On July 27, the European Union (EU) and the United States agreed to a comprehensive, though politically complex, trade framework designed to ease rising tensions and avert a full-blown trade war. The deal establishes a 15% tariff on all EU exports that were previously subject to reciprocal tariffs, which includes pharmaceuticals (certain generics are exempt). Historically, medicines have been exempt from tariffs, making this a notable change. Implemented on Aug. 7, the new tariffs could impact the practice of rheumatology in several ways.
Increased Drug Costs & Potential Access Issues
Tariffs on branded pharmaceuticals imported from the EU could lead to increased costs for these medications, potentially affecting patients with rheumatic disease who rely on them.
The pharmaceutical industry will either absorb these costs or pass them on to consumers through higher prices. Either scenario could impact patient access to essential rheumatology drugs, especially those with limited insurance coverage or financial resources. If out-of-pocket costs rise due to higher list prices and limited formulary coverage, patients may delay or skip treatments. This can lead to worse outcomes in chronic disease management and increase the burden of care later.
Independently owned rheumatology practices that buy-and-bill these drugs will be directly affected, adding to their increasingly burdensome overhead costs. If insurers don’t raise reimbursement rates, these providers may be forced to shift to lower-cost alternatives or stop offering certain therapies in-office.
Access & Supply Chain Risks
The tariffs may trigger supply chain shifts or stockpiling behavior, causing shortages or delivery delays, especially for niche or low-volume drugs. If the U.S. expands tariffs to include APIs (active pharmaceutical ingredients), even more medications could be affected. This could lead to significant disruptions in patient scheduling, rescheduled infusions and administrative burdens on rheumatologists to find alternative sources. It could also create uncertainty in the launch of new drugs developed in the EU and destined for the U.S. market.
Downstream Impact on Research & Development
The added costs associated with tariffs could negatively impact the resources pharmaceutical companies allocate toward researching and developing new therapies. This could potentially affect the development of new treatments and therapies for rheumatological conditions, which require significant investment in research and development.
Conclusion
The EU-U.S. trade deal’s tariffs on pharmaceuticals could lead to higher costs for rheumatologists and their patients, disrupt drug supply chains and potentially impact future research and development of new therapies for rheumatic diseases. The extent of the impact may vary depending on individual companies’ manufacturing locations and mitigation strategies, and the rapidly evolving nature of the administration’s trade policy introduces further uncertainty.
The ACR places a high priority on any policy or regulation that impacts drug pricing, the cost of providing high quality care and/or patient access to vital therapies. For further information about the ACR’s regulatory advocacy efforts, email the ACR’s advocacy team at [email protected]. ACR/ARP members can also schedule a time to meet directly with the ACR’s advocacy team to discuss issues and challenges you are facing.
Key Takeaways
- The European Union/U.S. trade deal includes a 15% tariff that applies to pharmaceuticals.
- The tariffs could impact the cost of providing care, patient access to therapies and drug research and development.
- More tariffs on pharmaceuticals may be coming.
