Navigating pharmaceutical tariffs: Preparing for price pressures and supply chain disruptions
Jamie Miller
Tariffs on imported pharmaceuticals are likely to lead to increased drug prices and potential shortages, impacting patients, providers and healthcare systems. While tariffs aim to protect domestic industries, public health experts anticipate that the costs of tariffs on imported drugs will likely be passed on to consumers, potentially increasing costs for families, insurance companies and government programs. This shift could have far-reaching implications for affordability, access and equity in healthcare delivery.
The U.S. pharmaceutical supply chain is highly globalized. Branded drugs are primarily imported from high-income countries such as Ireland, Germany and Switzerland, while generic drugs — which account for approximately 90% of all prescriptions filled in the U.S. — are mainly sourced from India and China.
Tariffs on these imports could lead to price increases, shortages and quality concerns, especially for generics with thin profit margins. These disruptions may disproportionately affect vulnerable populations who rely on low-cost medications.
Because many medications are imported, we expect tariffs to significantly affect drug pricing. For brand-name drugs, tariffs may raise prices for high-cost specialty medications.
Manufacturers might pass these costs to payers, impacting formulary design, rebate structures and overall plan affordability. Medicare Part D premiums could rise, affecting member access and adherence. For generic drugs, tariffs could exacerbate existing shortages. Some manufacturers may exit the U.S. market, forcing reliance on more expensive branded alternatives. Hospitals may face higher acquisition costs for essential generics, straining pharmacy budgets and procurement strategies.
These tariffs could impact both the health plan and the clinical enterprise. The health plan may face increased claims costs and premium pressures, along with challenges in maintaining formularies and preferred drug lists. The health system could experience rising pharmacy procurement costs, greater reliance on 340B pricing and group purchasing organizations (GPOs), and strain on budget forecasting and value-based care models. These financial pressures may require strategic adjustments to maintain quality and access while managing cost containment.
While tariffs may be intended to bolster the U.S. economy and incentivize domestic production, without careful implementation, they risk causing affordability and access issues for patients. Health plan and hospital leaders must stay proactive, informed and engaged to navigate this evolving landscape. This includes monitoring policy developments, assessing supply chain vulnerabilities and preparing contingency plans to protect continuity of care.
Collaboration across pharmacy, finance, supply chain and clinical teams will be essential to mitigate risks and adapt to changing market conditions. As the situation evolves, Geisinger will continue to evaluate the impact of pharmaceutical tariffs and advocate for solutions that protect patient access and system sustainability.
