Trump’s Next Tariffs Target Could be Foreign-Made Pharmaceuticals
The most recent and more expensive drugs are more likely to be made in the United States or Europe. Ireland, in particular, has become a hub because it is a fiscal paradise.
Many of the greatest successes in the sector are at least partially manufactured in Ireland. Among these are: Keytruda, Merck cancer drug; Zepbound, the weight loss drug of Eli Lilly; And the anti -inflammatory drug of Stelara, Johnson & Johnson used for conditions such as arthritis.
Mr. Trump noticed. “This beautiful island of five million people had the entire American pharmaceutical industry in its reach”, he ” he said in March in a meeting With Prime Minister Micheal Martin of Ireland.
Why did the production of drugs in the United States move abroad?
US production of pharmaceutical products has reached the peak, for a measure, In 2006.
This was in the period in which a wave of best -selling drugs of American drugs lost the protection of patents, creating opportunities for generic producers in India and China to increase the production of generics. In the same period, the incentives of the United States government to production in Puerto Rico were gradually eliminated, while new carrots, such as the tax advantages in Ireland, encouraged producers to move production abroad.
In 2021, most of the generic drugs consumed by America, as well as key antibiotics and antiviral, did not have an American structure that produced their active ingredients, second to Clarivate.
Trump said on Wednesday that “the United States can no longer produce enough antibiotics to treat our sick”.
For example, almost all the world sites that produce the active ingredient of the amoxicillin, a common antibiotic, are in China, India or Europe, according to Clarivate.
A Tennessee plant, now owned by a company called Usantibiotics, used to provide almost all the amoxicillin consumed in the United States. Now it matters the active ingredient from Europe and uses it to formulate pills. The plant now provides about 5 percent of American amoxicillin.
Did drugs be subject to rates before?
The drugs are generally protected from rates in the context of an agreement of the World Trade Organization aimed at protecting the access of patients to vital drugs. The rates that Mr. Trump imposed on certain imports in his first term did not hit pharmaceutical products.
Starting from February, drug producers that import active ingredients made to China in the United States had to pay a rate that Trump has imposed on Chinese assets. That rate went up to 20 percent in March. (Wednesday’s withdrawals add a new rate of 34 % on most Chinese imports, although this does not apply to medicines.)
Will the rates lead to drug deficiencies?
For producers of generic cheap drugs with thin profit margins, the additional costs of the rates could be “a turning point” that pushes them to leave the market, said Erin Fox, an expert from the University of Utah who keeps trace of drug deficiency.
Dr. Fox said she was very worried about drugs for which deficiency are already common, such as generic drugs administered as an injection. These injections are more difficult to make than the pills and are much less profitable than the most recent drugs, discouraging the producers from jumping. An example is lidocaine, used to numb pain during medical procedures. Most of the active ingredient production of lidocaine are in India, according to Clarivate.
