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May 6, 2025
Stephen Astle Director, Defense Industrial Base Division
Office of Strategic Industries and Economic Security
Bureau of Industry and Security
United States Department of Commerce
Submitted via Regulations.gov
Re: Comments on Section 232 National Security Investigation of Imports of Pharmaceuticals andPharmaceutical Ingredients [Docket No. 250414-0065, XRIN 0694-XC120]
Dear Director Astle:
On behalf of the Diabetes Patient Advocacy Coalition (DPAC) and the Diabetes Leadership Council(DLC), we appreciate the opportunity to provide comments on the Bureau of Industry and Security’sSection 232 investigation into the national security implications of imports of pharmaceuticals andactive pharmaceutical ingredients (APIs).
DPAC is an alliance of people with diabetes, caregivers, patient advocates, health professionals, andothers working together to support public policy initiatives to improve the lives of all 38 millionAmericans with diabetes. As an organization run by and for people with diabetes, DPAC seeks to ensurequality of and access to care, medications, and devices for people living with diabetes. DLC unitesformer leaders of national diabetes organizations, dedicated to securing effective, affordable health carefor every person with diabetes.
We are extremely concerned that tariffs on pharmaceuticals and APIs will severely limit patients’ abilityto access the medicines they need at an affordable price, and will hamper the development of new,innovative medicines. Therefore, we ask that the Department focus its inquiry on specific, evidencebased national security risks and avoid tariffs that would have unintended and harmful consequences onpatients and the U.S. health care system. Our specific concerns are outlined in more detail below.
Tariffs could interrupt patient access to medications by creating and exacerbating drug shortages.Medicines are critical components of patient care prescribed by licensed health care professionals totreat specific medical conditions that are often time-sensitive and life-threatening. Medicines areselected for a patient based on a number of factors including clinical efficacy, safety profile, andindividual patient needs, so a patient cannot typically choose a substitute. For chronic conditions such as diabetes, there are relatively few medicines, and those that do exist are highly specialized and notinterchangeable.
The United States primarily imports medicines from allied countries such as Ireland, Switzerland, andthe United Kingdom. While nearly two-thirds of all medicines consumed in the United States by valueare manufactured domestically, the United States produces just 12% of the APIs used in Americans’prescriptions. More than half of these ingredients come from allies in Europe and India.
As you know, pharmaceuticals have historically been exempt from tariffs, with all U.S. imports ofmedicines duty-free since 1994 under the World Trade Organization’s Pharmaceutical Agreement. Thisexemption exists because of the extraordinary risks tariffs on medicines could pose to vulnerablepatients.ii Quite simply, if companies are unable to import the necessary ingredients or drugs due to costor availability, drug shortages are likely to occur.
Critical drug supply chains are already fragile and vulnerable, with 271 drugs currently in shortage.While this figure is down from a record 323 in early 2024, it is still alarmingly high. We have seenshortages of both diabetes and obesity drugs over the last few years, leading to patient delays inaccessing the medications they need. Tariffs on medicines would further complicate and exacerbatethese existing challenges, inevitably hurting U.S. patients by delaying or disrupting their access tomedically necessary therapies, leading to immediate and significant impacts on health outcomes,diminished quality of life, and even death.
Estimates indicate that a 25 percent tariff would add $76 billion in costs to the economyiii and raise theprice of medicines by as much as 10.5 percent.iv In one specific example, ING estimated that a 25%tariff could raise the cost of a 24-week generic cancer drug treatment by $8,000 to $10,000.v Uninsuredpatients would be most directly affected. However, these price increases would lead to higher premiumsand out-of-pocket costs for insured patients in addition to restricted formularies and other methods ofinterrupting patient access.
Increased medicine costs would impact not just pharmaceutical companies and patients, but also thefederal government. Public programs such as Medicaid and Medicare would face the same priceincreases.
Tariffs would have a chilling effect on manufacturer efforts to develop breakthrough treatments andcures. Eli Lilly’s CEO has already noted that absorbing some of the cost of any tariffs would necessitatecutting research and development.vi Other pharmaceutical companies have warned that they would beforced to absorb a large portion of tariff costs, with research and development efforts the likely firstcasualty.vii For patients with diseases that still have no cure, that is not an outcome we can afford.viii Thisinterruption to innovation would further undermine America’s pharmaceutical development and moreimportant, would hurt patients by stifling innovation of new cures and treatments.
Nearly two-thirds of all medicines consumed in the United States by value are manufactureddomestically, across a network of more than 1,500 facilities. This manufacturing base supports about 1.7million American jobs. By value, America produces most medicines domestically and buys othersmainly from Ireland, Germany, Switzerland, Singapore and a long list of allies, not from adversaries.
Tariffs would impose additional severe financial burdens on manufacturers already operating in the U.S.and would deter investments in additional manufacturing capacity needed to keep up with the healthneeds of Americans. According to some recent analyses, a 25% tariff on imported pharmaceuticalproducts and critical inputs would increase industry costs by over $50 billion annually, which is roughly13% of total U.S. pharmaceutical sales.
In addition to the increased cost, uncertainty about how long tariffs will be in place and the resultinginability to get needed supplies could actually disincentivize investment in long-term domesticproduction. If drug manufacturers are forced to contend with rising costs of ingredients, they may decideto reduce production as a cost-saving measure. That risk is exacerbated by the difficulty of restructuringsupply chains on short notice. Eight in 10 U.S. biotech firms predict that it would take at least a year tofind new, domestic suppliers in the event of tariffs, during which time their manufacturing capacitycould be severely constrained.
Higher production costs from tariffs would also erode the price competitiveness of U.S. exports,damaging our country’s ability to export medicines, and would expose domestic manufacturers toretaliatory trade measures that would cause further harm.xi In 2023, the U.S. biopharmaceutical industryexported approximately $101 billion worth of pharmaceutical goods, demonstrating how critical thissector is in contributing to the country’s overall trade balance.xii Damaging the competitiveness of U.S.manufacturers is the opposite of the intended effect of the tariffs. Ultimately, tariffs would threaten notonly the immediate operational viability of domestic pharmaceutical manufacturing but also the longterm strategic interests of the United States in maintaining its leadership position in global healthinnovation and production.
Policies designed to strengthen the security and resilience of the pharmaceutical supply chain mustprioritize the needs of patients, ensuring the uninterrupted availability of safe, effective, and affordabletreatments for all individuals, particularly those with serious, chronic, and rare conditions. TheAdministration should pursue strategies that enhance domestic manufacturing capacity throughsupportive measures, while preserving strong international partnerships that have long contributed topatient access and health system stability.
Before implementing any tariffs on medical devices or drugs, we urge the Administration to:
As a country, we should be focused on increased patient access and affordability of medicines,something the President and his Administration committed to prioritize in his April 15 Executive Ordercalling for lower drug prices.xiv Tariffs run counter to that commitment and should be focused on areaswhere there is a legitimate national security risk. Rather than introducing new vulnerabilities throughtariff-based interventions, federal policy should build upon proven strengths, including safeguardingpublic health by maintaining a stable, reliable, and patient-centered pharmaceutical supply chain.
Thank you for your consideration of these comments. We stand ready to work with you to protect andstrengthen patients’ access to the critical medicines they rely on.
Sincerely,
L. Hunter LimbaughDPAC Board Chair
lhlimbaugh@diabetesleadership.org
m: 803-237-9719
R. Stewart Perry
DLC Board Chair
m: 859-277-7195
