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Will tariffs hit pharmaceuticals?
While pharmaceuticals were spared the U.S. tariffs that shook world markets last week, the respite could be short-lived.
The news: Although pharmaceuticals were among the few goods avoiding immediate tariffs, which began Saturday and range from a 10% base to nearly 50%, President Trump predicted pharma tariffs “at a level that you haven’t seen before,” Reuters reported Friday.
What’s ahead: The U.S. Trade Representative was reportedly planning a 232 investigation to determine if pharmaceutical tariffs are warranted.
The impact: 94% of biotech firms anticipate surging manufacturing costs from tariffs on the EU, while tariffs on Canada and China would have a similar impact, a March survey of BIO members found. “More than 50% of biotech firms predict ‘increased difficulty’ in funding and conducting research if EU tariffs are enacted,” the survey said.
BIO’s view: “Re-onshoring key parts of the biotechnology supply chain to the U.S. and our allies and strengthening the American manufacturing base should be a high priority for both national and economic security. It will take years, though, for this shift and we need to be mindful of the negative consequences of these proposed tariffs,” said BIO President & CEO John F. Crowley.
Patient advocates, experts call for PBM reform
We need policy to improve patient access to drugs and address middlemen who drive up drug prices, according to participants in a March 27 conference organized by The Hill.
The Health Next Summit, sponsored by the Alliance for Aging Research and the National Pharmaceutical Council, covered a range of issues impacting healthcare access, including policy to reform pharmacy benefit managers (PBMs), middlemen who reduce drug access and increase prices.
“We've seen increases in utilization management abuse by Medicare payers and PBMs,” said Sue Peschin of the Alliance for Aging Research. “This is also showing up in the narrowing of prescription drug formularies, more requirements for prior authorization and step therapy.”
Saying he’s “passionate about PBM reform,” U.S. Rep. Buddy Carter (R-GA) said that House Speaker Mike Johnson (R-LA) promised legislation to increase PBM transparency would be included in the reconciliation bill currently under discussion.
PBMs drive up the price of drugs, said John M. O’Brien, President & CEO of the National Pharmaceutical Council: “We need as much innovation in how we pay for drugs as we do bringing new medicines to life.”
Reform is possible: PBMs “have been enabled by the Centers for Medicare and Medicaid Services’ lack of guardrails, but this can be fixed, and this is what we work on on a regular basis,” said Peschin.
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