Pharma firms may absorb any tariff hit

US tariffs on pharmaceuticals could eventually mean higher prices for brand-name medicines, but in the near term the costs would likely be absorbed by drugmakers rather than patients whose payments are often set by health insurance.

- 

US health insurers, which pay the bulk of prescription drug costs, act as a buffer between drugmakers and patients, with beneficiaries subject to co-pays and co-insurance based on the prices insurers negotiate with drugmakers.

"Patented drugs are already generally set at the price the market will bear, so in that sense manufacturers are not likely to substantially increase the prices of these drugs," said Melissa Barber, postdoctoral fellow at Yale University and an expert on drug pricing. On Monday, the Trump administration said in a regulatory filing it had opened a national security investigation into pharmaceuticals to show why the US needs tariffs to boost domestic manufacturing. Rates and timing remain uncertain, but the industry has been lobbying for phased-in tariffs, according to Reuters. The hit could be big. Close to $213 billion in pharmaceutical products were imported to the US last year, nearly triple 2014's $73 billion, according to the United Nations trade database.