Risk Mitigation Planning For Pharmaceutical Tariffs

By Steve Kornher, PhD

Examine the potential ramifications of proposed tariffs on the pharmaceutical and biotechnology sectors, highlighting critical concerns regarding national security and supply chain stability. The analysis underscores the industry's heavy reliance on foreign sources for active pharmaceutical ingredients (APIs), which could exacerbate drug shortages and elevate manufacturing costs, particularly affecting vulnerable populations reliant on generic medications.

The imposition of tariffs risks contravening World Trade Organization agreements, further complicating compliance for companies already facing financial strain. Additionally, the anticipated disruptions to supply chains could hinder innovation and delay regulatory approvals, while companies may be compelled to cut research and development budgets, stifling the emergence of new treatments. To mitigate these adverse effects, consider strategic responses including alternative sourcing, stockpiling raw materials, and thorough risk assessments in collaboration with regulatory agencies.