Pharmaceutical imports to the U.S. skyrocketed in March, as drugmakers rushed to stock up ahead of potential tariffs on their products. Historically exempt from such tariffs, pharmaceuticals saw an unexpected surge, totaling over $50 billion for the month. This represents about 20% of all pharmaceutical imports for 2024, according to a report released by the U.S. Commerce Department on Tuesday.
Spike in Imports from Ireland
The biggest contributor to this increase came from Ireland, the largest exporter of drugs to the U.S. Imports from Ireland surged, helping the country surpass China in trade surplus with the U.S. for the first time in March. Imports from Ireland jumped by about $15.5 billion from February, with pharmaceuticals making up the majority of that increase.
“While it was expected that consumer goods would account for much of the rise in imports, pharmaceutical products accounted for $20 billion of the increase, nearly all imported from Ireland,” said Matthew Martin, senior economist at Oxford Economics.
Trump’s Threat of Tariffs on Pharmaceuticals
President Donald Trump has threatened to impose tariffs on pharmaceuticals as part of his broader trade policy, aiming to boost domestic drug production. Last month, his administration launched a probe into pharmaceutical imports, potentially classifying foreign reliance on drug production as a national security threat.
Trump has promised to announce a decision regarding these tariffs within the next two weeks, in addition to signing an executive order to reduce the regulatory burden on U.S. drug manufacturing.
Drugmakers Stockpiling Ahead of Tariffs
In response to the tariff threat, drugmakers have been taking proactive steps to mitigate potential disruption. Some have opted to send more medications by air to the U.S. to ensure timely delivery. Pfizer CEO Albert Bourla mentioned in a recent investor call that the company had increased its inventory each month to ensure it is well-prepared for the tariffs.
Similarly, Merck has moved enough inventory of its blockbuster cancer drug Keytruda — much of which is produced in Ireland — to ensure steady supply through the end of the year.
Impact on Global Trade Partners
Beyond Ireland, other countries at risk from these potential tariffs include Singapore and Switzerland, both major exporters of pharmaceuticals to the U.S. According to Oxford’s Martin, these nations could face significant impacts should U.S. tariffs be imposed on drug imports.
