Money, Meds, and Medicare

Tariffs on imported drugs threaten to drive up costs — and disrupt care

Fact checked by Shannon Sparks

The  pills that keep millions of Medicare beneficiaries moving through the day are rarely the simple, local products their bottles suggest. Instead, they are the result of a long, global relay: chemical precursors made in one country, active pharmaceutical ingredients (APIs) in another, and final packaging and tablet pressing in a third.

That process may be changing. 

The White House has signaled it could leverage trade policy to shift drug manufacturing back to the United States. In September 2025, the Trump administration announced that beginning Oct. 1, it would impose a 100% tariff on branded or patented pharmaceutical imports unless companies build U.S. manufacturing plants.

The shift matters to Medicare patients and drug access. According to government data, Medicare covers more than 69 million Americans, many of them older adults who rely on a handful of chronically used medications. Most Part D dollars go to a small number of drugs. 

“The most commonly prescribed drugs to Medicare recipients are generic drugs — things for cholesterol, for diabetes, for high blood pressure,” says Jennifer Halsey, PharmD, director of ambulatory pharmacy services at UI Health. In fact, she adds, generic versions of medications make up approximately 90% of all prescriptions filled in the U.S. “Almost all generic drugs are imported from India and China. Any tariff on goods from India or China that does not exclude prescription drugs will impact drug costs.”

“But if access to stable doses is disrupted, even small price increases could be disastrous for my patients.”

Medicare’s highest-cost and highest-volume medicines include blood thinners such as apixaban (Eliquis), diabetes and heart disease medications, and expensive injectables used in cancer and eye disease. Many oral generics rely on ingredients made overseas.

“The margins [for generics] are very low. So, tariffs will either increase the cost of the drug to the consumer, or the manufacturer may decide not to export drugs to the United States, leading to drug shortages,” Halsey says.

Brand-name drugs take a different path. “Many of them are made in Europe. Ireland is the top country — Germany and Switzerland also — because they have the most favorable tax rates for those types of companies,” Halsey says. “[The companies] have to decide whether to produce more drugs in the United States. That’s how you avoid the tariffs.”

Kimberly Dixon, MD, section chief of geriatric medicine at Cook County Health, says she hasn’t seen any major issues so far. “But if access to stable doses is disrupted, even small price increases could be disastrous for my patients,” she adds.

Access to stable doses keeps people out of the emergency department and hospital. “If medicines become less affordable or intermittent, it puts patients at risk — diabetes, congestive heart failure, COPD — and increases [the] burden on the healthcare system,” Dixon says.

This past open enrollment season may have exacerbated uncertainty. “Patients may be transitioning between plans, and clarity about formularies and coverage is essential,” Dixon says. “Even with stable pricing, transparency is key for older adults navigating these changes.”

Dixon highlights the role of financial assistance programs, saying, “Some patients rely on manufacturer assistance for high-cost drugs, like blood thinners. It’s a hidden solution that works now but would be fragile if tariffs or pricing instability hit.”

Tariffs, costs, and system readiness

Experts point out that the timing of any disruptions depends on how the government phases in tariffs and grants exceptions for specific drugs. Many proposed tariffs have since been reversed, delayed, or carved out, but the future remains uncertain.

“We will start to see the impact in six months if the tariffs aren’t reversed,” Halsey says. “Currently, there’s a 15% tariff on brand names made in Europe and a 10% to 25% tariff on certain products from China. Some analyses suggest a 25% tariff could raise U.S. drug costs by double-digit percentages.”

Health systems are already planning contingencies. “Organizations are budgeting for tariffs — anywhere from 20% to 100%,” Halsey says. “But not many hospitals can absorb that, especially already financially stressed rural hospitals and those with significant numbers of charity care patients.”

Dixon highlights broader systemic concerns. “It’s an unstable situation. 

We aren’t aware of contingency plans for tariffs, but other issues like food assistance changes may have more immediate impact on older adults than small drug price shifts,” she says. “[Cook County Health’s] mission to provide care regardless of ability to pay helps mitigate risk, but volatility still poses challenges for patients navigating coverage and access.”

The debate over tariffs exposes a central tension in U.S. drug policy: how to shore up supply chains and domestic manufacturing without raising patients’ costs.

“We are putting the tariffs in place now, but the solution is still five years away,” Halsey says. “The cost to produce drugs here is higher, and building facilities takes years.”

Experts point to alternatives, such as targeted manufacturing incentives, tax credits, streamlined regulatory pathways, and strategic stockpiling of key medicines.

For Medicare beneficiaries, staying informed and engaged with their plans is more important than ever. How patients, providers, and policymakers respond now could shape access and affordability for years to come.

Originally published in the Winter/Spring 2026 print issue.