Updated Apr 4, 2018 - Economy

Trump's health care tariffs could raise drug costs

Sam Baker

A lot of U.S. drugs are made in China. Photo: Stanislav Krasilnikov\TASS via Getty Images

There are a lot of medical products on the Trump administration’s list of candidates for the new 25% tariffs it wants to impose on China, including vaccines; insulin products; MRI machines, surgical tools and other medical devices; and a host of raw ingredients for pharmaceuticals.

Why it matters: An enormous amount of the ingredients in American pharmaceuticals are made in China. As those prices rise, the cost of drugs could rise, too — and the impact could be especially dramatic for generics.

How it works: Brand-name drugs are more expensive, in part, because their sales subsidize research and marketing. For generics, on the other hand, the physical act of making the pill is a much bigger part of the manufacturer’s costs.

Between the lines: The Trump administration is eager to show progress on reducing the cost of prescription drugs, and one of its top priories is greater competition from generics.

Add Axios on Google

Trump's health care tariffs could raise drug costs

What to read next