As the U.S. imposes steep tariffs and considers others, including floating a 250% tariff on pharmaceutical imports, the American Society of Health-System Pharmacists said getting a firm sense of the effect tariffs have on drug shortages could be challenging.
Even as the total number of active drug shortages has declined for five quarters, according to the ASHP’s most recent report, the organization said it may be difficult to ever know if current shortages have been caused by tariffs taking effect.
“I think the FDA does a pretty strong job of tracking discontinued products, but you never know the true underlying reason of why a product was discontinued,” Michael Ganio, PharmD, senior director of pharmacy practice and quality at the ASHP, said in an interview with Becker’s. “So if a tariff goes into effect, the manufacturer may choose just to stop making the drug, but they may never disclose that the reason for discontinuing it is because of tariffs.”
This lack of transparency makes it difficult to attribute future drug shortages directly to economic or policy pressures such as tariffs. Although the FDA tracks discontinued and recalled products, sometimes manufacturers will not provide detailed information on why they pulled back production. Dr. Ganio said this can get complicated when dealing with older, low-margin generic drugs that already struggle to remain profitable.
“A lot of these products have very slim profit margins. We’re talking older drugs that are 20 to 30 years old. Especially for injectable medications, there’s a lot of overhead expense and by the time you factor all that in, in a lot of cases these drugs are making very little as far as revenue or margin,” he said. “Now you add on a tariff, and if the price is not allowed to rise — which there are penalties for some of these drugs — if the price rises faster than the rate of inflation, the manufacturer may choose just to stop making the drug, but they may never disclose the reason for discontinuing.”
In an Aug. 5 interview with CNBC, President Donald Trump said he would begin with a “small tariff” on pharmaceuticals, followed by increases to 150% and eventually 250% within 18 months.
