How Tariffs Might Impact Drug Pricing and Access

Pharmaceutical Executive: What effect will the tariffs have on drug pricing and patient access?
Arda Ural: Over the last 20 years, our industry has taken advantage of the global, integrated economy. The vast majority of global companies, they either fully or partially moved their R&D facilities to the US, where they could take advantage of the global network and taxes offered by specific jurisdictions. This is not a new thing, the industry has adjusted to a fully global operating ecosystem.

Now, this recent shock and the potential implications are making everyone think about that means very broadly, and specifically for pricing and patient access. There might be a point that once the 90-day pause expires by mid-July, you may see two things. First, a cost increase as a result of these importation taxes, which will either be absorbed by the companies or passed on to the consumer.

If they absorbed, this will add pressure on the margins, especially for the generic products. There are implications that these margin pressure could lead to discontinuation of certain products, which can lead to drug shortages. Those are significant downstream implications. The prices will be passed through intermediaries. If you’re selling to a hospital system, it’s going to be through purchase organizations. If you’re selling through a payer, it’s going to be part of the contract negotiations. Prices won’t be immediately affected, but the impact on the margins will have impact for pharmaceutical companies.