Tariffs Could Lead To Generic Drug Shortages

Trump Investigates Drug Imports: Experts Warn of Generic Shortages and Higher Costs

In today’s Politico article, President Trump has launched an investigation into drug imports, triggering a federal evaluation of how the U.S. sources and supplies medications. The government is now seeking public input on several key issues:

• Current and future demand for pharmaceutical drugs and ingredients

• Whether U.S. production can meet domestic needs

• The potential for export restrictions from other countries

• The economic impact of introducing drug tariffs

Why This Matters: Generic Drug Shortages Are a Real Risk

While the investigation focuses on boosting domestic drug production, experts warn that introducing tariffs without a clear plan could backfire—especially for generic drugs, which make up the majority of prescriptions in the U.S.

“If you have a 25% tariff but can’t pass that cost on to buyers, and your margin is only 10%, you can’t absorb it,” said Marta Wosińska, a healthcare economist at Brookings’ Center on Health Policy. “And so what do you do? You exit.” In other words, generic drug manufacturers may stop production, leading to dangerous supply shortages.

Medicaid Rebates Could Add Pressure

Adding to the concern, Medicaid inflation rebates may limit generic drug companies’ ability to raise prices in response to tariffs. This would further squeeze profit margins and make it even harder for companies to remain in the market.

Industry Leaders Are Speaking Out

In The Hill’s coverage of the story, Tom Kraus, Vice President of Government Relations at the American Society of Health-System Pharmacists (ASHP), said the issue is bigger than just price hikes:

“Our concern is actually less about price increases and more about generic manufacturers dropping out of the market,” said Kraus. “If costs go way up, they don’t have a lot of flexibility to increase price. For a generic drug, that could mean they stop making it—creating a shortage.”

RescueMeds Stands with Patients

At RescueMeds, we’re deeply concerned about anything that could reduce access to affordable medications—especially for injured workers and patients who rely on generic prescriptions. We will continue to fight for fair, transparent drug pricing and push back against any policy that jeopardizes patient care.