Prescription drugs have been exempt from tariffs in the past. But Donald Trump looks poised to change that as early as April 2. That could result in shortages for critical drugs for Americans, warn experts.
Bupropion, used to treat major depressive disorder; ibalizumab, for patients with multi-drug-resistant HIV; and sotalol, to treat a life-threatening heart rhythm problem: those are just some of the drugs mostly manufactured in Canada and sent to the U.S. that might be impacted by the tariffs.
A research letter published in JAMA Monday looking into the potential impact on tariffs on Canadian pharmaceuticals identified hundreds of drugs made in Canada for the U.S. market. Dozens of those drugs are only, or predominantly, manufactured in Canada, say the authors.
“These drugs are vital to Americans, but they’re also importantly shipped from Canada. And so these tariffs might have implications in the future on the supply chain and how Americans get these specific drugs,” said Mina Tadrous, a professor at the University of Toronto and one of the letter’s authors.
“I don’t think people will be dropping dead on the streets, but a lot of [these drugs] are like HIV treatments that help extend peoples’ lives,” Tadrous said.
“The quality of care for patients will be hurt.”
Canada manufactures an estimated $3 billion US in pharmaceuticals for the American market each year, the authors say. A U.S.-imposed tariff of 25 per cent on Canadian-made prescription drugs would add $750 million US in costs for buyers – which could trickle down the supply chain to pharmacies and consumers.
Tinkering with fragile supply chains
Canada is not the only — or even the largest — manufacturer of drugs for the U.S. In fact, Canadian-made drugs make up a very small percentage of the drugs sold in the U.S.: 1.9 per cent, from the fourth quarter of 2022 to the third quarter of 2023, according to the authors of the JAMA article.
But any disruption to the delicate supply chains for medications — if manufacturers, say, change how much they produce or distribute — can have an outsized impact, say experts like Tadrous.
In the past, even small shifts in the supply chain have resulted in drug shortages — and Americans have been running out of prescription drugs more often since the COVID-19 pandemic. It got so bad in 2023, a Senate Homeland Security Committee examined the growing shortages as a national security threat.
If tariffs are put in place as early as April 2, patients and pharmacists might start seeing an impact in a matter of weeks, said David Zgarrick, a professor emeritus of pharmacy at Northeastern University in Boston.
“We are kind of treading in new waters here, so to speak, but it’s pretty easy to see a scenario where it could be very difficult for pharmacies, for patients, for health-care providers, if we were to just simply start putting tariffs on all medications,” Zgarrick said.
Impact on Canadian market
The tariffs would hit Americans hardest at first — but Canadians would not be spared if the tariffs remain in the long term.
“Shortages do not pay attention to borders when these supply chains are global,” Tadrous said,
“The concern is, as this sort of ripples around the world and more tariffs are placed by the Americans, not just on Canada but Europe and potentially China and India, we’re starting to see a supply chain that might tighten even further.”
The drugs that are at highest risk of running short in Canada, Tadrous says, include IV drugs and other products used in hospital settings, as well as those that are used for very small populations.
Much like cars, different parts of each drug usually come from across the world, Tadrous says.
“For a drug to end up on our shelves here in Canada, it probably has components from five different countries. And so you can imagine if we’re starting to put tariffs on each other and counter-tariffing, that becomes very challenging to navigate.”
It can take months to years to build a single manufacturing site, and building a single new drug could take up between three to four years, Tadrous says. Building domestic resilience takes years, and it would be smart to start planning now, he says.
“If [tariffs] are enacted on pharmaceuticals, then we need to, as Canadians, start thinking about actions to preserve and protect our supply chain, even more than we’ve been doing now.”