A cure worse than the disease? Trump's pharma tariffs portend paralysis instead of progress

US President Donald Trump says his proposed pharmaceutical tariffs are about national security. But in trying to reduce America's reliance on foreign drug manufacturing, he may end up endangering the very system he seeks to protect.

On May 5, Trump signed an executive order to fast-track domestic pharmaceutical production. It instructs the US Food and Drug Administration to streamline approvals for US-based manufacturing, remove regulatory hurdles, and increase inspection fees for foreign facilities. The agency is also tasked with tightening enforcement of active- ingredient disclosures, especially for those sourced overseas.

The order tees up a dramatic policy shift. Within weeks, Trump has promised to roll out a new 25 percent tariff on imported pharmaceuticals.

The rationale may sound reasonable. In a post-pandemic, geopolitically fraught world, reducing dependence on foreign supply chains feels like prudent risk management. Fewer imports, more local production, tighter control. In theory, it's a formula for greater security.

But in practice, it's a recipe for disruption.

A global, not local, puzzle

The US pharmaceutical supply chain is among the most globalized and interdependent systems in the world. Active ingredients, raw materials and specialized manufacturing steps are spread across dozens of countries.

Trying to rewire this complex network with blunt tariffs is like performing surgery with a sledgehammer.

Drugmakers, patient advocacy groups and global trade bodies are already raising alarms.

John Crowley, chief executive officer of Biotechnology Innovation Organization, warns that tariffs could drive up drug prices and restrict access to essential medicines. For generic drug manufacturers, who operate on razor-thin margins, the financial blow could render entire product lines unsustainable.

The result? Fewer generics, less competition and inevitably, higher prices at the pharmacy.

The Association for Accessible Medicines echoes those concerns. It cautions that tariffs on imports from key suppliers like Canada, Mexico and China could exacerbate shortages of critical drugs – shortages that already affect cancer treatments, antibiotics and pediatric formulations. A fragile system could fracture.

Ironically, some of the strongest resistance to Trump policy comes from the very companies the policy aims to support.

Industry alarms

Eli Lilly Chief Executive David Ricks has called the proposed tariffs a "pivotal moment" in health-care policy. While he acknowledges the benefits of greater supply chain resilience, he calls the method misguided. Tariffs, he argues, will saddle companies with higher costs that will either be passed on to consumers or absorbed by corporate cuts in jobs and funding for research and development.

Pfizer Chief Executive Albert Bourla is equally worried. While agreeing on the need for a more secure drug supply, he doubts that tariffs will help. The New York-based company said it expects to incur US$150 million in additional costs from these measures this year alone – a hit large enough to trigger strategic shifts.

Bourla warns that effective long-term investment depends on predictability. What businesses face now is paralysis.

Even companies with substantial US operations aren't insulated. Eli Lilly has invested billions in domestic facilities, yet it still depends on plants in Ireland and Italy for critical production steps. Ricks is skeptical that tariffs will incentivize relocation, especially if they make US manufacturing less competitive.

And a broader risk looms large: a policy meant to bolster national security may ultimately weaken it.

What tariffs won't do

Tariffs may restrict imports, but they won't build factories, train workers or conjure up supply chains overnight. Instead, they could increase risk by concentrating production in fewer, more expensive domestic sites that take years to ramp up.

Drugmakers are scrambling to respond. Some are lobbying for phased implementation of the 25 percent tariff; others are eyeing production shifts away from high-tariff regions like Ireland and India. But pivoting takes time and depends on a stable, rational policy environment. At the moment, that's missing.

Multinational players like Johnson & Johnson, AstraZeneca, Novo Nordisk and Roche are especially vulnerable, given their sprawling overseas networks. Even companies with a more diversified footprint, like Sanofi or Merck, are being forced to rethink global strategies amid rising protectionism.

Let's be clear: No one is arguing against pharmaceutical supply chain security. The pandemic exposed the fragility of global distribution. But the solution isn't to tear down a functioning, if imperfect, system. It's to fortify it.

Strategy, not slogans

What's needed is precision, not punishment.

If the Trump administration truly wants to increase domestic pharmaceutical production and improve supply chain resilience, there are smarter ways to achieve those goals.

Targeted tax credits could directly incentivize domestic investment. Public-private partnerships could help fund advanced manufacturing hubs, especially for critical drugs and the active pharmaceutical ingredients used to make them. Such efforts would build capacity while sharing risk.

At the same time, federal grants could support workforce training and automation, making US-based production more competitive over time. The Federal Drug Administration could accelerate regulatory reviews for domestic facilities without compromising safety, using risk-based assessments and streamlined pathways. And rather than disrupt current supply, the government could bolster strategic stockpiles of essential medicines most vulnerable to disruption.

These steps would build resilience without collateral damage.

At the heart of this issue lies a simple but crucial premise: Pharmaceutical security isn't about geography; it's about resilience. That means having multiple sources – domestic and international – and designing systems that can pivot under pressure. It means rewarding long-term investment and innovation, not reacting with policy whiplash.

Tariffs won't future-proof America's drug supply. A thoughtful mix of industrial strategy, global cooperation and targeted investment might.

If the goal is to protect the future of pharmaceuticals, the challenge isn't punishing today's supply chain. It's in designing one that survives tomorrow's shocks.

That will require strategy, not slogans. Collaboration, not confrontation. And wisdom, not a 25 percent tax.

(The author is an adjunct research fellow at the Research Center for Global Public Opinion of China, Shanghai International Studies University, and founding partner of 3am Consulting, a consultancy specializing in global communications. He has no conflict of interests to declare.)