy to bolster national security by reducing dependence on imported pharmaceuticals, which currently account for over $200 billion annually in U.S. imports.
Industry Response:
Major pharmaceutical companies have responded to the impending tariffs by announcing significant investments in U.S. manufacturing:
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Roche: Plans to invest $50 billion over the next five years, creating over 12,000 jobs.
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Merck: Allocating $1 billion to build a new facility in Delaware for its cancer drug Keytruda.
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Novartis, Eli Lilly, and Johnson & Johnson: Also announced increased investments in domestic production.
Concerns and Criticisms:
While the administration emphasizes national security, industry experts warn that the tariffs could lead to higher drug prices and exacerbate existing shortages, particularly affecting generic drug manufacturers operating on thin margins.
