SmartBrief readers in April turned their attention to stories on how US government-imposed tariffs could affect health care organizations and communities at home in the coming years, potentially leading to rising costs and compromising access to care. Readers also were interested in stories about Americans’ continuing struggles to afford that care at a personal level.
Turmoil over drug tariffs
What happened: An analysis from the Center for Infectious Disease Research and Policy looked at how a 25% tariff on Canadian-manufactured pharmaceuticals could raise US drug costs by as much as $750 million and place serious strain on supply chains. About 400 medications are imported to the US from Canada, and it is the only available source for nearly 30 of them.
Tariffs ultimately could make it harder for American patients to access medications they need, experts said. Researcher Mina Tadrous of the University of Toronto said the tariffs could affect a variety of important drugs, from antibiotics to mental health therapies. “Our work highlights that perhaps the US should consider removing medications from its list of imports, in line with previous tariffs, to avoid disruptions to supply chains and potential shortages that may affect US patients,” Tadrous said.
President Donald Trump said tariffs on imported medications likely would start at about 25% and could go even higher. Trump has stated that the tariffs are intended to drive drugmakers to move more of their operations to the US.
What’s next: There have been reports this month about some independent pharmacies stockpiling commonly dispensed drugs in an attempt to weather possible tariff-influenced cost fluctuations. If reimbursements don’t rise to counteract higher prices, some independent pharmacy owners may find the financial losses too serious to overcome.
Trump recently signed an executive order instructing federal agencies to redouble efforts to significantly reduce prescription drug prices by linking them to prices paid by other developed nations. A Harvard Business Review report offers big-picture information on the effects of tariffs on the nation’s prescription drug market.
Hospitals feeling the crunch
What happened: April reports suggested that high tariffs on Chinese goods, including medical supplies, could further unsettle American hospitals’ financial footing. Climbing patient costs, staff cuts, service disruptions and potential shortages would likely be among the consequences, and hospitals serving Medicare and Medicaid populations could be the most deeply affected. Some facilities were reviewing their existing supply contracts, performing cost surge modeling and inventory audits, and looking for alternative sources in an effort to mitigate any fallout.
What’s next: Hospitals started to feel ripple effects from medical supply tariffs earlier this month. No widespread shortages were reported at the time, but some hospitals were considering spending freezes and other actions. Service disruptions reminiscent of the COVID-19 pandemic could resurface, some experts suggested.
Cost hurdles impede care for millions
What happened: West Health/Gallup research showed that 91 million Americans – about 35% of the population – would not be able to afford quality health care if they needed it now. Rates are even higher among Hispanic and Black Americans, and health care access has declined significantly among lower-income residents, researchers found. About 11% of Americans overall are described as “cost desperate,” or entirely unable to afford prescriptions or health services.
What’s next: “The rising trajectory in the inability to pay for health care is a disturbing trend that is likely to continue and even accelerate,” said Tim Lash of the West Health Policy Center. “Policy action at both the state and federal level is urgently needed, or even more Americans will have to go without treatment or be forced to make painful tradeoffs between paying for medical care or paying for other necessities.”
A recent proposal to cut Affordable Care Act subsidies could result in several million Americans being dropped from their health insurance, making care affordability an even more pressing issue.
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