Organizations react to administration's new tariffs
Several organizations, including the Association for Accessible Medicines, the National Retail Federation, the Healthcare Distribution Alliance and National Association of Manufacturers reacted swiftly to the Trump administration's new tariffs on Canada and China.
The tariffs on imports from Canada, Mexico and China were set to take effect Feb. 4, though a last minute deal with Mexico will delay tariffs on Mexico until March, giving the two time to negotiate.
“The global supply chain for generic and biosimilar medicines is critically important for U.S. patients. From the base ingredients to the finished products, U.S. medicines rely on a global supply chain that is already stressed and in need of strengthening.” said John Murphy III, president and CEO of the Association for Accessible Medicines. “Tariffs on products from Canada, Mexico, and China could increase already problematic drug shortages.”
“Generic manufacturers simply can’t absorb new costs. 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.”
[Read more: AAM displeased with Medicare Drug Price Negotiation list]
“Americans pay less for generics than almost anywhere in the world but are facing growing challenges of drug shortages. The previous Trump Administration opted not to impose tariffs on generic and biosimilar manufactures. AAM and its members urge the Administration to follow their past practice and work with our industry on constructive policies and regulatory reforms that will bolster the resiliency and vibrancy of this critical healthcare market to the benefit of the American economy, lower overall healthcare costs, and keeping America’s patients healthy.”
The National Retail Federation executive vice president of government relations David French issued the following statement: “We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America.
“But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses.
“The retail industry is committed to working with President Trump and his administration to achieve his campaign promises, including strengthening the U.S. economy, extending his successful Tax Cuts and Jobs Act, and ensuring that American families are protected from higher costs.”
The Healthcare Distribution Alliance also issued a statement on the tariffs: “The Healthcare Distribution Alliance and its nearly 40 distributor members — the vital link between 1,200 healthcare manufacturers and approximately 330,000 providers — strongly believe that strategic investments in domestic manufacturing can bolster supply chain resilience. However, we respectfully urge caution on instituting tariffs on sectors that will impact medical products. Tariffs on pharmaceuticals would strain the pharmaceutical supply chain and could adversely affect American patients, whether through increased medical product costs or manufacturers leaving the market. Accordingly, we ask the administration to consider establishing exemptions for pharmaceutical products and long implementation timelines to maintain the safe and efficient delivery of approximately 10 million medicines and healthcare products every day.
[Read more: Challenges continue, but generics companies see a bright future with biosimilars]
“We are concerned that placing tariffs on generic drug products produced outside the U.S. will put additional pressure on an industry that is already experiencing financial distress. Distributors and generic manufacturers cannot absorb the rising costs of broad tariffs. It is worth noting that distributors operate on low profit margins — 0.3 percent. As a result, the U.S. will likely see new and worsened shortages of important medications and the costs will be passed down to payers and patients, including those in the Medicare and Medicaid programs.
“HDA supports strategic federal investments to boost domestic manufacturing of medical products, such as active pharmaceutical ingredients, key starting materials and finished-dose medicines for greater supply chain resilience. To this end, we encourage President Trump and his administration to explore long-term strategic investments and incentives for domestic manufacturing that will augment the availability and safe and affordable medicines. HDA will continue to work with the administration to help ensure patients can obtain the medications they need, safely and efficiently.”
To read HDA’s full policy position on tariffs for pharmaceutical products, click here.
The National Association of Manufacturers president and CEO Jay Timmons released the following statement: "Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge.
“At the same time, protecting manufacturing gains that have come from our strong North American partnership is vital. The success of President Trump’s landmark trade agreement, the United States-Mexico-Canada Agreement, has strengthened North American supply chains and bolstered economic power across the region, boosting jobs, wages and investments here in the United States. Thanks to this agreement, one-third of critical U.S. manufacturing inputs now come from Canada or Mexico, rather than from competitors like China that often engage in unfair trade practices.
“However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.
“We stand ready to work with President Trump to ensure a trade strategy that reinforces American strength—holding bad actors accountable while preserving the gains of the successful USMCA and advancing policies that sustain manufacturing growth here at home.”