Tariffs could threaten medicine innovation, industry bodies warn

A new industry survey from the Biotechnology Innovation Organization (BIO) has highlighted the vulnerability of supply that proposed tariffs would put on medicines, and its impact on patient access.

According to the findings, nearly 90 percent of US biotechs rely on imported components for at least half of their products approved by the US Food and Drug Administration (FDA). This makes supply of medicines vulnerable especially to proposed tariffs on the EU, China, and Canada, according to BIO.

Conducted last month, survey respondents expect that tariffs will bring:
• A significant number of biotechs (94 percent) anticipate a surge in manufacturing costs if tariffs are put in place on import trade from the EU, thereby decreasing access to affordable medicines.
• Proposed tariffs on the EU would force half of companies to find new research and manufacturing partners. Fifty percent of respondents shared that their regulatory filings would need to be revised or potentially delayed, threatening the progress of innovation.
• Eighty percent of biotech companies reported needing at least one year to source alternative suppliers. Just less than half of respondents (44 percent) stated they would need over two years to action this.

“This survey demonstrates the far reaching and potentially damaging impacts of the proposed tariffs on our biotechnology industry… Re-onshoring key parts of the biotechnology supply chain to the US and our allies and strengthening the American manufacturing base should be a high priority for both national and economic security. It will take years, though, for this shift and we need to be mindful of the negative consequences of these proposed tariffs. We look forward to working with the Administration and Congress to develop incentives and policies that drive private sector dollars to spur a renaissance of US biotech manufacturing,” stated BIO President and CEO John Crowley.

Impact of trade barriers on healthcare systems

Recently, the International Generic and Biosimilar medicines Association (IGBA) emphasised “the critical importance of these interconnected supply chains in the generic and biosimilar medicines industry cannot be overstated”.

The industry body explained that disruption to the production network for generic and biosimilar medicines is “especially concerning as off-patent medicines manufacturers operate in a highly competitive market with a limited capacity to absorb additional costs”.

“Trade barriers pose a direct threat to this intricate system, potentially leading to reduced access for patients, increased costs, delays, and ultimately, medicine shortages… We have already seen the negative impact of supply chain vulnerabilities, and further disruptions could have devastating consequences both for patient’s access to life saving treatments and for the sustainability of the healthcare financial system,” commented Susana Almeida, Secretary General of IGBA.

As such, IGBA is pushing for trade policies that promote economic growth while safeguarding medicines access.